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HRD-83-73 1 (1983-07-08)

handle is hein.gao/gaobabnaj0001 and id is 1 raw text is: UNITED STATES GENitRAL ACCOUNTING OFFICE ca WASHINGTON, D.C. 20548 HUMAN RESOURCES July 8, 1983 DIVSION Carolyne K. Davis, Ph.D. Administrator Health Care Financing Administration Department of Health and Human Services Dear Dr. Davis: Subject: Analysis of Durable Medical Equipment Claims at Kansas City Blue Shield (GAO/HRD-83-73) Our office is analyzing reimbursement for Durable Medical Equipment (DME) at four Medicare carriers covering all or a por- tion of five Statesl!. Our work was requested by the Chairman of the Senate Committee on Finance. Because of Congressional, industry, and Health Care Financing Administration (HCFA) inter- est in the probable effects of July 1982 HCFA instructions to its carriers on DME reimbursement, we will report periodically on our progress. This is the first such report and it covers work done at Kansas City Blue Shield completed as of June 1983. The problem of excessive DME rental payments--which the recent HCFA instructions encouraging the purchase of low-cost items (defined as $120 or less) are intended to minimize--has been the subject of HCFA-financed and GAO studies. In July 1982 we issued a report entitled Medicare Payments for Durable Medi- cal Equipment are Higher than Necessary (HRD-82-61). In this report, we estimated, based on 10 statistical samples at 6 car- riers, that excess rental payments were about $2 million or 21 percent of these carriers' total 1979 DME payments. We also estimated that about one-third of these excess payments could have been avoided if a 1977 law had been implemented requiring Medicare reimbursement based on the purchase of DME items when more economical than rental. in HRD-82-61 we recommended that 1/The four carriers and States included in the review are: Prudential Insurance Company of North America (Georgia); Equitable Life Assurance Society of the United States (Idaho); Transamerica Occidental Life Insurance Company (Southern California); and Blue Shield of Kansas City (Portions of Kansas and Missouri). (106243)

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