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HRD-78-60 1 (1978-07-06)

handle is hein.gao/gaobaaxpl0001 and id is 1 raw text is: DOCUMENT RESUME 06538 - [B19269171 Savinqs Available by Contracting for Medicaid Supplies ard Services. HRD-78-60; B-164031(3). July 6, 1S78. 30 pp. 2 appendices (6 pp.). Report to the Conqress; by Elmer B. Staats, Comptrcller General. Issue Azea: Health Programs: Reimburseuent Folicies and Utilization Controls (1208). Cor. ct: Human Resourccs Div. Budcet Function: Health: Health Care Services 4551)o orqanization Concerned: Department of health, Iducaticn, and Welfare. Oonqressional Relevance: House Committee on Interstate and Foreiqn Commerce; Senate Committee cn Fintnce; Congress. Authority: Social Security Act, as amended, title XIX (42 U.S-.. 1396). Cinical Laboratory Improvement Ict of IS77; S. 705 (95th Corg.); H.R. 190S (95th Cog.); 1. Sept. 95-36C. Sociail Security kmendme.ts of 1967 (F.L. 90-248); H.B. 1208C 90th cong.). Medicare Act. -45 C.f.B. 450. H.R. 62 1 (95th Cong.). S. Rept. 92-1230. H. Re x. 95-1004. B-If4031(4) (19721. Federal funds provided by the medicaid prcgram are used to purchase medicaid supplies and services, including eyeqlasses, oxygen, durable medical 2quipment, and clinical laboratory services. Each State has primary responsibility for administering its medicaid program. Although tke Social Security Act requires that State medicaid programs provide certair tasic services to all eligible persons, sedi-aid coverage for m iscellaneous supplies and services is not uniform. Findinqs/Conclusions: The medicaid prcgram could realize considerable sdvinqs if the States used competitively bid or negotiated contracts to purchase medical supplies cr services for medicaid recipients. States using direct contract methods ootain supplies at lower prices than those States afplying the criteria of usual and customary as peraitted ty regulaticns. In three Noctheas-ern states, medicaid bas paying higher pLices for clinical laboritory services than other purchasers -even though the program was a large consumer of -such services. Cther purchasers take advantage of volume and prcfessional discounts, lower fee schedules, and direct contracting to ottain ketter prices. 1he issue of whether direct ccntracting by States is consistent with freedom-of-choice provisions of the Social Security Act is unclear, but GAO helieves that eyeglasses, oxyqen, and other items ot durable medical equipment can be purchased through competitively awarded contracts without conflicting with provisions of the act. Becomsendalions: The Administrator of the Health Care Financing Administration should: publish regulations which encourage States tc purchase eyeqlasseb, oxygen, wheelchairs, and cther durable medical eqiipment through competitive bids or comptitive negotiation;

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