GAO Notes Improper Medicare Payments for DMEPOS

Medicare paid contractors approximately $700 million in improper payments for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) between April 2005 and April 2006, the Government Accountability Office (GAO) said in a recent report. This figure represented roughly 7.5 percent of Medicare's payments for DMEPOS during that time, the report added.

The GAO's analysis of contractors' payment integrity activities found they are insufficient in preventing improper payments.

To help prevent improper payments for DMEPOS, the GAO recommends that the Centers for Medicare & Medicaid Services (CMS) take two actions: require program safeguard contractors (PSCs) to create thresholds for unexplained billing increases and use them to develop automated prepayment controls; and require contractors to share information on their automated prepayment controls and consider adopting the successful strategies being used by the others.

The report reviewed PSCs' payment integrity activities, which include automated prepayment controls -- also referred to as edits -- that are used by contractors to deny claims or flag them for medical review. The report called these controls the contractors' "first line of defense" for avoiding payment of improper claims. It also evaluated contractors' benefit integrity activities because they allow contractors to enlist federal law enforcement agencies to act against suppliers who defraud Medicare.

The report, "Improvements Needed to Address Improper Payments for Medical Equipment and Supplies," can be viewed at www.gao.gov/new.items/d0759.pdf ( http://www.gao.gov/new.items/d0759.pdf ).

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