OIG: Medicaid pays too much for oxygen

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Sunday, August 15, 2004

August 16, 2004

WASHINGTON -   If CMS wants to save millions of dollars on home oxygen, it should advise state Medicaid programs to reduce reimbursement to the Medicare allowable, according to the OIG.
In a report dated July 16, 2004, the OIG summarized the results of audits competed in nine states and analyses in 41 other states of limited data related to paid claims for home oxygen. The audits were made to determine whether Medicaid programs reimbursed providers in excess of Medicare payment limits for DME and supplies used to provide oxygen.   
The OIG found that Medicaid paid providers in six of the nine states approximately $12.7 million (federal share $7.3 million) more than Medicare would have paid.  Further, the OIG’s analyses in the other 41 states “demonstrated that significant additional savings are possible” by reducing reimbursement to the Medicare allowable, the report stated.
The OIG recommended that the CMS instruct states that limit Medicaid rates to Medicare reimbursement levels to avoid overpayments by applying Medicaid payment limits for oxygen-related DME and supplies correctly and in a timely manner. It also suggested that CMS 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.

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