The OIG says: You got me

Tuesday, July 31, 2007

WASHINGTON - The OIG raised the white flag in mid June, admitting it had no idea how to determine when providers charge Medicare too much for products and services.
In a proposed rule issued in 2003, the OIG indicated that it would consider a claim "substantially in excess" if a provider charged Medicare more than 20% of what other customers usually paid for the same product. The impetus for this: Tto prevent providers from gouging Medicare. But as times change and providers look to offset Medicare reimbursement cuts by boosting cash sales, "substantially in excess" begins to look more and more "antiquated," said Jeff Baird, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.
While the OIG has given up trying to define substantially in excess, the regulation still applies. With that in mind, Baird offered the following rule of thumb: The OIG probably won't be too concerned if a provider discounts a product 20% or less than the Medicare allowable. But for discounts more than 20%, providers should be able to document the cost savings.