OIG Red Book Recommends DME Reimbursement Cuts – Office of the Inspector General eyes durable medical equipment payments

OIG Red Book Recommends DME Reimbursement Cuts – Office of the Inspector General eyes durable medical equipment payments – Brief Article

HCFA Concurs with Most Suggestions

Washington

Reducing reimbursement for hospital beds, reviewing payments for support surfaces and improving medical reviews of home oxygen therapy are a few of the cost-saving recommendations from the Department of Health and Human Services’ Office of Inspector General.

The OIG published these and other suggestions in its annual Red Book, a compendium of significant OIG cost-saving recommendations.

The OIG urged that the Health Care Financing Administration “take immediate steps” to reduce reimbursement for hospital beds. The OIG found that Medicare reimburses at higher rates for beds and pays a higher reimbursement amount for the first three months of rental than other payers. HCFA concurred with the OIG but can’t act on the recommendations because HCFA’s inherent reasonableness authority has been suspended pending review.

For pressure support surfaces, the OIG recommended that HCFA require periodic review and renewal of the certificate of medical necessity for beneficiaries’ use of Group 2 equipment. The OIG acknowledged that 1996 regional carrier guidelines helped control medically unnecessary Medicare payments for support surfaces but said inappropriate payments still occur. HCFA disagreed with the OIG, expressing concerns about the timeliness and cost associated with using a CMN for Group 2 support surfaces.

For the segment that commands the largest portion of Medicare payments under the DME banner – home oxygen therapy – the OIG suggested that HCFA target oxygen equipment claims for medical review and ensure that its durable medical equipment regional carriers have systems in place to identify incomplete CMNs.

It also suggested developing service standards for home oxygen equipment. A 1996 OIG study found that almost a quarter of oxygen CMNs included in the study were inaccurate or incomplete, costing Medicare an estimated $263 million. The OIG also found that while all beneficiaries used their stationary oxygen equipment, 13 percent never used their portable systems, costing Medicare about $9.7 million in 1996. HCFA concurred with the OIG recommendation and has formed a regulation team to develop supplier standards for home oxygen equipment.

In other news, an OIG report titled Balance Billing for Medical Equipment and Supplies found that Medicare beneficiaries paid $41 million above the Medicare-allowed amounts for medical equipment and supplies in 1999.

The reason, according to surveyed beneficiaries, is that beneficiaries are unaware of the differences in assigned vs. nonassigned claims and participating vs. nonparticipating suppliers. The report also found that ostomy supplies have a higher nonassigned rate than supplies overall. The OIG recommended that HCFA educate beneficiaries on ways to reduce financial liability for medical equipment and supplies and re-evaluate Medicare fee schedules for ostomy supplies.

The full OIG Red Book can be found on the Internet at www.hhs.gov/oig/redbk/index.htm, and Balance Billing for Medical Equipment and Supplies can be found at www.hhs.gov/oig/oei/whatsnew.html.

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