Department of Health and Human Services

Office of Inspector General -- AUDIT

"Payments for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Made on Behalf of Beneficiaries in Skilled Nursing Facility Stays Covered Under Medicare Part A," (A-01-05-00511)

June 26, 2007

Following link is a pdf fileComplete Text of Report is available in PDF format (707 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


For calendar years (CY) 1999–2002, before Common Working File edits were fully operational, Medicare Part B made $100.8 million in potential overpayments to suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) on behalf of beneficiaries in Part A-covered skilled nursing facility stays.  For CY 2003, after the edits were fully operational, OIG’s computer match identified potential DMEPOS overpayments valued at $15.4 million.  A statistical sample showed that the durable medical equipment regional carriers (DMERC) had not recovered approximately 69 percent of these overpayments.  As a result, OIG estimated that the DMERCs had not recovered $11.2 million of the $15.4 million in potential CY 2003 overpayments. 

OIG recommended that CMS (1) direct the DMERCs to review the $100.8 million in potential overpayments for CYs 1999–2002 and make appropriate recoveries, (2) direct the DMERCs to initiate recovery of the estimated $11.2 million in CY 2003 overpayments, and (3) ensure that all DMERCs have established proper controls to recover overpayments that the Common Working File edits identify.  CMS concurred with the recommendations.