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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2005-73
October 2005
State could save millions in Medicaid costs by better managing medical equipment and non-emergency medical transportation programs
This audit reviewed the cost-effectiveness and efficiency of two state programs helping Medicaid recipients with medical equipment (Durable Medical Equipment) and transporting recipients to medical appointments (Non-Emergency Medical Transportation). Both programs cost the state about $100 million from January 2003 through March 2004. The state works with nearly 1,300 providers to distribute medical equipment to recipients, and one contractor to transport recipients to appointments. The following highlights potential savings with better program monitoring.
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Bidding equipment contracts could save $5.4 million |
Federal officials showed in
Florida and Texas a 17 to 22 percent reduction in equipment costs when
these pilot project states competitively bid the equipment contracts.
Auditors found Missouri could save $5.4 million annually with competitive
bids. As of May 2005, state officials had not initiated such bidding. (See
page 5)
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Missouri pays more for medical equipment than other states |
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Medical equipment bought from non-Missouri providers |
Despite a state law requiring
purchase preference for Missouri products, auditors found $4.8 million
paid to non-Missouri medical equipment providers. Auditors analyzed the
out-of-state claims and found Missouri providers offered the same items.
(See page 7)
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New transportation contract may not have lowered costs |
State officials were in the
process of rebidding the Non-Emergency Medical Transportation contract
when the Commissioner of Administration announced the state's plan to
cancel the current contract. Under terms of the contract bid proposal,
costs may not have decreased since high program costs from prior years
were being used to develop the new contract rates. (See page 9)
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Contractor paid millions from poorly monitored program |
Auditors found the state paid
the Medicaid transportation contractor $44.1 million over 15 months, with
the company realizing at least $19 million in gross profit. The contractor
also received a 87 percent gross profit margin on the mileage
reimbursement program. The state contract allowed the contractor to select
the method of transportation. (See page 10)
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Contractor arranged for most recipients to use high cost taxis |
The transportation contractor
made more money when it arranged medical transportation through taxis or
recipients drove themselves, instead of using the often cheaper option of
public transportation. In one example, the contractor received $2.80 when
a recipient used public transportation, but $34.90 if a recipient used a
taxi. In another example, a recipient wanted to drive himself. The
contractor reimbursed the recipient 15 cents a mile, or $3.60 for the
trip, then the state paid the contractor $98.44 for administrative
services. (See page 11)
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Missouri State Auditor's Office
moaudit@auditor.mo.gov
