OIG to release final report uncovering CMS' inaccurate Medicare fraud reduction claims

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The Department of Health and Human Services' Office of Inspector General is expected to file a final report this week criticizing the Centers for Medicare and Medicaid Services for overstating its accomplishments in preventing Medicare fraud in the durable medical equipment (DME) industry.

A draft report from the OIG said that CMS inaccurately reported that it had reduced Medicare fraud in the industry to about $700 million, The New York Times reported last week. The findings were based on improper auditing by AdvanceMed, which was hired to audit the spending. CMS told the company to ignore an auditing program, which is required by law, and only to examine the invoices from DME suppliers, according to the report. In fiscal year 2006, CMS failed to detect that more than one-third of spending on DME was fraudulent, the report found.

Lawmakers have expressed outrage to the report. One congresswoman said that the House Committee on Oversight and Government Reform would hold hearings on the report in the fall.