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Busted: The top fraud schemes of Q1 2024

Busted: The top fraud schemes of Q1 2024

As we reflect on the first stretch of 2024, we're faced with a resurgence in instances of fraud, waste, and abuse (FWA). These fraudulent incidents persistently use nefarious methods such as kickbacks, fabricated claims, and deceit of vulnerable healthcare consumers to take advantage of health plans while providing harmful, medically unnecessary services. With assistance from the National Health Care Anti-Fraud Association (NHCAA), we've gathered this rundown of notable FWA cases that arose from January to March 2024.

Catheter supply fraud: $2 billion

An alleged scheme revolving around false billing for at-home catheters may potentially result in significant financial implications for Medicare, amounting to an estimated $2 billion—nearly one-fifth of the agency's total medical supply expenditure for the year 2023. The suspected perpetrators are believed to have orchestrated an influx of claims for catheters that were delivered but not received by patients. This pattern of fraudulent billing extends to other medical supplies, including COVID-19 tests, knee braces, and back braces.

Fraud and kickbacks: $97 million

A Florida man has been indicted on charges associated with healthcare fraud for his involvement in a durable medical equipment (DME) kickback operation. He and his associates allegedly owned and managed numerous call centers, through which they purportedly acquired signed orders for medically unnecessary DME, such as orthotic braces. Prosecutors allege that the orders were subsequently utilized to fraudulently bill Medicare.

Nursing home fraud: $83 million

Two nursing homes in southern New Jersey have been barred from participating in the Medicaid program. Court documents claimed that significant funds were extracted by the proprietors of these facilities from both Medicare and Medicaid. Additionally, the nursing homes have been cited for violations related to health and safety standards.

Medical clinic fraud: $21.9 million

A prominent insurance company has initiated legal action against a Florida-based clinic and its owner, alleging involvement in a scheme related to insurance fraud. The lawsuit alleges that the clinic conducted risky spinal procedures without legitimate medical necessity, submitted dishonest claims for services either not rendered or misrepresented, and relied on fabricated medical documentation to support these claims.

Medical equipment fraud: $20.7 million

A medical professional from Queens has been indicted in relation to a healthcare fraud scheme. Per court records, the individual allegedly received kickbacks from a laboratory representative and the owner of a medical equipment supply company. In return, he signed orders for medically unnecessary lab tests and orthotic braces, which were then falsely billed to Medicare and Medicaid. He is also accused of submitting claims to Medicare for extended office visits that did not occur and approving COVID-19 and genetic cancer tests without patient request or utilization in treatment.

Therapy fraud: $13 million

A licensed marriage and family therapist from St. George, Utah, has been accused of violating the state's False Claims Act. While employed at a counseling center between March 2019 and June 2022, he allegedly facilitated the submission of over 2,000 false claims to Medicaid by signing off on patient records for sessions he did not conduct.

Medicare fraud: $10 million

A resident of California who owned multiple marketing firms has been charged with conspiracy related to violations of the Anti-Kickback Statute, as well as conspiracy to commit healthcare fraud and wire fraud. According to prosecutors, he allegedly collaborated with others to enlist Medicare beneficiaries for medically unnecessary at-home cancer genetic tests. These tests were then utilized to generate fraudulent claims to Medicare.

Arizona Medicaid fraud: $9.4 million

A 30-count indictment has been returned against two people who operated a company in Arizona in connection with an alleged scheme to defraud more than $9.4 million from the state's Medicaid program. The accused purportedly used their company to overbill for mental health services ostensibly rendered to economically disadvantaged Native American residents between 2020 and 2021. Additionally, the Justice Department says they billed patients who were incarcerated or deceased.

Detox center fraud: $4 million

The owner of a detox facility in Florida is facing charges in connection with a healthcare fraud case exceeding $4 million. Authorities claim that he allegedly used personal information from former clients to file deceptive claims with health benefit programs for substance abuse treatments, even following the facility's closure in January 2018.

Medically unnecessary neurosurgery

A hospital system based in Tacoma, Washington, has come under scrutiny for purportedly breaching the False Claims Act and deceiving Medicare, Medicaid, and other federal healthcare programs. The Justice Department says that the organization hired a neurosurgeon who was reportedly linked to fraud accusations to conduct neurosurgical procedures at one of its facilities. Prosecutors say this not only led to fraudulent billing but endangered patients.

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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