Medicare's annual budget for 2008 was $444 billion. In January, it cut its payments to suppliers by 9.5 percent to make up for what it thought competitive bidding would have saved taxpayers, according to the report.

In July, a CNN investigation found that a patient and taxpayers were billed about $1,200 over four years for a nonmotorized chair, while a nearly identical chair could be bought from the same supplier for $349.