Bid program would save Medi-Cal millions, OIG says

Thursday, April 3, 2014

WASHINGTON – Medi-Cal, California’s Medicaid program, could have saved $3.9 million on standard power wheelchairs, oxygen systems and oxygen concentrators in 2011 by using a competitive bidding program, the Office of Inspector General (OIG) has found.

In its report, the OIG recommended Medi-Cal establish a bidding program like Medicare’s, or revise its reimbursement methodology so pricing is more in line with bid prices.

Though it disagreed with the OIG’s estimated savings, Medi-Cal agrees it should change its reimbursement methodology in 2014, according to the report. 

“The state agency indicated that it would be more cost-effective to align DME rates to 80% of Medicare’s rates annually and that it will update its DME Medi-Cal rates in 2014,” the report stated. 

Medi-Cal also said it would review a competitive bidding program to determine the costs and benefits associated with implementing such a program in the future, according to the report.

The OIG reviewed $12 million in Medi-Cal payments for standard power wheelchairs, oxygen systems and oxygen concentrators. Auditors compared payments made by Medi-Cal to those made in certain cities in California as part of Round 1 of competitive bidding.