Medicare Contractors Failed to Identify 76% of Improper Claims for Diabetic Medical Supplies

Medicare Part B covers the cost for home diabetic medical supplies, including blood-glucose test strips and lancet supplies. Typically, Medicare will only pay for 100 test strips per month. To cover additional strips, there must be documentation in the beneficiary’s medical records supporting the specific reason for the additional supplies and documentation in the physician’s or supplier’s records supporting the actual frequency of testing.

CMS contracts with four durable medical equipment (DME) Medicare administrative contractors to pay Medicare Part B DME claims. These contractors act as a safeguard to the Medicare Trust Fund to avoid Medicare fraud, by verifying that only eligible claims receive payment. However, according to various GAO reports, contractors have been unable to adequately monitor DME claims, costing the Medicare program billions of dollars.

In the latest report, the GAO determined that in 2007, DME Medicare administrative contractors allowed over $200 million in improper Medicare Part B claims for home blood-glucose test strips and lancets. Alarmingly, over 76% of the high utilization claims should not have been paid, for the claims lacked necessary documentation. Upon closer inspection, the GAO determined that the contractors neither had controls to ensure that claims for test strips and/or lancets complied with Medicare documentation requirements nor system edits to identify high utilization claims and claims with overlapping service dates for the same beneficiary.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.