A word of caution to durable medical equipment ("DME") suppliers planning to enroll in the Medicare program — the government is watching you! According to a new report released in December 2011 by the Office of Inspector General ("OIG"), more than 25 percent of all DME suppliers faced enforcement actions by the Centers for Medicare & Medicaid Services ("CMS") during their first year of participation in the Medicare program.

The Affordable Care Act ("ACA") strengthened the enrollment and screening processes for DME suppliers. These changes took effect in March 2011 for new supplier applicants and will become effective in March 2012 for current Medicare suppliers. In its December 2011 report ("OIG Report" or "Report"), the OIG reviewed a sample of 229 suppliers that enrolled in the Medicare program for the first time during the time period October 1 - December 31, 2008. OIG investigators examined multiple data sources, including Medicare claims data, data from the National Supplier Clearinghouse ("NSC") on revocation of Medicare billing privileges, prepayment claims review data, supplier enrollment applications, and NSC site investigator reports. In order to assess the extent, if any, that the suppliers in the sample had program integrity issues, OIG focused on two types of possible enforcement actions: the placement of a supplier on prepayment claims review, and a complete revocation of a supplier's Medicare billing privileges.