CMS Lacks Oversight Of Millions Of Medicare Dollars For Durable Medical Equipment, According To GAO Report

Main Category: Medicare / Medicaid / SCHIP
Article Date: 05 Aug 2008 - 10:00 PDT

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CMS in the past year has approved Medicare billing privileges for two fictitious medical equipment suppliers that the Government Accountability Office established to test the ability of the agency to prevent fraud and has placed millions of dollars at risk, according to a GAO report obtained by the Associated Press, the AP/San Francisco Chronicle reports. According to the report, the two fictitious suppliers, based in Maryland and Virginia, had no clients or inventory and provided CMS with incomplete information and false documents that offered limited evidence of their legitimacy.

The report stated, "If real fraudsters had been in charge of the fictitious companies, they would have been clear to bill Medicare from the Virginia office for potentially millions of dollars worth of nonexistent supplies." In addition, the report stated that efforts by CMS to address the issue "will only be successful if those tasked with ensuring compliance exercise due diligence when conducting screenings and inspections."

Senate Homeland Security and Governmental Affairs Investigations Subcommittee ranking member Norm Coleman (R-Minn.), who requested the report, said, "This sting operation proves that there are gaps in the system and that scam artists can exploit -- and are exploiting -- those gaps."

CMS officials said that they agreed with the results of the report but added that the agency recently implemented new standards that require medical equipment suppliers to obtain certification before they can receive billing privileges. In addition, CMS has begun to require that suppliers retain documents from physicians and restrict the use of cell phones and pagers as primary business numbers for suppliers. CMS also has established a competitive bidding program for medical equipment under Medicare (Yen, AP/San Francisco Chronicle, 8/3).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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