In a story broken by the New York Times, the Centers
for Medicare & Medicaid Services (CMS) may have hidden more
than $2.1 billion in fraudulent payments for durable medical
equipment (DME). The Times holds a confidential draft of a
report from the federal Office of the Inspector General alleging
that CMS officials instructed Medicare’s auditing program, the
AdvanceMed Corporation, to forgo an auditing tactic that would have
matched 2006 Medicare seller’s claims against physicians’ records,
and instead to inspect only the seller’s documents. Without the
comparison of documents, false claims totaling some 24 percent of
all Medicare claims went unaccounted for in the audit. Malcolm
Sparrow, a Harvard University professor who focuses on health care
fraud was quoted as saying, “The supplier has an incentive to
supply fabricated documents or to imply that medical records
support a purchase when they don’t. If you don’t ask the physician
or ask for medical records, you can’t really verify anything.”
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