If you use a continuous glucose monitor or test strips and your Medicare claim came back denied, you're running into one of the most error-prone corners of the entire Medicare program. Federal data released this week shows the improper payment rate for glucose monitors sits at 25.2 percent — roughly one in four claims — with a projected $278.5 million in improper payments in a single reporting year. Separately, a federal watchdog found Medicare has been paying suppliers dramatically more for these devices than they actually cost, with beneficiaries footing 20 percent of those inflated prices. Both problems are now being addressed, and both have direct consequences for what you pay. Here's what's happening and what to do if your claim was denied.
📋Quick Summary
- The improper payment rate for Medicare glucose monitors is 25.2%, totaling a projected $278.5 million in one reporting year.
- The overwhelming majority of these errors are documentation problems, not fraud — 67.6% stem from no documentation at all, and 26.6% from insufficient documentation.
- Separately, an HHS Inspector General report found Medicare paid suppliers $377 million (69%) more than their acquisition costs for CGMs and supplies over a one-year period.
- Because Medicare beneficiaries pay 20% coinsurance on durable medical equipment, inflated prices meant beneficiaries were overpaying too.
- CMS has finalized including continuous glucose monitors in the DMEPOS Competitive Bidding Program, a process beginning in 2026 and completing by January 1, 2028.
- Previous competitive bidding rounds produced average savings of about 35% compared to standard fee schedule prices.
- Most denied claims are correctable — the fix usually involves your prescribing doctor's documentation, not you.
Why Glucose Monitor Claims Get Denied So Often
The 25.2 percent improper payment rate sounds alarming, and in fiscal terms it is — but understanding what's actually driving it changes how beneficiaries should think about a denial notice.
According to CMS data covering the 2024 reporting period, the vast majority of improper payments for glucose monitors trace back to documentation problems rather than any deliberate wrongdoing. Missing documentation entirely accounted for 67.6 percent of improper payments. Insufficient documentation accounted for another 26.6 percent. Other errors made up the remaining 5.8 percent. In other words, roughly 94 percent of the problem is paperwork that either wasn't submitted or wasn't complete enough to establish that the equipment met Medicare's coverage requirements. An improper payment is an accounting finding about documentation — it is not, by itself, a finding of fraud.
For diabetic testing strips specifically, CMS identified three recurring errors that cause denials: claims submitted without a documented diabetes diagnosis code, claims that overlap with an inpatient hospital stay, and claims that overlap with a skilled nursing facility stay. The latter two happen because Medicare covers durable medical equipment differently when you're an inpatient — the facility is responsible for supplies during that stay, so a separately billed supply claim covering the same dates gets denied automatically, even though the beneficiary did nothing wrong and genuinely needed the supplies.
This distinction matters because it means most denials are correctable rather than final. A denial caused by a missing diagnosis code or an incomplete face-to-face encounter note is a fixable administrative problem — one that typically requires your prescribing physician's office to supply or correct documentation, not something you need to litigate or appeal on the merits of medical necessity. If you want the underlying framework first, see how Medicare Parts A, B, C, and D actually work, since durable medical equipment sits under Part B.
Sources: CMS — Glucose Monitoring Supplies compliance guidance; CMS MLN Connects Newsletter, August 6, 2026.
Because roughly 94% of glucose monitor payment problems stem from missing or insufficient documentation, the fastest path to resolving a denial is usually your prescribing doctor's office rather than a formal Medicare appeal. Call and ask them to confirm three things: that your diabetes diagnosis code is documented on the claim, that a qualifying face-to-face encounter is on record, and that the medical necessity documentation Medicare requires for your specific device is complete and on file. If a supplier submitted the claim, ask them what specific denial reason code came back — that code tells your doctor's office exactly what's missing. Many denials resolve on resubmission once the gap is filled, without ever needing a formal appeal.
The Overpayment Problem — and Why It Cost You Money Too
Separate from denials, a federal watchdog report identified a pricing problem that has been quietly costing both Medicare and beneficiaries for years.
The HHS Office of Inspector General examined what Medicare paid for continuous glucose monitors and supplies compared to what suppliers actually paid to acquire them. Over a one-year period from July 2022 to June 2023, Medicare payments exceeded suppliers' acquisition costs by $377 million — roughly 69 percent above what the equipment cost the suppliers to obtain. Even after accounting for suppliers' total estimated costs including overhead and delivery, Medicare still overpaid by approximately $70 million, or 8 percent.
The gap was most pronounced on supplies rather than the devices themselves. CGM supplies — the sensors and transmitters that need regular replacement — account for 93 percent of all Medicare payments for CGM systems, and it's there that the pricing disparity was widest. Medicare payments for these supplies exceeded what the same items sold for at retail pharmacies by roughly $290 million annually.
