OIG: Eliminate capped-rental maintenance fee

Sunday, November 2, 2003

November 3, 2003

WASHINGTON - Medicare and its beneficiaries could save $100 million a year by eliminating the semi-annual maintenance and service fee paid to HME providers once a capped-rental period ends, according to the OIG.

That little bit of reimbursement math appears on page 10 of a 24-page report entitled: The Department of Health and Human Services and the Department of Justice Healthcare Fraud and Abuse Control Program for FY 2002. The report was released in September.

Instead of paying providers a maintenance fee every six months following the end of a 15-month capped rental period, the OIG recommends that CMS pay only for repairs when needed.

A five-year study begun in 1996, disclosed that Medicare paid “substantially more” for maintenance on rented equipment than it did for repairs on purchased equipment. Furthermore, an analysis of supplier documentation found only 9% of capped rental equipment received any maintenance and servicing, according to the report.

CMS agreed with the recommendations and stated it would consider a legislative initiative to eliminate the rental option.