**GAO-08-955**                      Published: Jul 03, 2008. Publicly Released: Aug 04, 2008.                  

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## Highlights

According to the Department of Health and Human Services (HHS), schemes to defraud the Medicare program have grown more elaborate in recent years. In particular, HHS has acknowledged Centers for Medicare & Medicaid Service's (CMS) oversight of suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is inadequate to prevent fraud and abuse. Specifically, weaknesses in the DMEPOS enrollment and inspection process have allowed sham companies to fraudulently bill Medicare for unnecessary or nonexistent supplies. From April 2006 through March 2007, CMS estimated that Medicare improperly paid $1 billion for DMEPOS supplies--in part due to fraud by suppliers. Due to the committee's concern about vulnerabilities in the enrollment process, GAO used publicly available guidance to attempt to create DMEPOS suppliers, obtain Medicare billing numbers, and complete electronic test billing. GAO also reported on closed cases provided by the HHS Inspector General (IG) to illustrate the techniques used by criminals to fraudulently bill Medicare. On June 18, 2008, we briefed CMS representatives on the results of our investigation. In response, they acknowledged that our covert tests illustrate gaps in oversight that still require improvement and stated that they would continue to work to strengthen the entire DMEPOS enrollment process.

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## Topics

Health Care

AccountabilityCost analysisDocumentationFraudHealth care cost controlHealth care costsHealth care fraudHealth care programsHealth care servicesInvestigations into federal agenciesMedical equipmentMedical suppliesMedical technologyMedicareProgram evaluationProgram managementRisk assessmentRisk managementStrategic planningCorrective actionWaste, fraud, and abuse