Review of Medicare Part B Fee Schedule Amounts for Semi-Electric Hospital Beds

EXECUTIVE SUMMARY:

Prior OIG reports found that Medicare rates for rental of semi-electric hospital beds were substantially higher than other payers' rates. This final report points out that Medicare rates for semi-electric hospital beds remain too high. We found that billing codes of fee schedule amounts were excessive when compared to combinations of other fee schedule amounts that should have been used in many instances. We estimate that the use of two alternative billing code combinations could result in savings of approximately $34.3 million per year, consisting of $25.9 million in rental payments and $8.4 million for maintenance and servicing fees. Moreover, Medicare beneficiaries, Medicaid programs, or supplemental insurers could save approximately $8.6 million per year in coinsurance amounts. We recommended that the Centers for Medicare and Medicaid Services (CMS) either; (1) reimburse for semi-electric hospital beds based on the least costly alternative billing codes, or (2) issue a final rule on the application of CMS' "inherent reasonableness" authority so that this authority can be used to adjust the fee schedule amounts for these billing codes. The CMS stated a final rule on inherent reasonableness will be published in the near future and indicated it will consider reviewing payments for semi-electric hospital beds.