Medicare officials may have manipulated their 2006 audit to mislead Congress about the agency's fight against fraud in the medical equipment industry, according to a damning inspector general report expected to be released early next week.

Some veteran members of Congress said Thursday they felt deceived by the agency managing the giant entitlement program for the elderly and predicted lawmakers would hold oversight hearings in the fall to grill Medicare officials.

A draft of the report said Medicare boasted it was gaining control over fraud, waste and abuse in the health insurance program, when in fact the agency's payment error rate was four times higher than it was touting for medical equipment reimbursements, according to a leading lawmaker.

The actual error rate: 31.5 percent.

Sen. Chuck Grassley of Iowa, ranking Republican on the Senate Finance Committee, criticized the Centers for Medicare and Medicaid Services for irregularities cited in the draft report by the U.S. Department of Health and Human Services' Office of Inspector General.

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