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His office said the Centers for Medicare and Medicaid Services’ oversight of durable medical equipment suppliers was inadequate to prevent fraud and that sham companies had been allowed to bill Medicare for nonexistent or unnecessary supplies. The Centers for Medicare and Medicaid Services, formerly known as the Health Care Financing Administration, has estimated that Medicare improperly paid $1 billion in a one-year period for durable medical equipment.

“It is more efficient and effective to protect the programs and beneficiaries from unqualified, fraudulent or abusive providers and suppliers upfront than to try to recover payments or redress fraud or abuse after it occurs,” Mr. Levinson said.