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News
The federal watchdog is sounding the alarm on rampant fraud in durable medical equipment billing within Medicare Advantage. A new OIG report found that out-of-network suppliers face far less scrutiny — and bill up to seven times more than enrolled suppliers for the same items. The agency is urging CMS and MA organizations to tighten screening and make better use of existing fraud prevention tools.
The HHS Office of the Inspector General (OIG) is pushing for a major crackdown on durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fraud in Medicare Advantage (MA). A new report found that MA organizations are far less rigorous about screening out-of-network suppliers compared to in-network ones — and that CMS isn't fully leveraging its own fraud prevention tools to stop bad actors before they bill.
The numbers tell a striking story: out-of-network suppliers billed an average of $1,399 per month for orthotics supplies, compared to just $210 for Medicare-enrolled suppliers — a sevenfold difference. Two MA organizations told the OIG that out-of-network providers accounted for "nearly all" fraud schemes in their plans.
By the Numbers:
Why it matters: DMEPOS fraud has long drained Medicare dollars, but the MA program's looser enrollment requirements create a significant blind spot. With MA costs already exceeding traditional Medicare, unchecked fraud threatens the program's financial sustainability — and ultimately, taxpayer dollars. CMS has agreed to consider all of the OIG's recommendations.
