CMS OVERSIGHT OF MEDICARE DEVICE FRAUD INADEQUATE, GAO SAYS

The Centers for Medicare & Medicaid Services (CMS) provides insufficient oversight of a national clearinghouse that was hired by the CMS to deter fraud by suppliers of medical devices to the government healthcare program, concludes a new report from the Government Accountability Office (GAO).

The CMS's oversight has not been sufficient to determine whether the National Supplier Clearinghouse (NSC) is meeting its responsibilities in screening and enrolling suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), says the recently released September GAO report.

Medicare's 21 national standards that must be met before suppliers can bill the government are currently too weak to be used effectively to screen medical equipment suppliers, the report says. Furthermore, the NSC, which was hired by the CMS to verify suppliers met the 21 standards, relies too heavily on self-reported information from suppliers rather than on-site inspections and fails to effectively check state licensure of suppliers, according to the GAO.

The study was requested by Senate Finance Committee Chairman Chuck Grassley (R-Iowa), and stems from revelations that the CMS improperly paid $900 million for DMEPOS in fiscal 2004. In a recent letter to HHS Secretary Michael Leavitt and CMS Administrator Mark McClellan, Grassley said the CMS jeopardized quality of care by permitting fraudulent suppliers to provide services to beneficiaries.

The GAO report suggests some remedies, including that Congress consider whether suppliers found to be noncompliant should wait a specified period of time before having their billing numbers reissued. The GAO report, "Medicare: More Effective Screening and Stronger Enrollment Standards Needed for Medical Equipment Suppliers" is online at http://www.gao.gov/new.items/d05656.pdf (http://www.gao.gov/new.items/d05656.pdf).