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Medicare Payments: Use of Revised “Inherent Reasonableness” Process Generally Appropriate
Leslie G. Aronovitz (au)
In 1998, Medicare paid $6 billion for med. equip. & supp. (ME&S) on behalf of beneficiaries who live at home or in long-term-care facilities. Medicare uses a fee schedule to determine the amount it will pay for most ME&S. Even when Medicare paid more than market costs for certain ME&S, the HCFA had almost never adjusted pay. amounts. This was because the process for changing unreasonably high or low Medicare payments, called the “inherent reasonableness” process, was slow & cumbersome & not even available for some items. Congress authorized HCFA to use a revised inherent reasonableness process to adjust Medicare pay. by up to 15% a year for such items. This report examines HCFA’s actions to implement this authority. Tables
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