OIG: Medicare overpaid for CGMs

WASHINGTON – Medicare payments for continuous glucose monitors (CGMs) and supplies exceeded supplier acquisition costs by $377 million (or 69%) and their total estimated costs by $70 million (or 8%) in one year, according to a new report from the Office of Inspector General (OIG). 

Medicare Part B payments for CGMs and supplies rose from $109 million in 2018 to $1.3 billion in 2023. Of note, CMS expanded CGM coverage to beneficiaries with Type 2 diabetes in 2023 

The OIG compared Medicare payments for CGMs and associated supplies to the costs incurred by suppliers and to retail prices to assess the potential for Medicare cost savings. Previous OIG work determined that Medicare was paying more than other payers for other types of durable medical equipment (DME), inflating Medicare’s overall expenses and the enrollee copayments. 

The OIG found that: 

• CGM supplies represent the largest potential number of dollars saved. Medicare payments exceeded supplier acquisition costs by $359 million and their total estimated costs by $61 million. Medicare payments for CGM supplies also exceeded retail market prices by $290 million in one year. 
• Suppliers received $7 million in potential overpayments based on improper coding of CGMs and supplies. Suppliers billed Medicare for CGMs and supplies that have higher payment rates but provided CGMs and supplies that should have had lower payment rates. 

The OIG recommends: 

• CMS should pursue reductions to Medicare’s payment rates for CGMs and supplies. In July 2025—during the course of this review—CMS issued a proposed rule to use the competitive bidding program and CMS’s inherent reasonableness authority for CGMs and supplies. CMS stated in the proposed rule that these actions would reduce Medicare payment rates. 
• CMS should take action to prevent overpayments caused by suppliers improperly using billing codes for CGMs and supplies to achieve potentially millions of dollars of cost savings for Medicare and enrollees.