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OIG: Medicare Advantage Plans Leave Equipment Supplier Fraud Screening Largely Unchecked Outside Plan Networks

A new federal watchdog report finds that Medicare Advantage organizations check in-network medical equipment suppliers more thoroughly than out-of-network ones, and that some suppliers billing Medicare Advantage have never been screened by the government at all. CMS concurred with all three OIG recommendations.

By the Goodsurance editorial teamSeptember 15, 2026

A federal watchdog report published this week finds that Medicare Advantage organizations apply fewer fraud-prevention checks to out-of-network durable medical equipment suppliers than to in-network ones, and that some equipment suppliers who bill Medicare Advantage have never been screened by the federal government.

The Office of Inspector General examined how Medicare Advantage organizations, which now cover more than half of all Medicare enrollees, oversee companies that supply items such as wheelchairs, walkers, and oxygen equipment. Auditors found that organizations typically conduct background checks, site visits, and other reviews on suppliers that join their networks. But suppliers who deliver equipment to members outside those networks often face fewer or no checks.

OIG: Medicare Advantage equipment suppliers that bill out of network face far less fraud screening than in-network ones. CMS agrees with all three fixes.

The OIG also found that CMS does not require all durable medical equipment, prosthetics, orthotics, and supplies suppliers to enroll in Medicare as a precondition for billing Medicare Advantage. Suppliers that skip enrollment also bypass CMS's Preclusion List, the tool used to block known bad actors from the program. Suppliers with no enrollment and no network contract represent the population at greatest fraud risk, according to the report.

The OIG issued three recommendations: that Medicare Advantage organizations strengthen screening of out-of-network equipment suppliers; that they make fuller use of the Preclusion List; and that CMS require enrollment in Medicare as a condition of billing Medicare Advantage, or seek the statutory authority to impose that requirement if needed. CMS said it concurred with or would take into consideration all of the recommendations.

CMS's anti-fraud efforts have historically focused on original fee-for-service Medicare rather than Medicare Advantage, even as Advantage enrollment has grown substantially. The OIG noted that extending rigorous screening to the Advantage market is increasingly important given that program's scale.

In plain words

Medicare Advantage plans cover more than half of all Medicare members. A new government report says those plans do not check out-of-network equipment suppliers as carefully as in-network ones. Some equipment companies bill Medicare Advantage without ever being reviewed by the government at all. This means bad actors can get through more easily than in regular Medicare. The government watchdog says plans need to run more checks. It also said CMS should require all equipment suppliers to register with Medicare before billing Medicare Advantage. CMS said it agrees with the suggestions.

Understand the basics first

Source: OIG
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