The Minnesota Medicaid Program Could Significantly Lower Payment Rates for Selected Durable Medical Equipment and Supplies

The Minnesota Medicaid program could have saved an estimated $2.27 million by establishing a competitive bidding program for durable medical equipment and supplies (DME items) similar to pricing that Medicare obtained through its Competitive Bidding Program. The Competitive Bidding Program sets lower payment rates than conventional Medicare payment rates for selected DME items while ensuring beneficiary access to quality items and services. We determined that average Medicare payment rates obtained through competitive bids for the 42 selected DME items were significantly lower than Minnesota's average Medicaid payment rates.

We recommended that the Minnesota Department of Human Services (State agency) establish competitive bidding that functions similarly to Medicare's Competitive Bidding Program for the purchase of the 42 selected DME items, which could have resulted in cost savings of approximately $2.27 million for the 1-year period we reviewed. The State agency concurred with our finding that Minnesota could achieve lower rates of payment for selected DME items. However, the State agency did not concur entirely with the recommended approach to lowering the rates associated with the categories of DME.