According to a report released December 23, 2011, by the Office of the Inspector General (OIG), 26 percent of high- and medium-risk suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) and 2 percent of low/limited-risk suppliers required the Centers for Medicare & Medicaid Services (CMS) enforcement actions during their first year of enrollment as Medicare providers. Some suppliers in the sample received significant Medicare reimbursement before CMS’ contractor, the National Supplier Clearinghouse (NSC), conducted its first post-enrollment site visits to the suppliers’ business locations and CMS took enforcement action.
Historically, DMEPOS suppliers have presented significant program integrity problems for Medicare, the OIG report asserts. CMS requires NSC to review supplier enrollment applications, conduct unannounced site visits before and after enrollment, and assign newly enrolled suppliers a risk rating based on an assessment of fraud risk. OIG identified program integrity problems during suppliers first year in Medicare for a nationally representative sample of 229 suppliers enrolled during the period from October-December 2008. The report also identifies suppliers that omitted required information regarding ownership, management, criminal histories, or adverse legal actions from their applications.
Thirteen percent of high- and medium-risk suppliers and 4 percent of low/limited-risk suppliers omitted ownership or management information from their applications. Many suppliers in the OIG sample that omitted this information remained in Medicare through December 2010, suggesting that information omitted from applications can remain undetected for more than a year despite NSC oversight. Also, 4 percent of high- and medium-risk suppliers omitted from their applications information regarding owner or manager criminal histories or adverse legal actions taken against these individuals.
OIG stated that its report demonstrates that further scrutiny of the applicants that pose the highest risk is needed to prevent dishonest individuals from receiving Medicare payment and recommended that CMS conduct post-enrollment site visits earlier for new suppliers that receive the most money from Medicare, apply investigative techniques and tools to identify any owners or managers of suppliers that are not reported on supplier applications as required, and take appropriate action regarding suppliers that omit information from applications.
CMS concurred with the recommendations and stated that it is using authorities granted under the Patient Protection and Affordable Care Act (ACA) to address potential vulnerabilities.
The full report can be found on the OIG website.
