Medicare's Reimbursement Policies for Durable Medical Equipment Should Be Modified and Made More Consistent

Because of complaints from suppliers of durable medical equipment to Medicare beneficiaries in some southeastern states that they were not being treated fairly by the Health Care Financing Administration's (HCFA) Atlanta regional office and Medicare carriers in that region, GAO was asked to look into selected Medicare reimbursement practices in Georgia, Alabama, Florida, and South Carolina in comparison with other states. Specifically, GAO was asked to determine: (1) whether standard hospital beds and wheelchairs are widely and consistently available to beneficiaries at the 25th percentile of charges; (2) whether suppliers in the HCFA Atlanta region were subject to different and more restrictive coverage and reimbursement criteria than were being applied to suppliers in other areas; and (3) the appropriateness of other payment practices and policies followed by carriers in the Atlanta region.

There were large geographical areas in most of the states reviewed containing thousands of Medicare beneficiaries where standard wheelchairs and hospital beds were not available at the lowest charge level. This condition was less critical for rental than for purchases because more suppliers took assignment for rentals than for purchases. Because carriers do not accumulate data on the number or rate of assignments for these items, HCFA does not know what the assignment rates are or their precise impact on availability. The unavailability of these items for purchase at the lowest charge levels tends to defeat the purpose of Public Law 95-142. In addition, there have been problems with developing, applying, and monitoring the provisions. The coverage and utilization screens used by the Atlanta region differ from those used in the Boston, San Francisco, and Kansas City regions. Even within the Atlanta region, carriers have differing requirements. Carriers in the Atlanta region were also the only carriers reviewed that used inherent reasonableness tests to assess the validity of durable medical equipment allowances.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Michael Zimmerman Team: General Accounting Office: Human Resources Division Phone: (202) 275-6195