Review of Medicaid Payment Amounts for Oxygen Related Durable Medical Equipment and Supplies, Wisconsin Department of Health and Family Services, Madison, Wisconsin

This report presents the results of our Review of Medicaid Payment Amounts for Oxygen Related Durable Medical Equipment and Supplies.We determined that providers received reimbursements for these items of durable medical equipment (DME) and supplies at rates that were higher than the Medicare allowable amount.Based on our review of payments for Medicaid DME and supply claims with dates of service during the period October 1, 1997 through June 30, 2000, savings of approximately $685,500 could have been realized if the Medicaid rates had been limited to amounts allowable under the Medicare program. This annual savings of approximately $250,000 would result in a cost savings of approximately $1,250,000 over a five-year budget cycle.The higher reimbursements occurred because the State agency set the reimbursement limits for these items above the dollar amount allowed for similar items under the Medicare program.We are recommending that the State limit the maximum allowable price for DME and supplies to an amount equal to or less than the Medicare allowable amount for the same items.