Home Health & Hospice Week

New analysis finds they save Medicare more than initially thought

Many power wheelchair and scooter providers are understandably suffering from low self-esteem lately, with various authorities accusing the industry of widespread fraud and abuse. Fortunately, new research gives providers cause to hold their heads high.

As it turns out, their products appear to be saving the U.S. government quite a bit of cash. A recent analysis by Bryan, TX-based economics consulting firm RRC Inc. found that provision of power mobility equipment for people ages 65 and older saves Medicare even more money than the firm previously reported.

RRC's initial analysis of claims data indicated an average Medicare savings of $5,300 over a three-year period per recipient of a power vehicle. But refinements in the analysis indicate that savings after accounting for the cost of the equipment can be as high as $8,760 over three years - 65 percent greater than previously thought.

"The savings for those receiving power vehicles were due to lower Medicare expenditures for inpatient hospitalization, home health care, skilled nursing facilities and carrier costs," explains co-author Donald House. "These are the same types of expenditures in which savings were identified in our first study."

New Questions Require Further Research

RRC got involved in studying PME at the request of New Braunfels, TX-based The Scooter Store. After completing the initial analysis for the provider in 2003, RRC decided to investigate independently the robustness of its findings.

"The results kept holding up," co-author Clifford Fry tells Eli. "In fact, the more stringent we got in choosing the control group, the more the savings went up." The control group consists of Medicare beneficiaries without PME who are physically comparable to those who received PME.

While the initial study examined Medicare claims from 1994 through 2001, the recent analysis studied the period from 1997 through 2001. That's because around 1997, PME began changing in a way that made it more useful in the private home, and the authors wanted to focus on savings for equipment similar to that in use today.

House and Fry have submitted the results of their independent analysis to a scholarly journal for publication, and it is currently undergoing the peer-review process.

At this point, the authors do not know exactly why the savings occur, though they have their speculations. "Because hospitalization savings occur, maybe these people fall and break their hips less," Fry guesses. "It's an area worth more study." 

Editor's Note: For more details on RRC's study, contact Clifford Fry at cfry@rrc-inc.com.