Medicare has made nearly $70 million in overpayments to suppliers of聽consumers’ medical equipment, and more than half of that money is unlikely to be recovered, from the Department of Health and Human Services Inspector General.
Since 2009, Medicare has required suppliers of such durable medical equipment, which includes wheelchairs, walkers and home oxygen equipment and supplies, to obtain at least $50,000 in surety bond coverage per location. But the report also found that as of October 2011, the Centers for Medicare & Medicaid Services had 鈥渋naccurate and incomplete鈥 bond information for many suppliers. As of July 2012,聽just $263,000 out of the $50 million backed by surety bonds has been recovered.
The report also found that many overpayments to durable medical equipment suppliers exceeded $50,000. Because of that limit, much of the $42 million of the overpayments will not be recovered, according to the report.
That doesn鈥檛 sit well with a bipartisan group of senators. 鈥淎t a time when we鈥檙e scouring every nook and cranny of the federal budget for savings, we can鈥檛 afford to let tens of millions of Medicare dollars go to waste without a serious effort to recover it,鈥 Senate Finance Committee Chairman Max Baucus, D-Mont., .
Sen. Orrin Hatch, R-Utah, the panel鈥檚 ranking Republican, said it was 鈥渦nacceptable that lax oversight has allowed tens of millions of taxpayer dollars to fall by the wayside.鈥
The 2010 health care law gives CMS, which oversees the Medicare program, the power to increase the minimum amount covered by surety bonds. 聽The agency has the option of making the bond minimum match the amount of the supplier鈥檚 total billings, so that all overpayments would be eligible for recovery.
Jay Witter, vice president of legislative affairs for the , which represents durable medical equipment manufacturers and providers, said while his group supports efforts to stop Medicare fraud, increasing the size of the surety bonds may not be what鈥檚 needed to prevent fraudulent payments.
鈥淚f it鈥檚 $50,000 or a different number, the program is so mismanaged, it doesn鈥檛 seem like the amount of the bond is really the major problem,鈥 he said, pointing to a finding in the report that CMS lost surety bond data for more than 27,000 durable medical equipment suppliers when it transitioned from one provider data system to another.聽 CMS later recovered the files.
