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OIG Issues Report: Program Integrity Problems with Newly Enrolled Medicare Equipment Suppliers

Due to the “significant program integrity problems” presented to the Medicare program by durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) suppliers, the Office of Inspector General (“OIG”) issued a report, Program Integrity Problems with Newly Enrolled Medicare Equipment Suppliers (“Report”). In its Report, the OIG aimed describes the aim of its investigation was two-fold:

  1. Determining the extent to which newly enrolled DMEPOS suppliers had their billing privileges revoked or were placed on prepayment claims review; and
  2. Determining the extent to which newly enrolled suppliers omitted from their Medicare applications required information regarding (a) owners or managers or (b) the criminal histories of owners or managers or any adverse legal actions taken against these individuals.

By way of brief background, to participate in Medicare, each DMEPOS supplier must complete a Medicare enrollment application and demonstrate that it meets the standards of participation (42 CFR 424.57 and 42 CFR pt. 424, subpart P). For a complete explanation of the Medicare enrollment process, including how it applies to DMEPOS suppliers, please click here.

In its Report, the OIG revealed the following:

  • During their first year in Medicare, 26% of high- and medium-risk suppliers and 2% of low/limited-risk suppliers had their billing privileges revoked or were placed on prepayment claims review;
  • 13% of high and medium-risk suppliers and 4% of low/limited-risk suppliers omitted ownership or management information from their Medicare enrollment applications; and
  • 4% of high- and medium-risk suppliers omitted information regarding criminal histories or adverse legal actions from their applications.

As such, the OIG issued the following recommendations to CMS:

  • Conduct post-enrollment site visits earlier for new DMEPOS suppliers receiving the most money from Medicare;
  • Apply investigative techniques and tools to identify any owners or managers of DMEPOS suppliers who are not reported on supplier applications as required; and
  • Take appropriate action regarding DMEPOS suppliers that omit information from applications.


CMS agreed with the OIG’s recommendations and is “address[ing] potential vulnerabilities.” DMEPOS suppliers should remain attentive to, and be mindful of, the increasing scrutiny over DMEPOS enrollment and DMEPOS suppliers’ post-enrollment activities.

For more information regarding DMEPOS suppliers, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or contact Daniel B. Brown, Esq. at 770-804-4700 or visit the HLP website.

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