Medicare payments questioned

WASHINGTON – The government paid more than $1 billion in questionable Medicare claims for medical supplies that showed little relation to a patient’s condition, including blood glucose strips for sexual impotence and special diabetic shoes for leg amputees, congressional investigators say.

Billions more in taxpayer dollars may have been wasted over the last decade because the government-run health program for the elderly and disabled paid out claims with blank or invalid diagnosis codes, such as a “?” or “zzzzz.” Medicare officials say even smiley-face icons could have been accepted.

The report by Republicans on the Senate Homeland Security investigations subcommittee is the latest to detail lax oversight in the $400 billion program that has been cited by government auditors as a high risk for fraud and waste for nearly 20 years.

The panel’s review of millions of claims submitted by sellers of wheelchairs, drugs and other medical supplies on behalf of Medicare patients from 2001 to 2006 found at least $1 billion in which the listed diagnosis code appeared to have little, if any, connection to the reimbursed medical item.

For example, blood glucose test strips are almost exclusively used for diabetics. But Medicare paid millions of dollars to medical suppliers for the test strips without question based on non-diabetic diagnoses ranging from typhoid and bubonic plague to chronic airway obstruction and “psychosexual dysfunction.”

Other questionable claims included wheelchairs or wheelchair accessories for patients listed as having a deformed nose or sprained wrist, special shoes for diabetics or shoe inserts for those with leg amputation or “precocious sexual development,” and walkers for people diagnosed with paraplegia.

“Since when did doctors start prescribing blood glucose test strips for the bubonic plague?” Minnesota Sen. Norm Coleman, the top Republican on the panel, said Tuesday. “CMS’s review process simply doesn’t check to see whether the claim makes sense, and that leaves Medicare vulnerable to fraud, waste and abuse. Bottom line: We need to know where our Medicare dollars are going.”

The Senate report urged the Centers for Medicare and Medicaid Services to consider new procedures to prevent fraud by reviewing whether diagnosis codes are medically related to the supplies being reimbursed, and to reject claims with any invalid or incorrect codes. Currently CMS generally just checks to see if the coding is listed in the proper format before making payment.

CMS said it had taken steps in recent years to identify potential fraud and abuse, such as creating warning flags in the processing system for high-risk items such as glucose strips.

CMS also argued it should not be faulted for failing to review Medicare claims prior to 2003 that had questionable or invalid diagnosis codes. The agency contended that federal regulations were ambiguous until 2003 as to whether the codes were actually required to process a claim.

Investigators, however, noted CMS has pledged for many years to fix problems with little success.