Bidding Could Save N.Y. Medicaid Millions

HHS OIG report recommends Empire State agency implement competitive bidding across 54 DME items.

New York providers serving Medicaid patients might have to contend with competitive bidding in more ways than one. A new report from the Department of Health and Human Services’ Office of Inspector General says the New York Medicaid program could save millions of dollars if it implemented its own state-level competitive bidding.

The report reviewed 54 of the 70 selected DME items and found that the New York Medicaid program could have saved an estimated $8.9 million during 2011 and 2012 by establishing a competitive bidding program. The report found that Empire State’s Medicaid agency reimbursed providers approximately $50.8 million for DME items with payment rates above the average Medicare CBA payment rate during HHS OIG’s audit period. The OIG estimated that the state agency could have reduced its payments to $41.9 million if it had used a Medicare-style competitive bidding program.

In its review, the OIG said New York Medicaid could have reduced various broad categories by considerable percentages:

  • Oxygen supplies and equipment could have been reduced by 28 percent on average.
  • Standard power chairs, scooters and related accessories by 14 percent.
  • Complex rehab by 11 percent.
  • Mail-order diabetic supplies by 9 percent.
  • Enteral equipment and supplies by 15 percent.
  • CPAPSs, RADs and related items by 18 percent.
  • Hospital beds and related supplies by 18 percent.
  • Walkers and related accessories by 32 percent.

The genesis for the study was a separate HHS OIG audit that concluded the New York Medicaid program could have saved an estimated $5.9 million on diabetic test strips during a one-year period if it had obtained pricing similar to that which Medicare obtained via its competitive bidding program.

The full report is available at http://1.usa.gov/1MCE6v8, and a summary of the report published by the American Association for Homecare is available at http://bit.ly/1AXcGv7.

HHS OIG has generated several reports suggesting various state Medicaid programs adopt competitive bidding and similar reimbursement cuts, including California, Illinois, Indiana, Minnesota, New Jersey and Ohio.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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