Policy & oversight
OIG White Paper Finds Medicare Equipment Fraud Persists and Urges Expanded Screening for Private Plan Suppliers
A new federal watchdog white paper warns that existing safeguards have not stopped evolving durable medical equipment fraud in Medicare, and recommends that CMS extend enrollment screening to all DMEPOS suppliers billing Medicare Advantage plans.
By the Goodsurance editorial teamAugust 22, 2026
The Office of Inspector General completed a white paper on August 17, 2026, finding that fraud, waste, and abuse in Medicare's durable medical equipment, prosthetics, orthotics, and supplies program remain persistent despite years of federal safeguards. Medicare pays more than 7 billion dollars annually for these items, known collectively as DMEPOS, in Original Medicare alone.
The paper identifies the three elements bad actors need: a Medicare-enrolled supplier, a physician order, and a beneficiary identification number. Fraudsters gain entry by opening new supplier businesses or acquiring existing ones, frequently concealing true ownership through stand-in owners.
OIG: Medicare equipment fraud keeps evolving, and suppliers billing private Medicare plans still face fewer screening hurdles than Original Medicare sellers.
The OIG found that existing protections, including mandatory site inspections, surety bonds, and background checks, have not fully contained evolving fraud schemes. The watchdog recommended that CMS analyze DMEPOS supplier billing patterns more systematically to spot emerging schemes, review whether payments for off-the-shelf orthotic braces are priced appropriately relative to other payers, and act more promptly when fraud is suspected.
The OIG's most significant recommendation is that CMS require all DMEPOS suppliers billing Medicare Advantage plans to complete the same Medicare enrollment screening already required of Original Medicare suppliers. Because Medicare Advantage now covers a majority of all Medicare beneficiaries, the current oversight gap could give fraudsters a pathway that traditional program controls do not reach.
In plain words
The government watchdog published a report about fraud in Medicare equipment like wheelchairs and back braces. Fraudsters set up fake companies, use a doctor's order, and bill Medicare. The watchdog said Medicare should check equipment sellers that work with private Medicare plans as carefully as it checks sellers in regular Medicare. Right now, those private-plan sellers do not face the same checks.
Understand the basics first
Source: HHS OIG
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