Key OIG Updates in August 2025

Durable Medical Equipment

For decades compliance professionals have been reading Department of Justice press releases related to fraud, waste, and abuse involving durable medical equipment (DME). DME includes prosthetics, orthotics, and supplies (also known as DMEPOS). According to the OIG, each year, Medicare payments for DMEPOS top more than $7 billion in original Medicare alone. Despite safeguards and other CMS efforts, recent cases demonstrate that fraudsters continue to target DMEPOS billing and have developed new schemes.  

The OIG Work Plan item describes their intent to write a white paper called “Fraud, Waste, and Abuse Related to Durable Medical Equipment in Medicare.” They say this white paper will build on OIG's extensive expertise on DMEPOS fraud. It will provide information about the nature of DMEPOS fraud in Medicare, key program integrity vulnerabilities, and potential actions to reduce fraud, waste, and abuse. 

A couple of the recent DME fraud announcements include the following: 

• Doctor charged in telemedicine DME fraud https://www.justice.gov/usao-ma/pr/alabama-doctor-charged-6-million-telemedicine-health-care-fraud-scheme 
• DME owner sentenced to 12 years for $61 million Medicare fraud scheme https://www.justice.gov/opa/pr/durable-medical-equipment-owner-sentenced-12-years-61-million-medicare-fraud-scheme  

More Medicare Advantage and Diagnosis Coding Audits

OIG has performed many audits and reports related to managed care compliance such as Medicare Advantage over the years. Such auditing and monitoring work has become so prolific that OIG has a web page dedicated just to this area of healthcare compliance https://oig.hhs.gov/reports/featured/managed-care/  

Both OIG and the current presidential administration have emphasized their intent to continue their focus on Medicare Advantage audits and enforcement activity. 

In this particular OIG Work Plan item, the OIG plans to audit diagnosis codes that Medicare Advantage organizations submitted to CMS for use in Medicare Part C risk-adjustment program. Payments to Medicare Advantage organizations (MAOs) are risk-adjusted based on the health status of each enrollee. MAOs are required to submit risk-adjustment data to CMS according to CMS instructions. Inaccurate diagnoses may cause CMS to pay improper amounts to MAOs. For this audit, the OIG will focus on diagnoses that are at high risk for not being supported by medical records for a face-to-face encounter with an acceptable provider type and resulted in increased risk-adjusted payments from CMS to MAOs. They will determine whether MAOs' submission of these diagnosis codes to CMS, for use in CMS's risk-adjustment program, complies with Federal requirements. 

In past audits, the OIG has identified the following diagnosis codes as high-risk diagnosis codes: 

• Incorrectly Submitted Diagnosis Codes for Acute Stroke 
• Incorrectly Submitted Diagnosis Codes for Acute Myocardial Infarction  
• Incorrectly Submitted Diagnosis Codes for Embolism 
• Incorrectly Submitted Diagnosis Codes for Sepsis 
• Incorrectly Submitted Diagnosis Codes for Pressure Ulcer 
• Incorrectly Submitted Diagnosis Codes for Lung Cancer 
• Incorrectly Submitted Diagnosis Codes for Breast Cancer  
• Incorrectly Submitted Diagnosis Codes for Colon Cancer  
• Incorrectly Submitted Diagnosis Codes for Prostate Cancer 
• Incorrectly Submitted Diagnosis Codes for Ovarian Cancer 

For example, past audits identified the medical records indicated the individual previously had colon cancer, but the records did not support a colon cancer diagnosis at the time of the physician’s service. 

Another example relates to reporting diagnosis codes for acute stroke. In a previous audit, the OIG found that medical records provided to support the reviewed HCC for acute stroke were radiology reports signed and credentialed by radiologists. For risk adjustment purposes, CMS uses only diagnoses that enrollees receive from acceptable data sources, which include face-to-face encounters with a provider, physician, or other practitioner. Because the records did not meet CMS’s requirements for acceptable data sources, the HCC for stroke was not validated. 

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