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Medicare Payments for Durable Medical Equipment Are Higher Than Necessary

HRD-82-61 Published: Jul 23, 1982. Publicly Released: Jul 23, 1982.
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Highlights

GAO reported on the probable fiscal impact of the failure of the Department of Health and Human Services (HHS) to implement a law aimed at reducing the cost to the Medicare program and its beneficiaries for the prolonged rentals of durable medical equipment.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services The Secretary of HHS should direct the Administrator of the Health Care Financing Administration (HCFA) to immediately notify the Medicare carriers to: (1) stop reimbursements for new rentals of items costing $60 or less; and (2) make analyses where possible of medical necessity forms to determine whether reimbursement on a rental or lump-sum purchase basis would be more economical and pay benefits on the most economical basis.
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services The Secretary of HHS should direct the Administrator of HCFA to increase the $60 limit used for requiring purchase to $100 and periodically adjust the limit for inflation.
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services The Secretary of HHS should direct the Administrator of HCFA to require carriers to improve their monitoring and retention of the medical necessity forms. Carriers must have the forms completely filled out by physicians in order to make effective rent or purchase decisions.
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Health and Human Services The Secretary of HHS should modify the regulations to recognize that lease-purchase arrangements will generally be more costly than lump-sum purchase and, thus, would have limited applicability to certain high-cost items where the expected period of need is uncertain or where beneficiaries cannot afford the co-insurance associated with lump-sum purchases.
Closed – Not Implemented
GAO issued a follow-on report on July 30, 1985, HRD-85-35. The recommendations in the follow-on report are applicable to HHS.
Department of Health and Human Services The Secretary of HHS should direct the Administrator of HCFA to provide beneficiaries with written material explaining the regulations on lease-purchase arrangements.
Closed – Not Implemented
GAO issued a follow-on report on July 30, 1985, HRD-85-35. The recommendations in the follow-on report are applicable to HHS.

Full Report

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Topics

Cost controlHealth care servicesMedicareLeasesMedical equipmentRental equipmentBeneficiariesOxygenDurable medical equipmentDeductibles and Coinsurance