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OIG: Medicare overstated fraud recoveries

Device Regulation Alert: Safety, Compliance and Reimbursement News, August 25, 2008

Medicare allegedly instructed outside auditors ignore government policies designed to accurately report fraud and as a result, the agency’s claim of preventing millions of dollars in fraud in 2006 are misleading, according to a New York Times article.

In a draft report reviewed by the Times, the OIG said one-third of spending for wheelchairs, oxygen supplies, and other medical equipment for fiscal year 2006 was improper. The report estimates the fraud totaled approximately $2.8 billion. In its report to Congress, CMS said it reduced the amount of durable medical equipment (DME) fraud to $700 million.

CMS hired AdvanceMed, a subsidiary of Computer Sciences Corporation, to audit Medicare DME spending. According to the Times, CMS officials told AdvanceMed to ignore an auditing protocol required by law. Instead of randomly selecting and comparing invoices to physicians’ records, auditors were allegedly instructed to only examine the invoices from DME suppliers.

Medicare introduced a competitive bidding program to help control costs and decrease fraud. Congress suspended the program, that was originally effective July 1.

The report, expected to be released next week, is still in draft form and the findings may be changed or edited by the OIG, the Times reported.

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