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Busted: The top fraud schemes of Q4 2023

Busted: The top fraud schemes of Q4 2023

In the final quarter of 2023, scrutiny reveals a notable resurgence in instances of fraud, waste, and abuse (FWA). These cases, affecting both public and private payers, have demonstrated a persistent use of deceptive tactics ranging from kickbacks and falsified claims to exploitation of healthcare programs for Native Americans. Here is a compilation of some of the most significant FWA cases to make the news from October to December 2023.  

International prescription scheme: $500 million 

Several New York residents were charged with conspiracy to commit healthcare fraud and money laundering. The defendants allegedly participated in an international scheme to acquire pharmacies across the United States that had relationships with private health insurance companies, then billed private insurers for fraudulent prescriptions that they offered without medical exams. Using these pharmacies, call centers, and recruited physicians, the defendants are believed to have generated over $500 million in allegedly fraudulent prescriptions. 

Falsely diagnosed ophthalmological diseases: $402 million 

A Texas ophthalmologist faces charges of healthcare fraud and money laundering. Government officials accused the doctor of falsely diagnosing patients with eye diseases and various degenerative eye conditions and directing staff to conduct fraudulent, excessive medical procedures to maximize profits. Alleged false claims amounted to about $402 million, with more than $13 million already having been paid.  

Medically unnecessary drug tests: $148 million 

A diagnostic laboratory co-owner and CEO in Louisiana was charged with a scheme to defraud Medicare and Medicaid of over $148 million in medically unnecessary urine drug testing services. Supposedly, the owner told the staff to submit order forms on behalf of providers, refused to reveal the actual nature of the testing to providers, organized a pass-through billing scheme involving hospitals, and gave kickbacks to physicians under the guise of ownership interests in the laboratory. 

Native American health services fraud: $115 million  

Three people associated with a center for Native Americans addressing substance misuse were indicted on felony charges as part of a broader investigation into Medicaid fraud. The three allegedly billed over $115 million in behavioral health services to Arizona’s healthcare cost containment system as well as the American Indian Health Program, which is a Medicaid health plan allowing providers to bill directly for services provided to Native Americans and Alaska Natives.  

Vascular procedures: $100 million 

A New York cardiologist was indicted in connection with a scheme to create fake patient records, offer providers kickbacks for patient referrals, and bill for unnecessary vascular procedures. The allegations include subjecting patients to needless procedures and directing staff to fabricate patient symptoms in medical records. Allegedly, the cardiologist billed Medicare, Medicaid, and private insurers over $100 million for vascular procedures.  

False medical claims: $60 million 

A durable medical equipment company owner was charged for his role in a $60 million scheme, spanning multiple states and involving false claims submitted to Medicare and kickbacks from other healthcare facilities. The owner is accused of billing Medicare for medically unnecessary orthotic braces and referring doctors' orders for unnecessary braces, genetic tests, and foot bath medications to other medical equipment suppliers, pharmacies, and laboratories in exchange for kickbacks and bribes. The scheme supposedly involved offshore call centers, deceptive tactics, and falsified doctors' orders.  

COVID-19 testing scheme: $69 million 

A COVID-19 testing lab owner in Illinois was charged for allegedly scheming to defraud Medicare. The lab owner is accused of participating in a scheme where companies billed Medicare over $69 million using beneficiaries' numbers for test kits that patients never wanted or received. Court documents also state that he billed Medicare for test kits for over 700 deceased patients.  

Kickbacks and medical equipment: $25 million 

Two Florida siblings were arrested on charges of healthcare fraud and kickback conspiracy. Court documents state that the two ran a Medicare billing company through which they purportedly billed Medicare for over $25 million in fraudulent claims for durable medical equipment. They were also charged with illegally buying medical equipment for use in their own companies and introducing buyers to sellers in return for additional kickbacks.  

Black-market HIV medication: $20 million  

Several medication wholesalers and pharmacy owners, along with others, face allegations of attempting to defraud Medicaid, Medicare, and private insurance companies of at least $20 million. The defendants are accused of trafficking in black-market HIV medication, exploiting hundreds of low-income individuals who were prescribed the medication. Several of those accused were allegedly facilitating the flow of black-market HIV medications to pharmacies, who dispensed the medication to patients or distributed it to other pharmacies. The defendants are also accused of funding and paying illegal kickbacks to recruit patients and increase fraudulent billing.  

Elderly medical equipment scheme: $13.7 million 

An Ohio physician was charged with conspiracy to violate the anti-kickback statute in connection with an allegedly fraudulent medical supply scheme targeting elderly Medicare and TRICARE beneficiaries. The Justice Department says the physician participated in a scheme that obtained beneficiary medical information through telemarketers and then created fake medical records and orders for medically unnecessary equipment.

Preventing and managing FWA requires continuous education on new trends and thorough preparation in your investigative plans. Stay up to date with our latest Cotiviti Program Integrity Pulse webinar as our experts explore potential FWA trends anticipated for 2024 related to CPT code updates, emerging trends, and more. 

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About the Author

As vice president of fraud, waste, and abuse (FWA), Erin is responsible for the oversight and strategic direction of Cotiviti’s FWA solution suite. In her role, Erin has been integral in the development of Cotiviti’s FWA solutions over the past eight years. Serving as the company’s primary subject matter expert in investigations and FWA for compliance, client training, sales, and marketing activities, she regularly represents the company at industry conferences such as the National Health Care Anti-Fraud Association’s (NHCAA) Annual Training Conference (ATC).

Profile Photo of Erin Rutzler