Washington
The nation's two largest health insurers — Medicare and Medicaid — are in dire straits, in part because the government pays too much for Part B equipment and services, according to a Jan. 30 report from the U.S. General Accounting Office. Pointing to disparities between what Medicare pays for medical equipment and what other government agencies and private insurers pay, the report argues the need for a more-flexible reimbursement structure.
“To lower unreasonably high payment rates, [the Centers for Medicare and Medicaid Services today] must follow a lengthy and complicated regulatory process for making payment adjustments,” the GAO said.
But that process will change as of Feb. 11, 2003, when a rule outlining CMS' expedited payment-adjustment authority — the “inherent reasonableness” rule — becomes final, the report explained.
Another method for bringing government reimbursements in line with market rates is competitive bidding for durable medical equipment, the report continued. “Evidence from two [DME] competitive bidding projects suggests that, for most of the items selected, competition might provide a tool that facilitates setting more appropriate payment rates that result in program savings,” the report said.
The GAO stopped short of recommending national implementation of DME competitive bidding, citing administrative challenges.
“To use competitive bidding outside of a demonstration, however, CMS would require not only new authority but substantial administrative preparations, as competing a larger number of products nationally would entail bidding in multiple markets and monitoring access and quality once prices had been set.”
While not calling specifically for an overhaul of Medicare and Medicaid, the report insisted that the need to improve efficiency at CMS “cannot be overstated.”
The President unveiled his entire 2004 budget plan to Congress Feb. 3.
For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.
