To compute Medicare's rate of wrong payments, Medicare officials instructed auditors to set aside government policies that accurately measure fraud. One example was sales invoices for claims that were not compared against physicians' records.
This method resulted in auditors failing to discover over one-third of the reimbursements it paid were for wheelchairs, oxygen supplies and other medical equipment worth $2.8 billion.
Medicare claimed to Congress that in 2007 the agency further reduced medical equipment fraud by $700 million.
The New York Times said the report will be made public next week.
Medicare spokesman Jeff Nelligan denied the agency manipulated its report. "Allegations of manipulation of this error rate are preposterous... The agency has aggressively targeted fraud and improper payments in the DME program. We have a history of working closely with the inspector general and will continue to do so," Nelligan told the New York Times.
Meanwhile, another complaint against Medicare is the difficulty senior citizens have in navigating its portal, according to a University of Miami report. Sara Czaja, co-director of the Center on Aging of the university's Miller School of Medicine and lead researcher of the report, said while elderly Americans acknowledged that the Internet is a vital source of medical data, they found the Medicare website confusing and its language overly complex.
