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OIG report: CMS should reduce cath payments

OIG report: CMS should reduce cath payments

WASHINGTON – Medicare payments for intermittent urinary catheters were 3.4 times supplier acquisition costs in fiscal year 2020, according to a new analysis by the Office of Inspector General. 

In total, Medicare allowed $407 million in payments for these items, while suppliers paid approximately $121 million to acquire them.  

Each of the three billing categories for intermittent urinary catheters (straight tip, curved tip, and sterile kit) showed large differences between Medicare payments and acquisition costs, which indicates a potential for substantial savings both to Medicare and beneficiaries, who share responsibility for paying the Medicare-allowed amount. 

“We recognize that suppliers face other costs beyond the cost of acquiring catheters and need an opportunity to maintain a profit,” stated the OIG. “However, the magnitude of the differences between Medicare reimbursements and supplier acquisition costs indicates that Medicare and its beneficiaries can achieve substantial savings while allowing for other costs.” 

To conduct the analysis, the OIG used data obtained from a report on the home health care industry where it was estimated that for every dollar spent on acquisition costs, suppliers spent an additional 72 cents in other costs. The OIG applied this same proportion to its data on acquisition costs for intermittent urinary catheters to obtain an example of supplier total costs. 

The OIG recommends that CMS lower Medicare’s payment rates for intermittent urinary catheters but take steps to ensure beneficiary access to the catheters that best serve their medical needs. 

CMS stated that it will take the OIG’s recommendation under consideration.


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