Hoveround Corporation Claimed Millions in Federal Reimbursement for Power Mobility Devices That Did Not Meet Medicare Requirements

Hoveround Corporation often did not claim Medicare reimbursement for power mobility devices (PMDs) in accordance with Medicare requirements. Medicare Part B covers PMDs, which include power wheelchairs and power-operated vehicles. High incidences of fraud and improper payments have been historically associated with PMDs. In 2010, Hoveround received almost $50 million for PMD claims, the second-largest Federal reimbursement for PMDs supplied to Medicare beneficiaries.

For 154 of 200 of the sampled beneficiaries we reviewed, Hoveround received payments for claims that did not comply with Medicare requirements. For 144 sampled beneficiaries, Hoveround did not support the medical necessity of PMDs; for 10 sampled beneficiaries, Hoveround provided incomplete documentation to support the PMD claims. On the basis of our sample results, we estimated that Medicare paid Hoveround $27,027,579 for PMDs that did not meet Medicare requirements during 2010.

We recommended that Hoveround (1) refund $27,027,579 to the Federal Government and (2) implement internal controls to ensure that Medicare requirements are followed to support beneficiaries' medical needs for PMDs and ensure that supporting documentation for PMDs meets Medicare requirements before providing PMDs to beneficiaries.

In written comments on our draft report, Hoveround disagreed with our recommendations. Hoveround stated that OIG did not inform Hoveround that it was conducting a medical necessity review and as a result Hoveround was not able to submit all of the necessary supporting evidence. Hoveround stated that OIG influenced the medical review performed by the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and biased the results. Hoveround stated that the DME MACs' conclusions were wrong because they did not apply the correct standards. Hoveround also stated that OIG's extrapolation of the audit results was improper.

We maintain that Hoveround was informed of the need to provide OIG with medical records to support the medical necessity of its claims. OIG did not influence or bias the result of the DME MACs' medical necessity review. We maintain that the DME MACs used the correct Medicare standards in conducting their medical review. Finally, our extrapolation of the audit results was appropriate. For reasons we explain in the report, we stand by our audit methodology, procedures, findings, and recommendations.