Medicare is making questionable payments for diabetes test strips used by residents of skilled nursing facilities, according to a report from the Department of Health and Human Services Office of Inspector General.

SNF residents with diabetes are supposed to get glucose-level test strips from the facility, not from an outside supplier that would bill Medicare. However, in 2011, Medicare paid out about $113,000 for test strips for beneficiaries who were in SNFs at the time, according to the OIG report.

Hospital inpatient stays inappropriately overlapped with DTS claims even more frequently, accounting for $3.5 million in questionable payments, the report states.

OIG recommended that the Centers for Medicare & Medicaid Services strengthen beneficiary and supplier education around DTS billing, increase oversight of suppliers, and beef up claims-processing edits.