Heavy price: Medicare overpaying for back braces

December 19, 2012 11:05:54 AM

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WASHINGTON -- You can find it on the Internet for $250 or less. But if Medicare is paying, a standard-issue brace for back patients costs more than $900. 

 

In a report expected Wednesday, federal investigators say Medicare paid an average of $919 for back braces that cost suppliers $191 apiece, providing a window on how wasteful spending drives up health care costs. 

 

"The program and its beneficiaries could have paid millions of dollars less if the Medicare reimbursement amount ... more closely resembled the cost to suppliers," says the report from the inspector general of the Health and Human Services Department. The Associated Press obtained a copy. 

 

In a written response, Medicare Administrator Marilyn Tavenner said the findings provide valuable insight into the inner workings of her program. Medicare will consider including back braces in a competitive bidding plan for medical equipment, she said. The bidding experiment, expanding across the country, already has been shown to save taxpayers money. 

 

Separately, ongoing budget talks between President Barack Obama and House Speaker John Boehner, R-Ohio, may lead to more competitive bidding in Medicare, a shift that industry is fighting. 

 

It's estimated that the U.S. health care system squanders $750 billion a year, about 30 cents of every medical dollar, through unneeded care, wasteful spending and fraud. Part of the problem is prices can vary widely depending on who's paying the bill. Prices that government programs pay can be way off the mark. 

 

Medicare spends more than $10 billion a year providing beneficiaries with medical equipment, from power wheelchairs to blood sugar monitors. It's an area that has been rife with fraud: Unscrupulous suppliers sell beneficiaries items they may not need and bill the cost to Medicare. 

 

The $96 million that Medicare spent on back braces in 2011 was a small sliver of its total spending, but that amount had more than doubled in just three years, up from $36 million in 2008, the report said. Investigators decided to take a closer look, before the line item for back braces could reach the $200 million or $300 million mark.