Policy & oversight
OIG: Medicare Advantage and Drug Plans Paid 72 Million Dollars for Services Tied to Excluded or Convicted Providers Over Three Years
A federal audit posted October 1 found timing gaps and regulatory exemptions in CMS's preclusion list allowed private Medicare plans to keep paying providers who had been barred from the program or criminally convicted.
By the Goodsurance editorial teamOctober 2, 2026
Federal auditors found that Medicare Advantage organizations and prescription drug plans paid a combined 72 million dollars over three years for services connected to providers who had been excluded from federal programs or convicted of certain felonies. The report was issued September 28 and posted October 1, 2026, and covers claims paid during calendar years 2022 through 2024.
The Office of Inspector General identified 249 revoked National Provider Identifiers, out of 1,017 examined, where payments reached enrolled beneficiaries through ineligible providers. Auditors attributed the payments to timing gaps and technical errors in how CMS adds and removes providers from its preclusion list, the federal database used to block ineligible parties from receiving Medicare payments.
OIG found 72 million dollars paid to barred providers through private Medicare plans over three years. Here is how the gap happened.
Among the specific vulnerabilities OIG identified: CMS did not always add organizations to the preclusion list when an owner was excluded or had a disqualifying felony conviction. Separately, pharmacies that only fill prescriptions rather than prescribe drugs are not subject to preclusion rules under current regulations, leaving that channel outside the standard check.
The report recommends that CMS address the timing and process gaps in the preclusion list and consider extending screening to the pharmacy-dispensing sector. CMS maintains the preclusion list as a core safeguard against payments to providers already barred from the program.
In plain words
A federal watchdog found that Medicare Advantage and drug plans paid 72 million dollars over three years to health providers who were not supposed to get Medicare money. These providers had been banned from Medicare or convicted of serious crimes. The payments happened because of delays and errors in how the government's banned-provider list works. Some pharmacies that only fill prescriptions are also not covered by the list at all. The report asks the government to fix these problems.
Understand the basics first
Source: OIG
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