OIG Says MA Organizations, CMS Can Do More To Prevent DME Fraud

WASHINGTON—The United States Department of Health and Human Services Office of Inspector General (OIG) recently determined that there is more that could be done by the Centers for Medicare & Medicaid Services to prevent durable medical equipment, prosthetics and orthotics supplies (DMEPOS) fraud in Medicare Advantage.

This issue brief focuses on fraud risks related to DMEPOS suppliers in Medicare Advantage. Medicare Advantage organizations (MAOs) and Centers for Medicare & Medicaid Services (CMS) take steps to screen fraudulent suppliers and prevent them from billing Medicare Advantage. However, the OIG revealed in the brief that gaps exist in this screening that can be exploited by fraudulent persons. Specifically, OIG found:

Gaps in MAO screening:

MAOs conduct some screening checks of in-network suppliers but fewer checks of out-of-network suppliers.

Gaps in CMS screening:

• CMS does not screen all DMEPOS suppliers before they bill Medicare Advantage because they are not all enrolled in Medicare.
• CMS uses a fraud prevention tool (known as the Preclusion List) to prevent certain DMEPOS suppliers from billing Medicare Advantage; however, the list has limitations in preventing fraud.
• Suppliers with the least screening—those that bill out of network and are not enrolled in Medicare—pose an increased fraud risk to the program.

OIG recommended that CMS take the following actions:

• Ensure that MAOs strengthen checks of out-of-network DMEPOS suppliers.
• Strengthen the use of the Preclusion List to prevent fraudulent DMEPOS suppliers from billing Medicare Advantage.
• Require that all DMEPOS suppliers that bill Medicare Advantage be enrolled in Medicare, or seek statutory authority to do so if necessary. 

OIG said CMS concurred with or stated that it would take into consideration all of OIGs recommendations.