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Medicare Compliance & Reimbursement

Long-Term Care:

DOJ Launches Wide Medical-Supply Probe

Published on Fri Oct 01, 2004

The Department of Justice is looking into how medical-supply companies market to nursing homes and other health care institutions that serve Medicare and Medicaid patients.

More than a dozen medical-supply companies recently received federal subpoenas, apparently to determine whether facilities are overcharging federal and state health programs for goods, the New York Times reports. The investigation appears to be centered on Novation, a Texas-based company that negotiates the contracts that thousands of nursing homes, clinics and hospitals use to buy drugs and other supplies.

The central issue seems to be whether the industry's use of rebates, discounts, barter and refunds means Medicare and Medicaid pay more than facilities actually spend, says to the paper.
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