Medicare charges are fishy

Last modified: 9/7/2012 12:00:00 AM
Are CMS charges for Medicare and Medicaid services driving the federal government to bankruptcy? CMS, an acronym for the Centers for Medicare and Medicaid Services, is a federal organization with responsibility for setting charges for all medical procedures and equipment under Medicare and Medicaid.

I would like to know the basis for CMS charges, especially two I received last year. The charges seem to be much, much higher than 'market' costs. How are they justified? How might they be improved?

On Aug. 12, 2011, I visited an orthopedist and requested advice on what type of new ankle brace to buy. I brought with me a well-worn Bledsoe Axiom Ankle Brace which he had given me when I had sprained my right ankle several years previously, as a preventative to spraining my ankle again. (I never saw a charge for this ankle brace.)

I checked the internet price for the Bledsoe Axiom Ankle Brace, and a new brace cost about $115. (Today it is available for $89.95 through the Brace Shop). I wanted to see if I could purchase a less pricey ankle brace, one that gave plastic rigid support but was not hinged - they were listed for about half the price of the Bledsoe Axiom Ankle Brace.

My orthopedist took my old brace and returned with a new Bledsoe Axiom Ankle Brace and gave it to me. I left deciding that I did not need to shop for a less pricey brace.

I then received a notice from CMS. In it, a charge of $415. Medicare approved $413.83 and paid the doctor 331.06. The notice said I might be billed $82.87. (In fact, my supplemental AARP insurance covered the remainder.)

Why is the charge for the ankle brace almost four times its market cost? And was it proper for the orthopedist to 'give' me the brace (as he had done initially) and not mention that he would be provided payment by Medicare?

Separately, for physical therapy services I received between Aug. 12, 2011, and Aug. 25, 2011, there are CMS charges of $97 (therapeutic exercises), $194 (therapeutic exercises), $194 (therapeutic exercises), $102 (manual procedure) and $102 (manual procedure) for visits, each lasting 30 to 60 minutes.

A physical therapist prescribes an exercise, printout and practice. This is done typically in a 15-minute block of time. The CMS charge of $97 is for one exercise; the CMS charge of $194 is for two. This translates to $384 per hour.

The charge of $102 for manual therapy is done in a single 15-minute block of time and translates to $408 per hour.

The charge for the initial physical therapist evaluation visit (60 minutes) was $223. While physical therapists are meant to have a doctorate degree, my visits for manual therapy and exercises were performed by physical therapy assistants, who typically have an associate's degree and maintain their certification.

Surely these are very high costs - far higher than market cost. Consider: The referring physician charges for an office visit were $78. Are the algorithms - rules - that CMS is using bankrupting Medicare? How are they justified? How might they be improved?

(Nick Ourusoff lives in New London.)

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