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

We found that the New York Medicaid program could have saved an estimated $8.9 million in 2011 and 2012 by establishing a competitive bidding program for durable medical equipment (DME) items similar to pricing that Medicare obtained through its Competitive Bidding Program. For 54 of the 70 selected DME items that we reviewed, we determined that average Medicare payment rates obtained through competitive bidding were significantly lower than New York's average Medicaid payment rates.

We recommend that the Department of Health (State agency) establish a competitive bidding program that functions similarly to Medicare's Competitive Bidding Program for the reimbursement of 54 selected DME items, which could have resulted in cost savings of approximately $8.9 million for our 2 year audit period. The State agency disagreed with our recommendation.