Durable Medical Equipment Competitive Bidding Demonstration. Simulation of theImpact of OBRA 1987 on Reimbursement of Durable Medical Equipment

摘要

The report presents an analysis of the effects of the Omnibus BudgetReconciliation Act of 1987 (OBRA 87) on Medicare total allowed charges for durable medical equipment (DME) during 1989, the first year the new rules applied. Using different assumptions regarding inflation rates and changes in supplier billing, the report shows that allowed charges could range from a reduction of 4 percent to an increase of 13.4 percent. The report also shows that the 1989 fee schedules still reflected widely varying rates for the same or similar items in different carrier jurisdictions, although that variance is significantly reduced if fee schedules below the 10th percentile and above the 90th percentile are not considered. Overall the analysis shows that unless suppliers react to published fee schedule amounts and begin billing at those limits, that the OBRA changes have little impact on Medicare spending for DME. It also appears that the growth in DME reimbursement is more from a changing age structure for elderly beneficiaries than from large increases in prices or increased utilization per beneficiary.