OIG: Medicare overpaid suppliers during inpatient stays

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Thursday, December 6, 2018

WASHINGTON – Medicare improperly paid suppliers $34 million for DME and supplies that were provided during inpatient stays, according to a new report from the Office of Inspector General.

Those items should have been provided directly by the inpatient facility or under arrangements between the facility and the supplier, according to the report.

In addition, beneficiaries were improperly held responsible for deductibles and coinsurance provided during inpatient stays totaling $8.7 million.

Medicare overpaid the suppliers because systems edits that should have prevented or detected the overpayments were not adequate. If those edits had been adequate, Medicare could have saved $223.1 million since 2008, and beneficiaries could have saved $56.3 million, according to the report.

The OIG recommended that CMS direct contractors to recover the $34 million; that suppliers refund beneficiaries up to $8.7 million; and that the agency identify and recover any improper payments to suppliers after its audit period.

The OIG also recommended CMS take all necessary actions, including legislative authority, to require suppliers to refund beneficiaries and correct the system edits.

CMS concurred with all recommendations with the exception of the recommendation to seek legislative authority, stating it will consider whether to recommend the proposal for inclusion in the president’s next budget.