Medicare is paying more than twice as much for penis pumps intended to treat erectile dysfunction than other private and government customers, according to a new government report released Monday.
“Medicare payment amounts for vacuum erection systems remain grossly excessive compared with the amounts that non-Medicare payers pay,’’ the report said.
The pricing review was started after investigators looked into payments for male vacuum erection systems to a Dodge City, Kan., firm, Post-T-Vac in 2011. A 2012 report faulted the firm’s documentation of some claims.
Scripps News reported later that year that Medicare charges for the pumps had surpassed $250 million between 2000 and 2011, an increase of more than 500 percent during the decade. There were about 63,000 claims in 2006; more than 97,000 by 2011.
Federal investigators had turned up several instances where supplies have grossly inflated prices paid for the devices.
In one 2012 case, the owner of an Illinois firm was sentenced to more than 3 years in federal prison for shipping penis pumps he obtained from online sex shops for about $26 each to diabetic Medicare patients who never requested them, then billed the insurance plan an average of $284 each for the devices.
In the latest IG report, reviewed nearly half a million claims paid between 2006 and 2011 totaling about $172 million., and also got payment data from VA and from Internet searches.
The average price paid for penis pumps through Medicare was $451; through VA, $186 and through Internet vendors, $165.
The investigators calculated that if Medicare’s fee schedule for vacuum erection systems had matched the amounts others were paying, the government would have saved about $14.4 million a year during each of the years reviewed, and beneficiaries, who have to pay 20 percent of the fee, would have saved $3.6 million a year.
Investigators said the overpayments could be addressed by Medicare either by changing the fee schedule down to what others pay, or by adding the devices to a list of durable medical equipment for which Medicare requires competitive bidding.
Medicare Administrator Marilyn Tavenner responded to the report in a letter saying officials would consider whether the fee schedule could be adjusted and discuss seeking congressional approval to add the devices to the competitive bidding list. She also noted that Medicare has been aware it was overpaying for the devices compared to the VA since 1999.
Vacuum pumps have been used for treatment of erectile dysfunction for at least a century and there are dozens of scientific studies that attest to their effectiveness. But the devices are particularly important for Medicare patients because, aside from some surgical procedures, they’re the only option the insurance plan can cover.
Beneficiaries are denied drugs for erectile dysfunction. Medicare and most private insurance plans did cover them for several years, but Congress banned them as “lifestyle” drugs rather than medical necessities in 2006; claims for penis pumps started to soar that same year.