OIG Report Identifies Medicare Overpayments on Continuous Glucose Monitors

A recent Office of the Inspector General (OIG) report highlights substantial Medicare spending on continuous glucose monitors (CGMs) and related supplies, revealing payments that exceeded supplier costs and retail market prices by significant margins. Between 2018 and 2023, Medicare Part B payments for CGMs rose sharply, reaching $1.3 billion in 2023. The OIG’s analysis, covering July 2022 to June 2023, found Medicare payments surpassed suppliers’ acquisition costs by $377 million (69%) and total estimated costs by $70 million (8%). This overpayment signals potential Medicare savings in the tens of millions annually. The OIG’s findings coincide with the release of a CMS final rule introducing changes to Medicare’s competitive bidding program and HME provider accreditation, including a reclassification of CGMs and insulin pumps into a monthly rental payment model. However, industry experts caution that the OIG’s use of 'allowed amounts' rather than actual Medicare outlays inflates perceived expenditures. Medicare pays 80% of these amounts, with beneficiaries or supplemental plans responsible for the remainder, though collection of this patient liability is inconsistent due to coverage limitations and hardship waivers. The OIG conducted its cost analysis by examining national Medicare claims data and surveying suppliers for acquisition costs. These acquisition costs represented approximately 64% of total supplier expenses, with the rest attributed to operational costs such as delivery, rent, and salaries, as estimated by the American Association for Homecare. The CMS final rule’s shift to a monthly rental payment for CGMs aims to streamline reimbursement by bundling supplies and accessories. This aligns with OIG recommendations to leverage competitive bidding to reduce Medicare expenditures. Stakeholders anticipate that these regulatory adjustments could lead to significant cost savings while impacting supplier revenue models. The report underscores ongoing scrutiny of Medicare durable medical equipment spending, highlighting the need for refined payment methodologies to balance cost control and beneficiary access. The integration of competitive bidding and accreditation standards in the final rule reflects CMS’s broader effort to enhance program integrity and sustainability in the evolving HME market.