GAO report slams NSC inspectors

Monday, May 31, 2004

WASHINGTON - Weaknesses in Medicare’s 21 supplier standards and failures by NSC inspectors opened the door to a deluge of fraudulent operators in Houston’s Wheeler Dealer scandal, according to GAO testimony before the U.S. Senate

The GAO identified three weaknesses in the current enrollment process:

- Because NSC inspectors failed to verify documents necessary for a supplier number, wheeler dealers were able to get supplier numbers on falsified documents.

- Inexplicit standards made it difficult for inspectors to determine the legitimacy of suppliers. For example, the inventory supplier standard, which requires companies to keep their own stock or have contractual relations with another company that does, is spelled out in such broad language that inspectors have trouble enforcing it.

- Site visits are way too predictable and allow fraudlent suppliers to assume the guise of legitimacy long enough to pass inspection.

Since the NSC stationed one of its employees in Harris County, Texas in late 2002, the CMS contractor has pulled 367 billing numbers in the wake of 1,300 inspections.