November 9, 2015


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Dr. Rand Paul Exposes Medicare Overpaying an Estimated $175 Million on Sleep Apnea Studies in Latest ‘The Waste Report’

WASHINGTON, D.C. – U.S. Senator Rand Paul today released the latest edition to ‘The Waste Report,’ which is an ongoing project cataloguing egregious examples of waste within the U.S. government.

The latest edition exposes Medicare overpaying as much as $175 million annually on sleep studies seeking to determine if the individual suffers from sleep apnea – a condition that causes an individual to momentarily stop breathing during sleep. At the root of the problem, Medicare is paying bills for services that are missing proper documentation, such as a doctor’s referral. Furthermore, the estimated $175 million could be used to actually treat patients suffering from sleep apnea or other conditions, if corrected.

‘The Waste Report’ can be found HERE or below.

You have probably heard of sleep apnea, the condition where a person momentarily stops breathing during sleep. In fact, Medicare alone spends almost $300 million a year on sleep studies determining if patients have this condition. Unfortunately, it seems Medicare has a problem with overpaying for these important studies, which costs taxpayers as much as $175 million a year. 


In a recent report, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) noted that one provider of sleep studies recently agreed to repay $15.3 million resulting from false claims.  


The OIG report delved into another sleep study provider from Orlando that was estimated to have been overpaid more than $1 million, or almost 60 percent of all payments they received. Specifically, the OIG found, that in a sample of 100 patients, 74 percent of items billed were not allowable under Medicare guidelines. In addition, nearly one-third of those payments were made without supporting documentation, such as a doctor’s referral. And, in one instance, Medicare paid for a procedure that was not even done. 


Shockingly, roughly 60 percent of payments made to this particular provider were over 3-years old. Which means Medicare paid the bill for services without the required documentation and never followed up again. This never would have been noticed if it were not for the Inspector General. If this is the trend, then the government could be improperly paying as much as $175 million a year just on sleep studies.


It is no wonder that the Government Accountability Office (GAO) estimated earlier this year that Medicare makes over $45 billion, or roughly 12.7 percent of its outlays, in improper payments annually. Further GAO lists a root cause of Medicare improper payments as “[i]nsufficient documentation for home health claims…”


For those keeping score, earlier this year, the Waste Report reported how Coast Guard members were able to use a medical travel program to take vacations. What made this waste possible? Travel approvals made without required documentation, including missing doctor referrals. See a trend?





Pilcher, Lori S., TOTAL SLEEP MANAGEMENT, INC., BILLED MEDICARE FOR UNALLOWABLE SLEEP STUDY SERVICES, Office of the Inspector General, Department of Health and Human Services; Washington, D.C.; October 2015

Ibid, pp 6

Ibid, pp 5

Bertoni, Daniel; Davis, Beryl H.; IMPROPER PAYMENTS: Government-Wide Estimates and Use of Death Data to Help Prevent Payments to Deceased Individuals; Testimony Before the Before the Committee on Homeland Security and Governmental Affairs, U.S. Senate; Government Accountability Office; Washington, D.C.; March 2015