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

This review was requested by the former Chairman of the Subcommittee on Health, Senate Committee on Finance, to evaluate allegations to the effect that suppliers of durable medical equipment to Medicare beneficiaries in certain southeastern States were being subjected to discriminatory reimbursement and coverage requirements. Medicare payments for durable medical equipment--hospital beds, wheelchairs, commodes, and oxygen equipment--are estimated in excess of 125 million a year. Durable medical equipment for use in a beneficiarys home is covered under Medicare if it is medically necessary. Medicare payments for such items are made by contract paying agents called carriers. For two items of equipment standard hospital beds and wheelchairs, the payments may not exceed an amount based on the lowest charge level at which the items are widely and consistently available in a locality. The Health Care Financing Administration HCFA has defined the lowest charge level as one high enough to include the cumulative 25th percentile in the distribution of actual charges submitted during a previous period. GAO was asked to review the payment levels for durable medical equipment in Georgia, Alabama, Florida, South Carolina, and selected other States. The other States were Connecticut, New Hampshire, Vermont, Missouri, and northern California. Author