Busted: The top fraud schemes of Q3 2024
As we approach the end of 2024, fraud, waste, and abuse (FWA) continue to be significant issues within healthcare. Perpetrators of fraud often use tactics such as kickbacks, fraudulent claims, and exploiting vulnerable populations, deceiving health plans and causing potential harm to members. Here’s a rundown of notable FWA cases from July to September 2024.
Physician fraud: $39.6 million
A physician in Montana was charged with conspiracy to commit wire fraud, accused of falsely billing Medicare and other health programs for approximately $39.6 million. Allegations include improper billing for telemedicine visits that did not occur, unnecessary medical equipment and COVID-19 tests. The scheme also supposedly involved submitting false claims that not only defrauded healthcare programs, but also were said to have undermined trust in the telemedicine system during a critical time when such services were essential.
Genetic testing fraud: $40 million
A federal grand jury has indicted seven people for their involvement in an alleged scheme to defraud Medicare and Colorado Medicaid through fraudulent genetic testing claims. The indictment alleges that the defendants conspired to pay kickbacks and bribes to marketing companies for patient referrals, leading to over $40 million in false claims. Supposedly, the scheme involved unnecessary genetic testing, targeting elderly Medicare beneficiaries through call centers, and obtaining doctors' signatures on fraudulent test orders. Some defendants are also charged with laundering the proceeds of these fraudulent activities.
Urine testing fraud: $32.7 million
A Louisiana-based doctor has been indicted for defrauding Medicare of more than $32.7 million by allegedly submitting claims for medically unnecessary urine drug testing services. Over a span of more than a decade, the doctor reportedly billed Medicare for testing multiple drug classes in urine samples from nearly all his patients, despite lacking medical justification or suspicion of drug use. Medicare reimbursed him over $11.7 million for these unnecessary services.
Opioid fraud scheme: $28 million
Nine individuals, including three doctors, were charged with conspiracy to illegally distribute prescription drugs. The indictment claims that both controlled and non-controlled maintenance medications were fraudulently billed to healthcare benefit programs, including Medicare and Medicaid. The charges allege that, over several years, a scheme was carried out in which doctors issued controlled substance prescriptions for "fake" patients without medical necessity, in exchange for cash payments. Those who were recruited would fill these prescriptions and sell the drugs illegally.
Fraudulent DME billing: $15 million
In connection with a $15 million Medicare billing fraud scheme, multiple individuals have been charged, including a man from Tennessee and others from Florida. The main perpetrators are owners and marketers of several medical supply companies who allegedly engaged in selling doctors’ orders for unnecessary genetic tests, medications, and durable medical equipment (DME). Their supposedly fraudulent methods involved paying and receiving kickbacks and bribes from telemedicine companies and marketers to secure these orders.
Injectable medication fraud: $10 million
A grand jury has indicted a doctor and her husband in Anchorage for allegedly deceiving patients about prescribed injectable medications. The indictment charges the couple with healthcare fraud and tax evasion. Federal prosecutors claim they misled patients regarding the necessity of certain medications, filed false insurance claims, and included inaccurate information in tax filings from 2014 to 2017. The specific substances injected were not disclosed in the indictment, but it states that patients had not consented to receive certain medications. The couple allegedly inflated the number of injections administered and the time spent with patients in claims to healthcare benefit programs.
Mental health fraud: $10 million
Six individuals were indicted for conspiring to defraud the Medicaid program in Washington, D.C. by submitting false claims for mental health services. The alleged scheme was led by an individual who, as a financial officer of a mental health provider, allegedly organized the fraudulent billing of services that were either medically unnecessary, not reimbursable, or did not take place. This supposedly included manipulating the billing for an intensive mental health program meant for high-risk patients, thereby inflating the hours and costs submitted to Medicaid. According to prosecutors, following a dispute with his employer, the scheme continued through a new company, with several other co-conspirators joining in. The fraudulent activities were said to include fabricating assessments, overstating service hours, and billing for services that never occurred.
Medicaid fraud and identity theft: $2 million
A Texas man has been arrested and charged with healthcare fraud and aggravated identity theft related to an alleged scheme defrauding the state's Medicaid program. According to the indictment, the defendant allegedly submitted over 15,000 fraudulent claims to Medicaid between 2018 and 2022, resulting in about $2 million in payments for services that were never provided. The scheme involved the use of personal information from Medicaid beneficiaries without their consent, enabling the submission of false claims for counseling services that did not occur.
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