Medicaid Overpays for Oxygen Equipment, OIG Says

Washington

Some state Medicaid programs are paying too much for oxygen equipment and supplies, according the HHS Office of Inspector General.

In an Aug. 9 report titled Audit of Medicaid Payments for Oxygen-Related Durable Medical Equipment and Supplies, the OIG found that out of nine states audited in 1999, six paid a total of $12.7 million more for oxygen equipment than Medicare would have paid.

Four of those states — Pennsylvania, Texas, Indiana and Kentucky — have a requirement that Medicaid rates not exceed the Medicare allowable for oxygen, but did not follow that requirement. As a result, the states overpaid Medicaid providers by approximately $10 million. Two states without the requirement — Michigan and Wisconsin — overpaid Medicaid providers approximately $2.7 million, the report said. The three remaining states — Minnesota, Illinois and Ohio — had Medicaid rates equal to or less than the Medicare allowable.

The IG also conducted additional oxygen-related DME analyses from 41 other states and the District of Columbia, and concluded that, of those, 22 states and the nation’s capital could save money by limiting Medicaid payments to Medicare allowables.

According to an OIG spokesperson, another report on Medicare oxygen payments, due out later in the fall, will be used to help determine Medicare oxygen reimbursement rates in 2005 as mandated under the MMA.

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.