OIG: Reduce reimbursement for semi-electric beds

Sunday, January 12, 2003

January 13, 2003

WASHINGTON - Medicare rates for semi-electric hospital beds are "substantially higher" than other payer rates, and CMS should reduce them, the OIG concluded in a December report.

The OIG found that fee schedule amounts were excessive when compared to combinations of other fee schedule amounts that should have been used in many cases.

The use of two alternative billing code combinations could result in savings of approximately $34.3 million per year, consisting of $25.9 million in rental payments and $8.4 million for maintenance and servicing fees. Moreover, Medicare beneficiaries, Medicaid programs, or supplemental insurers could save approximately $8.6 million per year in coinsurance amounts, the OIG reported.

The OIG recommends that the CMS either (1) reimburse for semi-electric hospital beds based on the least costly alternative billing codes; or (2) issue a final rule on the application of CMS' "inherent reasonableness" authority so that this authority can be used to adjust the fee schedule amounts for these billing codes.

In response to the report, CMS stated a final rule on inherent reasonableness will be published in the near future and indicated it will consider reviewing payments for semi-electric hospital beds.