This is where the beneficiary impact becomes direct. Medicare Part B durable medical equipment carries 20 percent coinsurance after the annual deductible is met. When Medicare's payment rate for an item is inflated above market price, the beneficiary's 20 percent share is inflated proportionally. A diabetic beneficiary paying coinsurance on sensors priced well above what the same sensors cost at a retail pharmacy has been absorbing part of that overpayment directly, every month, for years. You can see how the deductible-then-coinsurance structure works in our 2026 Medicare costs breakdown.
The scale of the underlying spending explains why this drew scrutiny: Medicare Part B payments for CGMs and supplies rose from $109 million in 2018 to $1.3 billion in 2023, as coverage expanded to more beneficiaries and CGM adoption grew rapidly among people managing diabetes.
Sources: HHS OIG Report OEI-04-23-00430; McKnight's Home Care — Medicare overpaid $377M for diabetes monitoring equipment.
Related Medicare Updates
✅What This Means for You
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What's Changing — Competitive Bidding and Lower Prices
The response to the overpayment findings is already underway, and it will change what beneficiaries pay — though not immediately.
CMS has finalized a rule including Class 2 continuous glucose monitors and their supplies in the next round of the DMEPOS Competitive Bidding Program. Competitive bidding works by having suppliers bid to serve a given geographic area, with Medicare setting payment rates based on the winning bids rather than a standard fee schedule. The process is expected to begin in 2026 and be completed no later than January 1, 2028.
The savings potential is meaningful based on prior experience: previous rounds of DMEPOS competitive bidding produced average savings of roughly 35 percent compared to standard fee schedule prices. If CGMs follow a similar pattern, both Medicare's payments and beneficiaries' 20 percent coinsurance share would fall substantially.
There is a tradeoff worth understanding honestly. Competitive bidding reduces prices in part by limiting the number of suppliers eligible to bill Medicare in a given area — winning bidders become the approved suppliers, and others cannot bill for those items in that region. For beneficiaries, this can mean needing to switch to a different supplier when the program takes effect in your area, even if you've been satisfied with your current one. Prior competitive bidding rounds generated real complaints about supplier disruption and access, particularly for beneficiaries in rural areas or those with established relationships with local suppliers.
CMS is also addressing the improper coding problem separately. The OIG found approximately $7 million in potential overpayments specifically from suppliers billing higher-paying codes while providing equipment that should have been billed under lower-paying codes. CMS concurred with the OIG's recommendation to take action on this, which should reduce a distinct category of overpayment beyond what competitive bidding addresses. This is a supplier-side billing issue — it does not mean beneficiaries did anything wrong or owe anything back.
Sources: PAAS National — OIG Report on CGM payments; MedTech Dive — OIG report finds Medicare overpaying for CGMs.
📊Medicare Glucose Monitor Coverage: Key Numbers
What to Do Right Now If You Depend on a Glucose Monitor
Whether you're dealing with a denial today or simply want to avoid one, a few concrete steps put you in a stronger position.
Confirm your documentation is complete before your next order. Ask your prescribing physician's office to verify that your file contains a documented diabetes diagnosis with the appropriate code, a qualifying face-to-face encounter within Medicare's required timeframe, and current medical necessity documentation for your specific device. These three items account for the overwhelming majority of denials, and confirming them proactively is far easier than correcting a denial after the fact.
Watch for the overlapping-stay problem. If you've recently been hospitalized or spent time in a skilled nursing facility, supply claims covering those same dates will be denied automatically, because the facility is responsible for supplies during an inpatient stay. This is one of the most common denial causes and is entirely predictable — if you have a hospitalization coming up, or just had one, expect a possible claim issue and flag it with your supplier proactively rather than being surprised.
Compare your out-of-pocket cost against retail. Given the OIG's finding that Medicare has been paying substantially more than retail pharmacy prices for CGM supplies, it's worth checking what your 20 percent coinsurance actually costs versus what the same sensors cost cash-price at a pharmacy. For some beneficiaries — particularly those who haven't met their Part B deductible yet in a given year — purchasing supplies outside of Medicare can occasionally cost less. This won't be true for everyone, and it means those costs don't count toward your deductible, but it's worth running the numbers for your specific situation.
Finally, track the competitive bidding rollout in your area. As the program phases in through January 2028, the approved supplier list in your region may change. If your current supplier isn't a winning bidder, you'll need to transition — and knowing that in advance prevents a gap in supplies at a moment when consistent glucose monitoring matters for your health. You can look up Medicare-approved suppliers and find approved DME suppliers on Medicare.gov, and a free SHIP counselor in your state can review a denial letter with you at no cost.
Sources: CMS Glucose Monitoring Supplies; HHS OIG; Home Care Magazine.
