Payments for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Made on Behalf of Beneficiaries in Skilled Nursing Facility Stays Covered Under Medicare Part A

EXECUTIVE SUMMARY:

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.

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