Durable Medical Equipment

Specific HCFA Criteria and Standard Forms Could Reduce Medicare Payments Gao ID: HRD-92-64 June 12, 1992

The Health Care Financing Administration (HCFA) could cut Medicare spending on durable medical equipment subject to unnecessary payments by developing more detailed coverage criteria that give carriers a clear, well-defined, objective basis for paying or denying claims. Medicare paid about $1.7 billion in 1990 for durable medical equipment purchases and rentals, such as hospital beds and wheelchairs. To save even more money, HCFA could also develop medical necessity certification forms for equipment subject to unnecessary payments. These forms should require doctors to explain patients' needs for the prescribed equipment. Among carriers that use this kind of form, Medicare payments for three types of equipment have fallen significantly because the forms gave detailed information that led to denial of claims.

GAO found that: (1) in 1990, Medicare paid about $1.7 billion for durable medical equipment claims; (2) Medicare pays millions of dollars annually for equipment that beneficiaries do not need; (3) HCFA coverage criteria for determining the necessity of durable medical equipment are vague and subjective and do not include sufficient information about specific medical conditions, condition severity, or the necessity for additional or sophisticated features on basic equipment; (4) HCFA agrees with carriers that more detailed coverage criteria could reduce unnecessary Medicare payments for durable medical equipment, but believes that it is unreasonable to list all possible conditions for coverage; and (5) to reduce unnecessary payments, HCFA requires suppliers to have prescriptions before delivering certain equipment to beneficiaries, suggests that carriers use more detailed medical necessity certification forms, and proposes to consolidate the processing of medical equipment claims. GAO also found that: (1) carriers have significantly reduced unnecessary equipment payments by using certification forms that require physicians to provide narrative, more detailed justification for equipment; and (2) HCFA plans to develop additional suggested forms for carriers to use to certify medical equipment necessity.

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: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.