Medicare is bleeding billions on expensive bandages and doctors receive a reduction
Companies can define high prices based on a peculiarity of Medicare Price rules, industry experts said. In the first six months of a new life of a new association product, Medicare will determine the reimbursement rate at all costs. After that, the agency adapts the reimbursement to reflect the actual price that doctors paid according to discounts.
In order to avoid reimbursement, some companies simply organize new products.
In April 2023, Medicare began with the reimbursement of 6,497 US dollars for every square of an association called Zenith, which was sold by Legacy Medical Consultants, a company in Fort Worth, Texas. Six months later, Zenith's reimbursement fell to $ 2,746.
This month, October 2023, Medicare began with the reimbursement of 6,490 US dollars for a new Legacy product, a “dual layer” bandage called Impax.
Marketing materials for the two products use identical photographs and a similar language. The company describes both products as “optimal wound coverage and protection during the treatment of wounds”.
Since 2022, the expenses for Zenith and Impax have been on 2.6 billion US dollars in accordance with the analysis of Early Read.
Legacy Medical Consultants did not answer any questions about marketing and pricing these products. “Legacy follows the law and does not use the system,” said Dan Childs, a company spokesman, in an explanation.
Medicine
A household industry by doctors and nurses meets house calls for the treatment of wounds. Some skin replacement companies control wound care doctors by offering a reduction in increasing association prices.
Dr. Caroline Fife, a wound care from Texas, which often writes about industries excesses, shared an e -mail last year on her blog that she received from an unknown skin replacement company. The company praised that other doctors had developed “a healthy sources of income” from his bandages and that a patch that “generates a little more than 20,000 US dollars for their practice”.
According to doctor interviews, some companies offer a “mass discount” of up to 45 percent according to doctor interviews and contracts checked by Times. Doctors then collect a medical refund for the full price of the product.
Anti-kickback laws ban doctors to receive financial rewards from pharmaceutical companies or medical suppliers. And although Medicare allows mass discounts, experts said that the association discounts had violated the federal law because they did not require any high volume purchases. In some Legacy contracts checked by the Times, doctors only had to buy three products to qualify for a discount of 40 or 45 percent.
“This is not a volume discount,” said Reuben Guttman, a lawyer in Washington, DC, who has represented many Medicare whistle blower. Mr. Guttman said that such a label could be used to hide a setback.
In 2024, at least nine medical practices, Medicare calculated more than 50 million dollars for skin replacement of more than 50 million US dollars, as can be seen from an analysis of the National Association of Accountable Care Organizations, which represents medical groups to contain the Medicare editions.
