The HHS Office of Inspector General is once again calling for states to clamp down on Medicaid reimbursement for durable medical equipment (DME) and supplies. The OIG cites a series of earlier reports estimating that four states (California, Minnesota, New York, and Ohio) could have saved more than $18.1 million on selected DME items if their Medicaid prices were comparable to those under Round 1 of the Medicare competitive bidding program. Since issuing those reports, the OIG identified $12 million in additional savings that the four states could have obtained on the selected items by using pricing similar to the Medicare Round 2 Competitive Bidding and National Mail-Order Programs. In light of varying Medicaid provider rates for DME and the potential for lower spending, the OIG recommends that CMS: (1) seek legislative authority to limit state Medicaid DME reimbursement rates to Medicare program rates, and (2) encourage further reduction of Medicaid reimbursement rates through competitive bidding or manufacturer rebates (the OIG did not determine the cost of implementing a rebate or competitive bidding program in each state). CMS concurred with the OIG's recommendations, observing that the President's proposed fiscal year 2016 budget recommended limiting Medicaid reimbursement of DME to Medicare rates. CMS also noted that it communicates frequently with states to inform them of available options for their DME purchasing programs, including manufacturer rebates and competitive bidding. For details, see the full report, State Medicaid Agencies Can Significantly Reduce Medicaid Costs for Durable Medical Equipment and Supplies.
This article is presented for informational purposes only and is not intended to constitute legal advice.
