'Gray market' for diabetic test strips prompts fraud questions

Signs soliciting cash for diabetic test strips in several states spotlight a growing “gray market” that could also be an indication of more nefarious activity, according to news reports.

In Western Massachusetts, 22News reports that it posed as a test strip seller and responded to advertisements throughout the region. On the phone, one buyer offered $40 for a box of test strips that normally costs $80, but a courier who met the station’s camera crew refused to answer questions.

The Department of Health and Human Services (HHS) told the station that although there is no specific law against selling test strips, there are restrictions against knowingly selling and purchasing test strips that were paid for by Medicare. A study published in March found that a competitive bidding program for diabetic test strips has lowered quality standards and driven up Medicare costs.

In Virginia, roadside signs and Craigslist ads offer cash for diabetic test strips, according to 13NewsNow, leaving some providers worried about the condition of resold strips. However, those purchasing the test strips say they are providing a necessary service to uninsured patients who couldn’t afford the necessary equipment otherwise.  

The FDA told the station that although it is technically legal to buy and sell test strips, the agency does not recommend it since test strips may be compromised and could pose an infection risk.

In 2014, the HHS Office of Inspector General found nearly 5,000 suppliers had unusually high billing for at least one questionable billing measure, including multiple Medicare claims for diabetic test strips for the same patient in overlapping time frames. These questionable tactics led to $425 million in overpayments.

- here’s the 22News article
- read the13NewsNow report