Medicare Pays ‘Above-Market Prices’ for Medical Supplies, HHS Inspector General Reports Says
Medicare and its beneficiaries are charged "significantly higher" amounts for standard medical supplies such as wheelchairs and saline solution compared to regular market prices and prices paid by the Department of Veteran Affairs, according to a new report from the HHS inspector general. USA Today reports that a review of the findings, scheduled to be released Wednesday, indicated that Medicare spent $1.7 billion in 2000 on 16 common medical items. If Medicare had been charged the same prices as the VA, $958 million would have been saved, a 56% savings. For example, a standard wheelchair cost Medicare $570.68, compared to the VA's price of $127.72, 78% less than Medicare's cost. USA Today reports that some of these savings could have been passed on to Medicare beneficiaries who have no supplemental insurance coverage and who must pay 20% of the cost of medical supplies out-of-pocket. CMS Administrator Tom Scully attributed the price discrepancy to a congressionally mandated moratorium on Medicare's authority to demand "inherently reasonable" prices from suppliers. Congress passed the moratorium on competitive bidding in 1997 in response to a request from medical suppliers, USA Today reports. Because the moratorium has expired, Scully said Medicare is working to lower the prices it pays for medical supplies. In addition, House Ways and Means Committee Chair Bill Thomas (R-Calif.) is planning to introduce legislation that would allow Medicare to bid competitively, according to Thomas spokesperson Christin Tinsworth (Welch, USA Today, 6/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.