Medicare paid $1.2 billion for glucose-monitoring test strips and lancets for diabetic patients in 2007, and a review of those claims by HHS auditors has concluded at least $209 million of that could have been denied payment because of flaws in the paperwork.
About 40% of the costs for diabetics' testing equipment went to “high-utilization” users who are supposed to have more detailed paperwork on file in order to justify their above-average use of the supplies. However, the HHS inspector general's office reviewed the high-use claims for 2007 and found 76% did not meet all of the requirements, the audit says (PDF).
The office reviewed 400 actual claims for payment, which were processed by the four government contractors that handle Medicare Part B claims for durable medical equipment. Auditors found 303 of the claims had flaws, resulting in $22,385 in payments that could have been denied. Extrapolating that figure, the report arrived at the estimate of $209 million for payments that could have been denied.