Medicare approved two fake companies to supply wheelchairs and other equipment, even though the phony firms had no inventory or clients, says a Government Accountability Office report released Monday.
The bogus companies in Maryland and Virginia were set up by government investigators looking into fraud problems afflicting Medicare, Bloomberg news reported.
"If real fraudsters had been in charge of the fictitious companies, they would have been clear to bill Medicare from the Virginia office for potentially millions of dollars of false supplies," the GAO said.
Billing tests for the fake Maryland company weren't completed because the investigators didn't receive the necessary passwords from Medicare, Bloomberg reported.
In the fiscal year ending March 2007, Medicare made about $1 billion in improper payments on canes, prosthetic devices, wheelchairs, and other equipment. Medicare says it's implementing new billing oversight requirements for medical suppliers, according to Bloomberg.