United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2002-06-12 monographic deposited born digital GA 1.13:GAO-02-833T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-833T P0b002ee180399d39 f:d02833t DGPO 2010-08-12 2011-03-28 GAOREPORTS-GAO-02-833T machine generated eng fdlp REPORT GAOREPORTS-GAO-02-833T GAO-02-833T Drugs Health care cost control Health insurance cost control Medical equipment Medical supplies Overpayments Best practices Fair market value Prices and pricing HCFA Common Procedure Coding System Medicare Program Testimony A03575

Medicare has paid higher than market rates for various medical equipment and supplies and often considerably higher than provider acquisition costs for Medicare-covered outpatient drugs. Congress has enacted a series of legislative changes affecting payment methods and payment adjustment authority for medical equipment and supplies and outpatient drugs since the late 1980s. However, progress in setting appropriate rates has been mixed, owing, in part, to various constraints faced by the agency responsible for administering Medicare--the Centers for Medicare and Medicaid Services (CMS). Because of the program's size, scope, and role as a public payer, Medicare has limited options to set and adjust payments for medical equipment, supplies and outpatient drugs. Medicare's method of paying for medical equipment and supplies is through fee schedules that remain tied to suppliers' historical charges to Medicare rather than market prices. Medicare's payment approaches lack flexibility to keep pace with market changes, and as a result, Medicare often pays higher prices than other public payers. Previous efforts to lower Medicare's overly generous payments suggest several lessons. First, payment changes are most effectively implemented when the process used to set or adjust a rate is defensible. Second, the information on Medicare claims for medical equipment and supplies is not specific enough to enable CMS to determine which products Medicare is actually paying for. Also, for the foreseeable future, CMS will have to continue to rely on fee schedules based on historical charges in setting payment rates for medical equipment and supply items. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-02-833T/html/GAOREPORTS-GAO-02-833T.htm GAO-02-833T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-833T Testimony GAO-02-833T; Medicare: Challenges Remain in Setting Payments for Medical Equipment and Supplies and Covered Drugs; Drugs Health care cost control Health insurance cost control Medical equipment Medical supplies Overpayments Best practices Fair market value Prices and pricing HCFA Common Procedure Coding System Medicare Program Title 42 Section 1395m Title 42 Section 1395u Title 42 Section 1396r 42 U.S.C. 1395m 42 U.S.C. 1395u 42 U.S.C. 1396r Volume 101 Page 1330 101 Stat. 1330 Volume 102 Page 683 102 Stat. 683 Volume 103 Page 2106 103 Stat. 2106 Volume 104 Page 1388 104 Stat. 1388 Volume 107 Page 312 107 Stat. 312 Volume 110 Page 1936 110 Stat. 1936 Volume 111 Page 251 Volume 111 Page 390 Volume 111 Page 392 Volume 111 Page 459 111 Stat. 251 111 Stat. 390 111 Stat. 392 111 Stat. 459 Volume 113 Page 1501 113 Stat. 1501 Volume 114 Page 2763 114 Stat. 2763 Public Law 100-203 Public Law 100-360 Public Law 101-239 Public Law 101-508 Public Law 103-66 Public Law 104-191 Public Law 105-33 Public Law 106-113 Public Law 106-554