[Congressional Record Volume 144, Number 14 (Tuesday, February 24, 1998)]
[Extensions of Remarks]
[Pages E212-E213]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF THE MEDICARE UNIVERSAL PRODUCT NUMBER ACT

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                     HON. LOUISE McINTOSH SLAUGHTER

                              of new york

                    in the house of representatives

                       Tuesday, February 24, 1998

  Ms. SLAUGHTER. Mr. Speaker, I rise to announce that today I will 
introduce the Medicare Universal Product Number Act, an important bill 
to cut waste, fraud and abuse in the Medicare program.
  In 1996, the federal government conducted the first-ever 
comprehensive audit of Medicare's books. This audit revealed that 
Medicare was losing more than $23 billion every year to waste, fraud, 
and abuse--almost 14 percent of the program's budget. This level of 
waste and fraud is simply unacceptable. Medicare must make better use 
of the hard-earned taxpayer dollars that fund this important program.
  One of the most important ways Medicare can reduce waste, fraud and 
abuse is by reforming its durable medical equipment program. Durable 
medical equipment includes supplies like catheters, wheelchairs, 
walkers, and ostomy supplies needed by older patients. One of the 
greatest problems in the medical equipment program is that the current 
system does not tell Medicare exactly what items are being supplied and 
paid for.
  The Medicare Universal Product Number Act will empower Medicare to 
know precisely what items are being supplied to older Americans and to 
tailor reimbursement levels appropriately. This bill requires all 
medical equipment paid for by Medicare to have a Universal Product 
Number--very similar to the bar codes on groceries. When suppliers 
submit claims for reimbursement, they will identify items by UPN. 
Medicare will know exactly what equipment has been provided and 
reimburse accordingly.
  Most Americans probably believes Medicare already operates this way. 
Unfortunately, it does not. Medicare currently reimburses for medical 
equipment under broad categories known as billing codes. A single 
billing code

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may cover hundreds of items across a wide price range. Within a billing 
code, Medicare pays an average cost based on a complicated formula. 
Billing codes can be confusing for equipment suppliers and are easily 
manipulated by unscrupulous suppliers.
  UPNs will help revolutionize the way Medicare pays for medical 
equipment and accounts for the program's spending. The bill will 
improve Medicare in three important ways.
  First, UPNs will help Medicare reduce fraud and abuse by identifying 
exactly what equipment is being supplied. Inspectors will be able to 
verify precisely what equipment was billed for and whether it was 
provided.
  Second, UPNs will cut waste by allowing Medicare to pay an accurate 
price for individual items, instead of wasting money by paying a higher 
average price when less expensive items are supplied.
  Third, UPNs will make the program simpler and fairer for suppliers. 
They will eliminate the confusing billing codes and ensure that 
suppliers receive a fair price for all products, instead of overpaying 
for some and underpaying for others.
  I am proud to be introducing this bill with Rep. Amo Houghton of 
Corning, an outstanding legislator known for his important contribution 
to health care issues. I would also like to note that this legislation 
has already been endorsed by Health Industry Distributors Association 
and the National Association for Medical Equipment Services.
  The current system is wasteful and vulnerable to abuse. UPNs are a 
common-sense solution to make Medicare a wise health consumer on behalf 
of older Americans, taxpayers, and medical equipment suppliers alike.

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