Medicaid overpays millions for diapers

A lack of competitive bidding processes among state Medicaid agencies caused the program to overpay for diapers by about $62 million in 2012, according to a report released by federal auditors on Monday.

Only five state Medicaid agencies have implemented competitive bidding programs for "disposable incontinence supplies," according to the inspector general for the department of Health and Human Services.

Those states reported saving up to of 50 percent on those supplies, the IG report found.

States nationwide implemented cost control mechanisms, the report noted, but Medicaid could have saved about $62 million if competitive bidding processes were adopted nationwide.

Those savings would amount to 23 percent of the Medicaid bill for disposable incontinence supplies, which include nine categories of diapers and liners, including products for adults and children.

Medicaid requires the coverage of home health services used by patients who qualify for nursing care. That requirement includes coverage for diapers, which accounted for $266 million in Medicaid spending in 2012.

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