January 2019

CMS Improperly Paid DMEPOS Suppliers

A U.S. Department of Health and Human Services, Office of Inspector General (OIG) review found that the Centers for Medicare & Medicaid Services (CMS) improperly paid $34 million to suppliers for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that were provided to beneficiaries during inpatient stays. These items should have been included under the Medicare Part A payments made to the inpatient facilities.

Per the report, suppliers were overpaid due to inadequate system edits that should have prevented or detected the overpayments. If the system edits had been designed properly since 2008, Medicare could have saved $223.1 million, and beneficiaries could have saved $56.3 million in deductibles and coinsurance that may have been incorrectly collected.

OIG recommends that CMS recovers the $34 million in improper payments; takes all necessary actions, including seeking legislative authority, to require suppliers to refund to beneficiaries up to $8.7 million in incorrectly collected Medicare Part B deductible and coinsurance amounts; identifies and recovers any improper payments to suppliers after the audit period, from January 1, 2015, through December 31, 2017; and corrects the system edits to fully prevent or detect overpayments to suppliers for DMEPOS items provided during inpatient stays.

To access the report, visit oig.hhs.gov/oas/reports/region9/91703035.pdf.

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