Health Law Daily Wrap Up, AUDITS AND MONITORING—OIG REPORTS: Payments made to suppliers for PAP devices generally complied with Medicare requirements, (May 1, 2026)

By Donielle Tigay Stutland, J.D.

The OIG estimated, however, that Medicare paid approximately $15.2 million for improper PAP device claims during its audit period that did not meet Medicare billing requirements.

The HHS Office of Inspector General (OIG) released a report on its findings from an audit designed to determine whether claims for positive airway pressure (PAP) devices met Medicare requirements (OIG Report, No. A-05-21-00036 (Apr. 27, 2026)).

Background. The audit examined PAP devices—primarily CPAP (E0601) and BiPAP (E0470)—used to treat obstructive sleep apnea (OSA) during calendar years 2017–2019. It reviewed 387,852 Medicare enrollees with PAP rental claims totaling $111.9 million, focusing on cases without a qualified sleep study in the prior years (to target potential documentation issues with initial, continued, or replacement devices).

Key findings. Generally, CMS ensured that payments made to suppliers for PAP devices complied with Medicare billing requirements. The OIG selected a random sample of 110 Medicare enrollees with payments for PAP devices totaling $32,480 for review. Medicare payments to suppliers complied with Medicare billing requirements for 97 sampled PAP device claims. However, for the remaining 13 sampled PAP device claims, Medicare payments to suppliers did not comply with Medicare billing requirements.

For the 13 sample claims with non-compliance, the OIG reported that 11 claims lacked the required documentation to support coverage, including: proof of a face-to-face evaluation by the treating practitioner (9 cases); a qualified sleep study (for new Medicare enrollees seeking replacement devices) (5 cases); or a standard written order (5 cases). All 11 claims finding errors included replacement devices. For the remaining two claims, suppliers provided no documentation at all despite multiple OIG requests.

Based on the sample, the OIG projected that Medicare made approximately $15.2 million in improper payments during the audit period.

CMS and the durable medical equipment Medicare administrative contractors relied heavily on suppliers to self-certify documentation compliance. The OIG suggests that based on its review, the internal controls in place sometimes failed to prevent suppliers from billing Medicare for PAP device claims that did not meet Medicare coverage requirements. Specifically, CMS did not have any internal controls in place involving replacement PAP devices. The insufficient controls allowed Medicare to make improper payments to suppliers.

Recommendations. The report included two recommendations. First, the OIG recommended that CMS establish and implement internal controls to prevent improper payments for replacement PAP devices, which amounted to an estimated $15.2 million for the audit period. Second, the OIG recommended that CMS provide outreach and education to suppliers on coverage requirements for PAP devices used in treating OSA to prevent improper payments.

CMS did not explicitly state its concurrence or nonconcurrence with the first recommendation. CMS concurred with the second recommendation that it provide outreach and education to suppliers on coverage requirements for PAP devices used in treating OSA to prevent improper payments. CMS highlighted existing outreach through webinars, in-person training, individualized TPE reviews, and published articles.

ReportsLetters: OIGReports CMSNews AuditNews MDeviceNews MedicareContractorNews ProgramIntegrityNews