OIG report catches $34m in CMS overpayments to med device suppliers over 3 years

The U.S. Dept. of Health and Human Services’ Office of the Inspector General recently published a report claiming that the Centers for Medicare and Medicaid Services overpaid medical device suppliers by $34 million.

The money went to suppliers of prosthetics, orthotics and other durable medical equipment between 2015 and 2017, according to the report. The overpayments were through Medicare Part B payments to cover 120,614 claims for items provided to beneficiaries during inpatient stays.

In addition, the OIG reported that beneficiaries overpaid $8.7 million to the suppliers for deductibles and coinsurance for the inpatient items.

“Generally, Medicare should not pay a supplier for these times provided to a beneficiary during an inpatient stay. Instead, all items must be provided directly by the inpatient facility or under arrangements between the facility and the supplier. Medicare should pay the inpatient facility, through its inpatient claim, for all times provided to the beneficiary,” the OIG wrote in its report.

The overpayments to suppliers were the result of inadequate system edits that should have prevented or detected the overcharges, the OIG said.

“If the system edits had been designed properly since 2008, Medicare could have saved $223.1 million, and beneficiaries could have saved $56.3 million in deductibles and coinsurance that may have been incorrectly collected from them or from someone on their behalf,” the OIG wrote in the report.

The federal watchdog recommended that CMS seek to recover the $34 million in improper payments and refund the $8.7 million to beneficiaries. The OIG went on to suggest that CMS also implemented appropriate system edits to “fully prevent or detect overpayments to suppliers” for related medical products.

The OIG said that CMS “concurred with all but one of our recommendations,” and that the agency is considering requesting legislative authority to “require suppliers to refund to beneficiaries incorrectly collected deductibles and coinsurance,” according to the report.

Last month, the U.S. Health & Human Services Dept.’s inspector general flagged the FDA for its “deficient” plans and processes to ensure medical device cybersecurity, saying the federal safety watchdog’s policies and procedures are “insufficient for handling post-market medical device cybersecurity events.”

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