The purchase order does not stand alone as formal contract obligation, HCFA says.

A controversy has developed over whether a purchase order for a large item of movable equipment amounts to an obligation under the new Medicare Capital Prospective Payment System (PPS) of the Health Care Financing Agency (HCFA). HCFA's draft revision to the Provider Reimbursement Manual indicates that a p.o. doesn't stand alone as a binding contract and that such purchases should be by formal contract. Some hospital trade groups argue that, in the normal practice of most hospitals, the p.o. is a contract to buy and should be treated as an obligation under the Medicare rules. In this dialogue, Dr. Decker addresses the issues of this controversy.