The Medicare Advantage DMEPOS Gap Every Prescribing Physician Should Know About

By Elena Pak, Credentialing Department, WCH

Quick question: when you write a durable medical equipment order for a Medicare Advantage patient — a wheelchair, a CPAP machine, an orthotic brace — do you know whether the supplier filling that order is actually enrolled in Medicare?

You might assume the answer doesn’t matter, because CMS checks suppliers somewhere in the pipeline. A federal watchdog report published this month suggests that assumption doesn’t hold for a meaningful slice of Medicare Advantage suppliers.

The Gap, in Plain Terms

Original Medicare requires every durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) supplier to be enrolled in the program before it can bill. Medicare Advantage doesn’t work that way. Current law actually prohibits MA organizations from requiring DMEPOS suppliers to be enrolled in Medicare in order to service MA members. That means some suppliers can bill Medicare Advantage plans without going through Medicare’s standard DMEPOS enrollment and screening process. The report points to a structural gap in the current statutory framework.

The HHS Office of Inspector General looked at six Medicare Advantage organizations for its September 15 report and found they collectively manage 21,029 DMEPOS suppliers — nearly 8,000 of them out of network. Those out-of-network suppliers, the report found, are subject to less scrutiny than in-network ones. MA organizations can be particularly lax about verifying whether an out-of-network supplier is even accredited or meets basic state licensure requirements.

The report also identifies gaps in how CMS uses its preclusion list — a tool that flags suppliers who’ve had their Medicare enrollment revoked and are barred from re-enrolling. According to OIG, CMS mostly uses that list reactively, to shut a supplier down after a problem has already surfaced, rather than screening suppliers against it before they start billing.

The Number That Should Make You Pause

Here’s the stat worth remembering, because it reframes how you might think about a routine order: the average monthly billed amount for orthotics supplies was $210 among suppliers properly enrolled in Medicare. Among out-of-network suppliers billing for the exact same category of supplies, it was $1,399 — roughly seven times higher. Two of the six MA organizations interviewed for the report told investigators that out-of-network suppliers accounted for nearly all of the fraud schemes they’d encountered.

That’s more than a rounding error in a spreadsheet. It means a physician’s order can end up tied to a supplier that received substantially less scrutiny than its in-network counterparts.

Why This Matters Beyond the Billing Department

It’s tempting to file this under “insurance company problem, not mine.” Three reasons that matters:

Your order is part of the chain. Physician orders are often a key part of fraudulent DME billing schemes. When OIG or CMS investigates a billing pattern, the referring provider’s documentation may be part of what gets reviewed — meaning a physician whose orders repeatedly route to a supplier later flagged for fraud can end up fielding audit requests even when they did nothing wrong.

Unusual billing can eventually land on your care team’s desk. An out-of-network supplier billing seven times the in-network rate doesn’t necessarily mean the patient sees that number directly. But unusual billing can create coverage questions, payment disputes or additional administrative work for the practice — all of which can eventually reach the patient’s care team, and often the referring physician’s office.

This is part of a broader enforcement push. This report doesn’t exist in isolation. It follows a CMS moratorium earlier this year on new DMEPOS Medicare enrollment, explicitly framed around stopping what officials called “longstanding instances of fraud, waste, and abuse” — the agency says it stopped more than $1.5 billion in suspected fraudulent DME billing in 2025 alone. OIG has been flagging DMEPOS billing problems since at least 2018. For physicians, that makes supplier screening increasingly relevant even when the immediate requirement doesn’t come from Medicare.

What You Can Actually Do About It

This is the part that turns a policy story into something you can use this week.

Ask whether the supplier is Medicare-enrolled — even for your MA patients. It’s not currently required for out-of-network DMEPOS suppliers servicing MA members, but nothing stops you from making it your own default. Medicare-enrolled suppliers have gone through the federal DMEPOS enrollment and screening process that may not apply to an out-of-network supplier serving an MA member.

Check accreditation and state licensure before sending repeat referrals to a supplier. The OIG report specifically calls out inconsistent verification of accreditation and licensure among out-of-network suppliers as part of the problem. This is a relatively simple check that many practices don’t currently build into their workflow.

Watch for pricing that doesn’t match the category. You don’t need to audit invoices, but if a patient or a biller flags that a supplier’s charges look unusually high for standard equipment, that’s worth a second look — the OIG’s own data shows out-of-network suppliers billing multiples of the in-network rate for identical supplies.

Document medical necessity thoroughly, regardless of who fills the order. Clean documentation protects you if a downstream supplier ever becomes the subject of an audit, since your clinical rationale stands independent of the supplier’s conduct.

For physician practices, supplier screening is also part of broader compliance and revenue integrity. WCH helps healthcare providers strengthen billing and compliance processes, identify potential reimbursement risks and prepare for payer and regulatory scrutiny before those issues become costly.

The Bigger Picture

What the OIG report really surfaces is a mismatch between how Medicare Advantage was structured and how much money now runs through it. Medicare Advantage now accounts for a much larger share of Medicare spending, but its supplier-screening rules haven’t caught up to match the fraud-prevention infrastructure the traditional program has had for years. OIG’s core recommendation — requiring DMEPOS suppliers to enroll in Medicare in order to bill MA at all — would close that gap directly, and CMS has said it concurs with or will consider all of the report’s recommendations. Whether that turns into an actual rule change, and on what timeline, is still an open question.

Until it does, the screening gap sits exactly where it’s always sat: on the desk of whoever writes the order.

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