Analysis of Medicare Durable Medical Equipment Claims in Georgia, Idaho, and Southern California

In response to a congressional request, GAO analyzed reimbursement for Durable Medical Equipment (DME) on a rental or purchase basis in three states by Medicare carriers and reported its findings as part of a periodic review.

GAO noted that this report covers work completed as of November 1983. GAO found that potential savings from implementing the Health Care Financing Administration's July 1982 guidelines, which encourage the purchase of low cost items, varied. GAO also compared the methodology and results of another group's study with its own work and discussed the differences. For the insurance carriers reviewed in the three states, GAO found that the excess rental allowances were about 36 percent of the $4.1 million in allowed charges for the 24,085 rental episodes that began in December 1980 and January or February 1981 and extended over various comparable periods. GAO noted that this represents the maximum potential savings if all items had been reimbursed on a purchase basis.