Medicare paid "excessive" $172M for penis pumps over five-year span: Report

WASHINGTON A new report questions why the U.S. government is paying so much for penis pumps.

Penis pumps cost the U.S. Medicare program $172 million between 2006 and 2011, about twice as much as the consumer would have paid at the retail level, according to a government watchdog's report released on Monday.

The report by the inspector general for the Department of Health and Human Services said Medicare, the government health insurance system for seniors, paid nearly 474,000 claims for vacuum erection systems (VES), totaling about $172.4 million from 2006 to 2011. Yearly claims for the devices nearly doubled from $20.6 million in 2006 to $38.6 million in 2011.

A penis pump is a plastic tube hooked to a hand or battery-powered pump. After placing it over the penis, the pump creates a vacuum inside the tube that diverts blood flow into the penis, to create an erection. A rubber constriction ring placed around the base of the penis maintains the erection, which typically lasts long enough for intercourse, according to the Mayo Clinic.

The Clinic adds the devices are one of a few treatment options for erectile dysfunction, and pose less of a risk than other treatment options, such as surgical implantation of a device. The devices may counter the effects of certain health conditions including diabetes, Peyronie’s disease, or side effects from prostate cancer treatment.

Government waste is a major issue in budget talks in the U.S. capital as lawmakers try to reach agreement on a $1 trillion spending bill.

"Medicare payment amounts for VES remain grossly excessive compared with the amounts that non-Medicare payers pay," said the report, dated December 2013. "Medicare currently pays suppliers more than twice as much for VES as the Department of Veterans Affairs and consumers over the Internet pay for these types of devices."

If Medicare had adjusted its payments to approximately the price non-Medicare payers pay, the U.S. government would have saved an average of about $14.4 million for each of the six years, the report said.

The report recommended that the Centers for Medicare & Medicaid Services (CMS) use its authority to establish a special payment limit if the agency agrees with the report's conclusion that the device payments are "grossly excessive," and seek legislative authority to include the devices in the Competitive Bidding Program.

That program, created in 2003, allows CMS to award contracts to enough suppliers to meet demand and bring down payments. 

"Considering the strain retiring baby boomers will soon be placing on Medicare's budget, shouldn't we be focusing this entitlement program on real, life-saving treatment and equipment to serve the health needs of seniors - instead of subsidizing penis pump purchases?" Ben Domenici of the Heartland Institute think tank said in an email statement.

"And to those seniors who really do want one," added Domenech, "just buy it yourself - you don't need to send the bill to your fellow Americans."