GAO finds gaps in equpment-supplier oversight

A series of tests conducted on behalf of the Government Accountability Office has found significant weaknesses in CMS's medical-equipment supplier screening process. In a new report, the agency described how investigators set up two phony DME providers, using deceptive names and bank accounts, which were approved for Medicare billing despite having no inventory or clients. While CMS originally rejected the phony companies' applications because they had no inventory, the sham companies were able to convince CMS that they had contracts with nonexistent wholesale suppliers, GAO said.

CMS, in looking at the investigation's results, admitted that the tests had found meaningful gaps in oversight, and said it would make more efforts to strengthen its supplier enrollment process. The agency itself estimates that that Medicare paid $1 billion in improper durable medical equipment, prosthetics, orthotics and supplies claims from April 2006 through March 2007, partly due to supplier fraud.

While this must be painful for CMS to admit, it's just one of a handful of painful public disclosures regarding oversights that have come of late. For example, last month CMS was forced to acknowledge that it had paid out almost $100 million [1] to DME providers for equipment "prescribed" by doctors who were dead at the time.

To find out more about the GAO report:
- read this Modern Healthcare article [2] (reg. req.)

Related Articles:
Medicare paid almost $100M to dead doctors since 2000, report finds [1]
Medicare fraud costs CMS billions [3]
New HHS program targets Medicare fraud [4]
Medicare fraud growing due to design of IT systems [5]