OIG Posts Energy and Commerce DME Testimony

Inspector General Daniel R. Levinson testified Sept. 22 before the House Committee on Energy and Commerce’s  Subcommittee on Health about cutting waste, fraud, and abuse in Medicare and Medicaid. Improper payments and misaligned pay rates, particularly for durable medical equipment (DME), persist, Levinson told the subcommittee.

Here is a small excerpt from that testimony:

“Waste of funds and abuse of the health care programs also cost taxpayers billions of dollars. In fiscal year (FY) 2009, the Centers for Medicare & Medicaid Services (CMS) estimated that overall, 7.8 percent of the Medicare fee-for-service claims it paid ($24.1 billion) did not meet program requirements. Although these improper payments do not necessarily involve fraud, the claims should not have been paid. For our part, [Office of Inspector General] OIG reviews claims for specific services, based on our assessments of risk, to identify improper payments. For example, an OIG audit uncovered $275.3 million in improper Medicaid payments (Federal share) from 2004 to 2006 for personal care services in New York City. As another example, an OIG evaluation of payments for facet joint injections (a pain management treatment) found that 63 percent of these services allowed by Medicare in 2006 did not meet program requirements, resulting in $96 million in improper payments.”

“OIG’s work has also demonstrated that Medicare and Medicaid pay too much for certain services and products and that aligning payments with market costs could produce substantial savings. For example, in 2007, OIG reported that Medicare reimbursed suppliers for pumps used to treat pressure ulcers and wounds based on a purchase price of more than $17,000, but that suppliers paid, on average, approximately $3,600 for new models of these pumps. Similarly, we found that in 2007, Medicare allowed, on average, about $4,000 for standard power wheelchairs that cost suppliers, on average, about $1,000 to acquire. These pricing disparities also affect beneficiaries, who are responsible for 20 percent copayments on items and services covered under Medicare Part B.”

Full testimony

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