Review of Medicare Part B Reimbursement of Hospital Beds

This final audit report points out that the Health Care Financing Administration (HCFA) needs to explore a new reimbursement methodology for hospital beds used in the home. Such a methodology should consider a hospital bed's useful life and the many times a bed can customarily be rented. The HCFA should consider options that would; (1) lower the monthly rental payments, but extend the rental reimbursement period and eliminate the purchase option, (2) separate the equipment costs from other costs and profit in determining the monthly Medicare rental payment, or (3) use a competitive bidding process in paying suppliers for hospital bed usage.