MIAMI, Fla -- Firms that are paid tens of millions of dollars to root out Medicare fraud are bidding on contracts to investigate companies they are doing business with - sometimes their own parent companies. That's according to a government report released Tuesday.

Two-thirds of the companies that bid on contracts during a nearly year-and-a-half time period beginning in October of 2010 had financial ties to claims processors - and in some cases also processed Medicare claims themselves. A report by the U.S. Department of Health and Human Services' inspector-general blames what it calls a flawed bidding system and an inadequate conflict-of-interest policy.

The study looked into bids from about 100 potential contractors and subcontractors and found nearly 2,000 relationships that posed potential conflicts. For example, one company submitted a bid to investigate Medicare fraud even though its parent company provided two types of Medicare coverage in all 50 states.

Medicare fraud contractors are often tied to a large number of providers, but the report doesn't break the numbers down by each contractor.