The amount Medicare has been paying for the devices — known as vacuum erection systems (VES), which assist men suffering from impotence — has increased in the six years investigators studied, from $20.6 million in 2006 to $38.6 million in 2011.
The Centers for Medicare and Medicaid Services has done little to correct the problem since 1999, the IG said, when investigators first pointed out the excessive spending. The agency has the power to determine that the prices are excessive and refuse to pay a certain amount through a “special payment limit,” but investigators said “CMS has not used that authority to adjust pricing for VES” in the past 15 years.
In a response to the report, CMS said they were looking into why costs were so high, and were taking steps to reduce waste.
A spokesperson for CMS said the agency does not have the authority to competitively bid contracts for the equipment, something that could drive the price down.
“While Medicare strives to pay appropriately for items and services … CMS does not currently have the authority to subject this equipment to competitive bidding,” a statement from the spokesperson said.
The agency would need congressional approval, the spokesperson said, adding that competitive bidding across Medicare could save taxpayers billions of dollars over the next decade.
Investigators found that another agency — the Veterans Affairs Department — has been paying fair prices and is not wasting money. A comparison between the two showed the VA was paying an average of $185 for each VES, while CMS was paying nearly double that amount: $360.
So: they’ve known that they were being overcharged since 1999 and have done nothing about it because “Congressional approval would be required.” What Congressman protected a constituent by banning competitive bidding in medical (quasi-medical?) equipment, and how many items besides penis pumps are also shielded from competition?
This needs to be probed.