Federal auditors recently issued a report charging a Kansas-based medical manufacturer with potentially paying out more than $4 million in fraudulent Medicare claims for “male vacuum erection systems,” more commonly known as “penis pumps.” In turn, the auditors requested that the company reimburse all the money to the federal government and “implement policies and procedures to help ensure that it collects and maintains the required documentation.”
The Health and Human Services (HHS) Inspector General said the agency sampled 100 claims submitted by Pos-T-Vac Medical, a manufacturer offering treatment products for Erectile Dysfunction (ED), and found that 51 claims failed to comply with the program’s documentation requirements. All in all, the HHS estimated that unsupported paid claims for the company resulted in overpayments equaling as much as $4.2 million from the period of January 2008 through December 2009. Specifically, the report stated:
For 50 claims, Pos-T-Vac did not maintain proof of delivery in its files; for 2 claims, Pos-T-Vac did not maintain sufficient documentation of the patients' medical condition to substantiate the necessity for the items ordered; and for 1 claim, the physician's written order lacked the signature of the treating physician (2 claims were missing more than 1 piece of required documentation).
Fraudulent dollars attached to this hundred-claim sample amounted to $18,007 in billings, and when compounded across the company’s entire catalog of 28,088 claims, the potential for fraudulent billings spiked to more than $4 million. “Pos-T-Vac submitted unsupported claims because it lacked adequate internal controls to ensure that it collected and maintained the required documentation,” the auditors affirmed in the report, which was released late Thursday.
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Photo: Product illustration from the Pos-T-Vac Medical website