Audit reveals Lexus-level markups for motorized wheelchairs covered by New York's insurance plan for state workers and retirees. Average price paid for 79 sets of wheels: $37,000.
www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20110519/FREE/110519839/0/FREEThirty-seven thousand dollars ought to buy anyone a nice set of wheels. But when they're just attached to a chair, someone's being fleeced, a New York state audit charges.
That is the average price a New York state-funded insurance plan was charged for 79 motorized wheelchairs, auditors from the Office of the State Comptroller found. The price included an average markup of $20,000. In one case the price was $48,000 for a chair that cost the supplier $15,000, the audit found.
Despite the Lexus-level sticker shock, advocates for the disabled say they have heard of such high prices. “These wheelchairs can be as complex as cars,” said Joseph Campanella, executive director of the Home Care Council of New York City.
For instance, he said, chairs designed to give quadriplegic patients mobility have to be fine-tuned so that a user can easily control the brakes by touching a lever with the chin.
Still, Mr. Campanella added, “there is some price gouging that goes on in these high-tech chairs when people have the money to pay.”
Now the state is trying to recoup some of its money under the terms of a contract it has with UnitedHealthcare, the insurance entity in charge of approving such purchases. UnitedHealth administers the durable medical equipment benefit in the Empire Plan, which covers many governmental workers and retirees under the New York State Health Insurance Plan.
The state auditors in their report didn't buy the argument that customizing the chairs justified the high markup: “We recognize suppliers have other costs associated with fitting and delivering the chairs, as well as training the patients to use them. Nevertheless, there is reason to question whether the profit made by suppliers for wheelchairs of this nature is excessive.”
The vendors named in the audit are Home Medical Equipment, Monroe Wheelchair, Wheelchair Professionals, and Pro Rehab Services. Twenty-one different chair models were involved.
The purchases were among $16.7 million worth of wheelchair buys the plan approved during the audit period of Jan. 1, 2007 to Feb. 28, 2010. Though the contracts set specific reimbursement rates for many items, customized wheelchairs are not in those fee schedules. Auditors said UnitedHealth based the payment prices on the manufacturers' suggested retail prices.
A UnitedHealth spokeswoman told Crain's on Thursday in the wake of the auditor's report: “We are in the process of revising our contracts with these companies to ensure that reimbursement rates are more consistent and reasonable, and that the contracts are more uniform across wheelchair providers. For example, we will start requiring these providers to itemize their costs for each wheelchair. We remain committed to helping [New York state] ensure Empire Plan members have access to affordable care."
Motorized wheelchair purchases have come under scrutiny nationally in the past. In August 2009 the federal Department of Health and Human Services' Office of Inspector General questioned whether $5,600 was an excessive profit for suppliers to make on a complex power wheelchair provided to a Medicare recipient.
