OIG sticks to script on Medicaid pricing

Wednesday, April 13, 2016

WASHINGTON – The Office of Inspector General has reiterated its recommendation that CMS match Medicaid reimbursement rates for HME to Medicare rates.

The recommendation, published this week in the OIG’s April 2016 “Compendium of Unimplemented Recommendations,” suggests that CMS seek legislative authority to limit Medicaid reimbursement rates for DMEPOS to Medicare rates and further reduce those rates through competitive bidding or manufacturer rebates.

Lowered reimbursement rates could result in approximately $30.1 million in potential savings for states and the federal government, according to the OIG.

CMS concurred with the OIG’s recommendation. The agency says it has sought legislative authority to make the changes but additional congressional action is needed.

CMS also pointed out that the president’s proposed budget for fiscal year 2016 includes a similar proposal for lowering Medicaid reimbursement rates.

Additionally, “States have the flexibility to administer their Medicaid programs in accordance with a CMS-approved state plan,” the agency says. “CMS communicates frequently…to inform them of all available options, including manufacturer rebates and competitive bidding procedures.”

The OIG believes that, if enacted, the expected savings would be $4.27 billion over a 10-year period.