Editorial: Paying too much

Tuesday, Dec. 4, 2007 | 7:14 a.m.

The amount Medicare pays for medical equipment and services is often significantly - and unnecessarily - higher than what those same products and services cost on the open market.

A new analysis by The New York Times shows Medicare routinely overpays for such products and services as home oxygen equipment, motorized wheelchairs, orthotics, nutrition supplements and supplies for diabetics.

In the case of oxygen equipment, for example, a basic setup and three years of tank deliveries can be purchased from pharmacies for about $3,500 per patient annually.

But Medicare pays almost $8,300 per patient annually for the same service because it rents the equipment for patients rather than buying it for them, the Times reports.

Herb Kuhn, deputy administrator of the Centers for Medicare and Medicaid Services, which oversees the Medicare program, told the Times "there is no question that parts of Medicare are mispriced."

Federal officials say the main reason Medicare pays more for many of the products it obtains is that when Congress considers requiring a more competitive bidding process, medical device manufacturers tell the nation's senior citizens such a process will result in cutting crucial services, such as servicing or repairing life-sustaining home oxygen equipment.

Federal lawmakers say such claims are not true; Medicare does pay for repairs to and maintenance of oxygen equipment that patients own.

Still, when legislators receive hundreds of calls from constituents who fear losing crucial medical aids, lawmakers back off on legislation that would force Medicare to hold medical equipment manufacturers and suppliers to the same bidding processes used in obtaining other government services.

Certainly, Medicare recipients should receive the equipment they need along with adequate repair and maintenance to keep the machines working properly. But there is no excuse for taxpayers to foot the bill for overcharges that even top-ranking Medicare officials acknowledge exist.

Congress needs to rein in the medical device industry, which is using contemptible scare tactics on one of the nation's most vulnerable populations to hold the Medicare program as its financial hostage.