OIG Audit Finds Medicare Payments for PAP Therapy Complied With Requirements

CMS/Medicare

WASHINGTON—A Department of Health and Human Services Office of Inspector General (OIG) audit found that payments made to suppliers for positive airway pressure (PAP) devices largely complied with Medicare billing requirements. 

On April 27, the OIG released its findings from an audit on PAP device treatment as the first-line treatment for obstructive sleep apnea (OSA), as it’s covered under Medicare. According to the OIG, the audit was conducted because positive airway pressure, or PAP, devices had the second-highest improper payment amounts in the durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) category in 2017. The payments totalled to $495 million. Most errors occurred because providers provided insufficient documentation to support submitted claims. 

“Due to the improper payment amounts and high documentation error rate, we conducted this audit to determine whether claims for PAP devices met Medicare requirements,” said the OIG.

What the OIG Found

The OIG found that the Centers for Medicare & Medicaid Services (CMS) generally ensured that payments made to suppliers for PAP devices complied with Medicare billing requirements. Medicare payments to suppliers complied with Medicare billing requirements for 97 sampled PAP device claims. 

For the remaining 13 sampled PAP device claims, Medicare payments to suppliers did not comply with Medicare billing requirements. Specifically, Medicare made payments for PAP device claims that did not have the required documentation to support the services billed. In addition, some suppliers did not respond to OIG’s request for documentation to support the PAP device claims that were billed to Medicare. 

As a result, the OIG said:

  • Medicare paid for PAP device claims that did not have all the necessary documentation
  • It estimates that Medicare paid approximately $15.2 million for improper PAP device claims during its audit period that did not meet Medicare billing requirements

OIG Recommendations

Following the audit, the OIG recommended that CMS: 

  1. Establish and implement internal controls to prevent improper payments for replacement PAP devices
  2. Provide outreach and education to suppliers on document requirements

In a response, CMS did not explicitly state its concurrence or nonconcurrence with the first recommendation. CMS said that OIG did not stratify its sample between initial and replacement claims, making it unclear whether replacement devices pose a greater program integrity risk. CMS explained that the errors identified involved documentation submission rather than issues that could be resolved through automated claim processing controls. Additionally, CMS said it will share the audit results with its contractors to help determine whether medical review of replacement PAP devices should be prioritized.  

CMS concurred with the second recommendation and highlighted existing outreach through webinars, in-person training, individualized Targeted Probe and Educate (TPE) reviews and published articles. CMS cited its publication of new Medicare Learning Network materials in November 2025 and agreed to develop updated educational resources to reinforce documentation requirements, especially as documentation relates to PAP replacement devices. 

Find the full findings report here. 

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