Corporate Compliance

OIG: Medicare overstated fraud recoveries

Compliance Monitor, August 27, 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 an OIG audit.
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 in FY 2006 to $700 million.
CMS hired AdvanceMed, a subsidiary of Computer Sciences Corporation, to audit Medicare DME spending. According to the OIG report, CMS officials told AdvanceMed to ignore Comprehensive Error Rate Testing program, 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.

To read the OIG audit click here


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