United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Health, Education, and Human Services Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2000-07-05 monographic deposited born digital 62 p. GA 1.13:HEHS-00-79 https://www.govinfo.gov/app/details/GAOREPORTS-HEHS-00-79 P0b002ee180371ddd f:he00079 DGPO 2010-08-12 2011-03-24 GAOREPORTS-HEHS-00-79 machine generated eng fdlp REPORT GAOREPORTS-HEHS-00-79 HEHS-00-79 Health care programs Medical supplies Prices and pricing Claims processing Agency proceedings Health insurance cost control Medical equipment Medical expense claims Medicare Program HCFA Common Procedure Coding System Letter Report HEHS A4253

Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) and the Durable Medical Equipment Regional Carriers' (DMERC) actions to implement a final rule for processing Medicare payments, focusing on whether: (1) it was proper for HCFA to issue its inherent reasonableness regulations as an interim final rule, and whether HCFA is authorized to delegate responsibility for making payment adjustments to the DMERCs; (2) the DMERCs' survey methods were adequate to support the proposed payment reductions; and (3) the proposed payment reductions will reduce patient access to the affected medical products.<p/>GAO noted that: (1) HCFA acted properly in issuing an interim final rule to implement the inherent reasonableness provision of the Balanced Budget Act (BBA) because these regulations did not substantially change the factors to be considered in making inherent reasonableness determinations, and thus the criteria were met for bypassing the general requirement for issuing a notice of proposed rulemaking; (2) under the revised regulations, HCFA and the DMERCs would conduct payment reviews under the same circumstances and consider essentially the same information as in the past; (3) as provided by the BBA, they would be able to adjust payment amounts by up to 15 percent a year without using lengthier public notice and comment procedures; (4) GAO feels it is clearly within HCFA's authority to delegate partial responsibility for adjusting payment rates to the DMERCs; (5) HCFA has long delegated similar types of responsibilities to the DMERCs and other claims processing contractors, and the BBA, which amended Medicare law to enable use of the revised process, did not preclude such delegation; (6) survey data clearly showed that Medicare payments are much higher than the median surveyed retail prices for five of the products the DMERCs reviewed--lancets, eyeglass frames, urinary catheters, and two types of catheter insertion trays; (7) as a result, sufficient information supports proposed payment reductions of up to 15 percent for these items; (8) however, the DMERCs did not follow a rigorous survey process, and this led GAO to question the proposed smaller payment reductions for glucose test strips and albuterol sulfate; (9) for the eighth surveyed product--enteral formulas--more pricing information is needed before the payment amount can be adjusted because the DMERCs did not price products specifically packaged and used for tube feeding and instead priced products that are generally used as oral supplements; (10) retail surveys may not be the best strategy for setting payment amounts for items not generally sold at retail prices, such as enteral formulas; (11) for such products, using wholesale prices plus a reasonable markup may represent a better payment-setting mechanism; (12) it is difficult to predict whether the proposed payment reductions will limit patient access because Medicare has implemented few comparable reductions in recent years; and (13) because retail prices--which include retailers' costs for both acquisition and service--were used to establish the proposed reductions, GAO believes that access to these products is not likely to be significantly affected. https://www.govinfo.gov/content/pkg/GAOREPORTS-HEHS-00-79/html/GAOREPORTS-HEHS-00-79.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-HEHS-00-79/pdf/GAOREPORTS-HEHS-00-79.pdf GAO/HEHS-00-79 https://www.govinfo.gov/app/details/GAOREPORTS-HEHS-00-79 Letter Report GAO/HEHS-00-79; Medicare Payments: Use of Revised "Inherent; Health care programs Medical supplies Prices and pricing Claims processing Agency proceedings Health insurance cost control Medical equipment Medical expense claims Medicare Program HCFA Common Procedure Coding System Title 5 Section 553(b)(B) Title 5 Section 603(a) 5 U.S.C. 553(b)(B) 5 U.S.C. 603(a) Title 42 Section 1395hh(a)(2) Title 42 Section 1395m Title 42 Section 1395m(a)(10)(B) Title 42 Section 1395m(a)(2) Title 42 Section 1395u(b)(8)(A)(i) Title 42 Section 1395u(b)(8)(A)(ii) Title 42 Section 1395u(b)(8)(B) Title 42 Section 1395u(o)(1) 42 U.S.C. 1395hh(a)(2) 42 U.S.C. 1395m 42 U.S.C. 1395m(a)(10)(B) 42 U.S.C. 1395m(a)(2) 42 U.S.C. 1395u(b)(8)(A)(i) 42 U.S.C. 1395u(b)(8)(A)(ii) 42 U.S.C. 1395u(b)(8)(B) 42 U.S.C. 1395u(o)(1) Volume 100 Page 82 Volume 100 Page 1874 100 Stat. 82 100 Stat. 1874 Volume 101 Page 1330 101 Stat. 1330 Volume 102 Page 683 102 Stat. 683 Volume 104 Page 1388 104 Stat. 1388 Volume 111 Page 251 111 Stat. 251 Public Law 99-272 Public Law 99-509 Public Law 100-203 Public Law 100-360 Public Law 101-508 Public Law 105-33