Medicare Advantage enrollees who need a wheelchair, a glucose monitor or a hospital bed rarely think about who vetted the company that ships it. A new federal review says that gap in attention carries a real cost: the durable medical equipment suppliers facing the least screening are the same ones billing Medicare Advantage plans from outside their provider networks. The finding arrives as Medicare Advantage has grown into the larger share of Medicare spending, widening the target for fraud schemes that once concentrated on Original Medicare.
HHS Inspector General Flags a Screening Gap in Medicare Advantage
The U.S. Department of Health and Human Services Office of Inspector General published the finding on September 14, 2026, in an issue brief titled Medicare Advantage Organizations and CMS Can Do More To Prevent Durable Medical Equipment Fraud in Medicare Advantage, report number OEI-02-24-00310. Reviewing how Medicare Advantage organizations and the Centers for Medicare & Medicaid Services screen suppliers of durable medical equipment, prosthetics, orthotics and supplies, the inspectors wrote plainly that suppliers “with the least screening—those that bill out of network and are not enrolled in Medicare—pose an increased fraud risk to the program.” That sentence identifies exactly which sellers concern the watchdog most: not every supplier serving a Medicare Advantage plan, but specifically the ones operating outside a plan’s contracted network while also sitting outside Medicare’s own enrollment system. The report also frames the scale of what is already at stake, citing one recent case in which the people involved are accused — not yet proven in court, and still working through the legal system — of fraudulently billing Medicare for over $10 billion in durable medical equipment claims. OIG catalogs the review under its financial-stewardship and managed-care issue areas, and lists elderly beneficiaries as the report’s specific target group, an explicit signal that older enrollees carry the practical weight of the gap examiners found.
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Why Health Plans Miss Out-of-Network Suppliers
Medicare Advantage organizations do check the durable medical equipment suppliers inside their contracted networks, according to the inspector general’s full report, but they run fewer checks on suppliers billing from outside those networks. An in-network supplier typically has already cleared a health plan’s own credentialing steps before it can submit a claim. An out-of-network supplier faces no equivalent gate from the plan itself, leaving its federal enrollment status as close to the only screen it may pass through at all. That asymmetry, the report found, is what lets suppliers with the thinnest track record reach a beneficiary population that the inspector general’s office says now accounts for more Medicare spending than Original Medicare.
CMS’s Preclusion List Has Its Limits
The Centers for Medicare & Medicaid Services carries its own share of the gap, according to the report’s highlights. CMS does not screen every DMEPOS supplier before it bills Medicare Advantage, because not every supplier is required to enroll in Medicare in the first place. The agency’s main tool for blocking known bad actors, a roster known as the Preclusion List, has limitations in preventing fraud, the inspector general found. To close the gap, OIG recommended that CMS ensure Medicare Advantage organizations strengthen checks of out-of-network suppliers, strengthen use of the Preclusion List, and require that all DMEPOS suppliers billing Medicare Advantage enroll in Medicare — or seek the statutory authority to require it. CMS concurred with, or agreed to consider, each recommendation.
The Weight Behind a $10 Billion Accusation
The $10 billion figure the inspector general cites is not a Medicare Advantage number specifically, and it is not a court judgment. It describes a single ongoing case in which defendants stand accused of fraudulently billing Medicare for durable medical equipment claims at that scale, an allegation still moving through the legal system rather than a settled loss. OIG points to the case mainly to explain why it is turning new attention toward Medicare Advantage, noting that it has “seen fraud schemes—similar to those affecting Original Medicare—also impacting Medicare Advantage.” That mismatch between one large accusation and a narrower, scoped Medicare Advantage finding reflects how the office works: it pairs audits and evaluations like this issue brief with separate investigations and enforcement actions, using both to press CMS toward tighter screening rather than waiting on a single case’s outcome. The size of the accusation is backdrop; the verified finding is that the screening gap OIG documented in Medicare Advantage is real, even without a Medicare Advantage dollar figure attached to it yet.
What a Stolen Medicare Number Can Buy
The household risk behind the inspector general’s warning is concrete: durable medical equipment fraud most often means a bill for something the beneficiary never received. In its overview of common DME fraud schemes, OIG describes suppliers billing Medicare or Medicaid for equipment beneficiaries never receive, and notes that “in some cases, suppliers use stolen beneficiary identification numbers to submit these claims.” That same overview lists providing medically unnecessary equipment, upcoding to a pricier item than what was supplied, and falsifying medical-necessity paperwork as the other schemes most associated with the sector, and it singles out urinary catheters — among the most commonly billed DME items — as a persistent target for telemarketers pushing equipment beneficiaries never asked for. A Medicare Advantage member has little way to catch that kind of billing except by reading plan paperwork line by line. OIG’s guidance points beneficiaries toward their Medicare Summary Notice or Explanation of Benefits for charges that do not match anything actually ordered or delivered, with unfamiliar charges reportable through the inspector general’s fraud hotline. For a program that now carries more spending than Original Medicare, that quiet mismatch between a billed claim and a beneficiary’s own mailbox is exactly the fraud risk the least-screened suppliers create.
A Medicare Number in the Wrong Hands
The inspector general’s report explains why some durable medical equipment suppliers pass through with less scrutiny than others, but it stops short of telling a Medicare Advantage member what to do once a bill shows up for equipment never ordered, or once a caller already seems to have a Medicare number in hand. Once a stolen Medicare number is in circulation, the calls and claims that follow often move faster than a household can look up the right agency to contact.
The Senior Fraud Defense & First-Hour Recovery Kit is a 9-page kit built around the first-hour recovery plan, the family code word and a fraud evidence and report log.
See the first-hour steps and the family code word in The Senior Fraud Defense & First-Hour Recovery Kit.
AI-assisted research and drafting; reviewed by an editor.
