Department
of Health and Human Services
Office of Inspector General -- AUDIT
"Office of Inspector General's Partnership Plan: Montana Legislative Auditor's
Office Report on Medicaid Expenditures for Durable Medical Equipment," (A-06-96-00042)
May 20, 1996
Complete
Text of Report is available in PDF format (984 kb). Copies can also be obtained
by contacting the Office of Public Affairs at 202-619-1343.
EXECUTIVE SUMMARY:
This review of the Medicaid Expenditures for Durable Medical Equipment in Montana
for the period from July 1, 1993 through June 30, 1995 was conducted by the Montana
Legislative Auditor (MLA) as part of our partnership efforts with State Auditors
to expand coverage of the Medicaid program. We provided the MLA with copies of
the Office of Inspector General audit reports on this subject and technical assistance
during the course of the audit. We also performed a desk review of the MLA's audit
report to satisfy ourselves that the report can be relied upon and used by the
Health Care Financing Administration (HCFA) in meeting its program oversight responsibilities.
The MLA performed a limited scope review of the Montana Medicaid expenditures
for medical equipment and supplies. The Medicaid program is administered by the
Department of Public Health and Human Services (Department). The objectives of
the review were to (1) determine whether the Department pays more than necessary
for medical equipment and supplies and (2) identify procedures to achieve cost
savings for the Department in the acquisition of medical equipment and supplies.
The MLA's report on the purchasing and payment procedures discussed areas of potential
cost savings and recommended that:
- The Department evaluate competitive bidding for term contracts for oxygen concentrators
to reduce costs. The MLA estimated if the Department purchased concentrators
using the General Services Administration contract pricing and the Veterans Administration
maintenance contract pricing, the annual cost savings could be between $336,000
and $504,000 annually.
- The Department require a written description and/or prior authorization of
all Medicaid items paid from invoices billed under miscellaneous equipment identification
codes. The MLA identified $134,091 in questionable or unallowable Medicaid costs
paid to providers who billed for equipment using a miscellaneous equipment identification
code.
- The Department work with the Department of Administration to evaluate whether
the current State term contract for diapers could be modified and/or expanded
to achieve Medicaid cost savings. The MLA estimates potential annual savings
of $24,332 through the use of a term contract.
- The Department define allowable incontinence supplies and document the medical
necessity of these supplies including disposable wipes.
We plan to share this report with other States to encourage their participation
in our partnership efforts.