Resale of Diabetic Test Strips costing taxpayers millions

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CHICOPEE, Mass. (WWLP) – Diabetic Test Strips have become a hot commodity in western Massachusetts.

There are signs and advertisements across western Massachusetts that offer cash for Diabetic test strips, medical supplies that’s considered essential for Diabetics, who use them several times a day to test their blood sugar levels.

Baystate Endocrinologist Chelsea Gordner told 22News she first saw these types of ads about a year ago, and immediately had several medical concerns. “It sounded a bit ludicrous to me. If they’re not in a certain temperature controlled environment, they can give inaccurate results, there’s even an infection risk. These can be recalled, they can be expired, and all of that can lead to inaccurate results, and potentially risky situations,” she said.

22News wanted to see how this grey market works. We posed as a seller, then called a number on a mail voucher to set up a buy. The person on the other line asked me details about us test strips, then offered us $40 for the box.

A box of diabetic strips can cost more than $80 a box, unless it’s covered by your health insurance.

The company we called sent a courier meet us that same day. The courier refused to answer our questions about this grey market, at one point, he even gave our camera the middle finger.

The courier claimed the business he works for is legal and legitimate, and referred to his boss before walking away from our cameras. We attempted to call the number nine times over a period of three days, but were never able to get in touch with his boss.

We also wanted to know whether this grey market was legal.

The Department of Health and Human Services told 22News technically, there’s no law against the resale of diabetic test strips, but there are exceptions. For example, if the test strips were paid for by Medicare or Medicaid, the person selling them would be breaking the law.

Matthew Charette, an investigator for the Office of Inspector General told 22News, it could also be illegal for the buyer if it’s proven they willingly purchased strips that were paid for by a federal health care program, like Medicare or Medicaid. “If a patient actively seeks these supplies, with the intent to resell them for profit, when they don’t have the medical necessity, technically, the beneficiary could be involved in health care fraud. If the company purchasing them knows these strips were purchased through Medicare, you could certainly say they could be complacent,” he said.

The companies that resell the test strips are also supposed to register with the FDA, but many fail to do so.

The Office of Inspector General also told 22News taxpayers have lost hundreds of millions of dollars to this grey market, which often times, can lead to health care fraud.

Out of 400 Medicare claims across four Medicare contractors in 2013, more than 300 had some type of deficiency. The issues ranged from sending too many test strips to a patient, to sending test strips to a patient who was missing the proper documentation from a doctor.

Buyers have also used patient identification numbers on the back of test strip boxes to fraudulently reorder them in bulk. They then resell them on websites like eBay or Craigslist at a discounted rate, a crime that has cost taxpayers up to $209-million in one year.

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