Busted: The top fraud schemes of Q2 2021

From fraudulent COVID-19 tests to fake requests for durable medical equipment (DME), this spring was full of attempts to defraud healthcare payers. Here, we’ve gathered some of the most egregious cases of alleged fraud, waste, and abuse (FWA) from April through June 2021 with help from the National Health Care Anti-Fraud Association (NHCAA). 

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Durable medical equipment kickback scheme: $93M

After being discovered in a conspiracy to commit healthcare fraud, five people were charged and two pleaded guilty for a kickback fraud scheme related to durable medical equipment. The plot involved defrauding healthcare benefit programs by getting kickbacks for orders that included equipment such as orthotic braces. The damage affected Medicare, Tricare, and CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs), and cost approximately $93 million.

Fraudulent COVID-19 test conspiracy: $70M

The president of a healthcare technology company and two of its marketing associates were recently charged for their roles in a COVID-19 testing plot. The three are accused of conspiring to obtain kickbacks related to doling out unnecessary allergy and COVID-19 tests, resulting in $70 million defrauded from healthcare benefit programs.

Fraud, money laundering, and kickbacks: $47M

Two people were charged with multiple counts that included healthcare fraud, money laundering, and more, along with another, who was charged with paying and receiving kickbacks. The three, who were owners of telemarketing companies, are said to have fraudulently referred medically unnecessary genetic tests that screened for cancer. The referrals were made to labs in exchange for kickbacks and totaled $47 million.

Medicare DME fraud scheme: $20M

Two nurse practitioners, as well as two owners of durable medical equipment companies, were charged in a 24-count indictment healthcare fraud conspiracy. The four worked together, defrauding Medicare with more than $20 million in payments for fraudulent DME claims. Allegedly, the defendants would sign prescriptions for medical braces without any signs of medical necessity, without a physical examination of the patient, and often without having any contact with the beneficiary at all.

Claims from nonexistent patients: $8.4M

A California physician pled guilty to conspiracy to commit healthcare fraud. The charges allege that he submitted over $8.4 million in claims for family planning services, diagnostic testing, and prescriptions for patients that didn’t exist. The payments defrauded the Family Planning, Access, Care and Treatment program of the state's Medicaid program.

Pharmacy coupon exploitation fraud: $8M

Two Miami residents were arrested and charged with six counts of money laundering after being caught submitting false claims to prescription drug coupon programs. Court documents showed that the two, who owned 15 Miami-based retail pharmacies, exploited $8 million from these programs.

False certifications for home healthcare: $6M

A California physician was charged with a $6 million healthcare fraud scheme as a result of her role in a plot involving alleged Medicare fraud. As the operator of two medical clinics, the physician provided false home healthcare certifications to four home health agencies. These home health agencies providing the care then fraudulently billed Medicare for services that were not necessary. The physician also submitted claims to Medicare for patient visits and treatments that were neither necessary nor provided.

Billing for nonexistent sleep studies: $5M

Two people were charged with multiple counts of attempted tax evasion related to a fraudulent sleep study plot. The duo, who owned a sleep lab with another co-defendant, billed hundreds of sleep studies that never took place to a health insurance company, totaling $5 million. The two also evaded paying federal income taxes on the income from their scheme.

Unnecessary tests for union members: $4M

Two men pled guilty to conspiracy to commit healthcare fraud after being found to have defrauded a union-run health benefit. The two men are accused of running unauthorized health events as well as thousands of medically unnecessary tests on its members. The fraud totals more than $4 million.

Fake medical diagnoses and imaginary office visits: $2.2M

A former chiropractor was found guilty of multiple counts of healthcare fraud, of making false statements relating to healthcare matters, and aggravated identity theft. She was found to have billed for office visits that never took place and provide fake medical diagnoses, among other offenses, and defrauded health insurers of $2.2 million.

Get the right tools to combat frequently evolving fraud schemes before claims are paid, protecting both your business and your members. Learn the benefits of Cotiviti’s FWA Validation solution. 

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Erin Rutzler
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 ten 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).

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