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SAVINGS AVAILABLE BY CONTRACTING FOR MEDICAID SUPPLIES AND LABORATORY SERVICES

NCJ Number
66098
Author(s)
ANON
Date Published
1978
Length
36 pages
Annotation
RESULTS AND RECOMMENDATIONS ARE REPORTED FROM A GENERAL ACCOUNTING OFFICE (GAO) INVESTIGATION OF STATE PURCHASES OF MEDICAID SUPPLIES AND LABORATORY SERVICES.
Abstract
UNDER MEDICAID, RECIPIENTS ARE ENTITLED TO CHOOSE THE PROVIDER OF THEIR HEALTH CARE SERVICES. IN THE PAST, THIS PROVISION HAS BEEN THE BASIS FOR CHALLENGING STATE OR LOCAL EFFORTS TO CONTRACT COMPETITIVELY OR OTHERWISE DIRECTLY PROVIDE SUCH EQUIPMENT ITEMS AND SERVICES AS WHEELCHAIRS AND LABORATORY TESTS. GAO COMPARED PRICES PAID FOR EYEGLASSES, OXYGEN, AND WHEELCHAIRS BY VARIOUS STATES AND FEDERAL AGENCIES AND FOUND THAT COMPETITIVE BUYING PRODUCED SIGNIFICANT SAVINGS. FURTHER, STATE MEDICAID PROGRAMS WERE FOUND TO PAY HIGHER PRICES FOR CLINICAL LABORATORY SERVICES THAN OTHER PURCHASERS, EVEN THOUGH MEDICAID IS A VOLUME USER. THE CONGRESS, WITH GAO SUPPORT, HAS BEEN CONSIDERING LEGISLATION WHICH WOULD PERMIT COMPETITIVE BIDDING ON AN EXPERIMENTAL BASIS FOR MEDICAID LABORATORY SERVICES TO PREVENT MEDICAID FROM PAYING A LABORATORY MORE THAN OTHER PURCHASERS OF SUCH SERVICES. THE ISSUE OF WHETHER OR NOT DIRECT CONTRACTING BY STATES TO MINIMIZE MEDICAID COSTS IS CONSISTENT WITH THE FREEDOM-OF-CHOICE PROVISIONS OF THE SOCIAL SECURITY ACT IS STILL UNCLEAR. TO REMOVE ALL DOUBT THAT COMPETITIVE PURCHASES OF MEDICAID SUPPLIES ARE AUTHORIZED, CONGRESS SHOULD AMEND THE MEDICAID LAW TO EXCLUDE SELECTED ITEMS OF EQUIPMENT FROM THE FREEDOM-OF-CHOICE PROVISION. APPENDIXES CONTAIN THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE'S (HEW'S) FAVORABLE COMMENTS ON THE REPORT AND A LIST OF PRINCIPAL HEW OFFICIALS RESPONSIBLE FOR ADMINISTERING ACTIVITIES DISCUSSED IN THIS REPORT. (AUTHOR ABSTRACT MODIFIED--RCB)