Audit of Medicaid Payments for Oxygen-Related Durable Medical Equipment and Supplies

EXECUTIVE SUMMARY:

The report provides summary results of audits completed in 9 States and additional analyses in 41other States of paid claims for oxygen related durable medical equipment (DME) and supplies.  The audits were made to determine whether State Medicaid programs reimbursed providers in excess of Medicare payment limits for DME and supplies used to provide oxygen.  We found that Medicaid paid providers in 6 of the 9 States approximately $12.7 million (Federal share $7.3 million) more than Medicare would have paid.  Further, our analyses in the other 41 States demonstrated that significant additional savings are possible.  We recommended that the Centers for Medicare & Medicaid Services instruct those State agencies that limit Medicaid rates to Medicare reimbursement levels to apply Medicaid payment limits for oxygen-related DME and supplies correctly and in a timely manner, and alert the remaining State agencies to the opportunity to reduce Medicaid payments by limiting reimbursement rates for oxygen-related DME and supplies to the Medicare allowable amounts.