As we review the third quarter of 2023, we’re confronted with a resurgence of fraud, waste, and abuse (FWA) cases that continue to target both public and private payers. These cases persistently employ a range of deceptive tactics, including kickbacks, falsified claims, and the exploitation of vulnerable individuals. With help from the National Health Care Anti-Fraud Association (NHCAA), we've diligently compiled a comprehensive list of significant FWA cases that emerged between July and September 2023.
Fraud, kickbacks, and money laundering: $170 million
Two pharmacists and a physician were charged with participating in a multimillion-dollar healthcare fraud, kickback, and money laundering plot targeting the federal workers’ compensation program. The group allegedly referred medically unnecessary, expensive prescriptions to each other in exchange for illegal kickbacks and bribes. The indictment further alleges that one of the defendants conspired to launder the illicit gains from these activities through large financial transactions exceeding $10,000.
Genetics testing fraud: $142 million
Three Texans were charged for their alleged role in falsifying testing records to inflate reimbursement from Medicare. Allegedly, the two manipulated the dates of service on testing orders, creating the impression that they had gathered numerous DNA samples on various occasions. This allowed them to charge for multiple service dates, consequently inflating their reimbursement for genetic testing claims. Officials also believe the two paid illegal kickbacks to marketers and doctors for testing recipient information.
Defrauding the Department of Labor: $80 million
Two people who operated a chain of physical therapy clinics were charged with multiple counts of healthcare fraud, healthcare fraud conspiracy, and money laundering. The two are said to have participated in false, inflated claims for therapy, fictional medical visits, excessive therapy, and fraudulent durable medical equipment for physical therapy services worth over $80 million to the Department of Labor for federal employees. One of those charged also allegedly claimed to be a physician instead of a physician's assistant.
Pharmaceutical fraud: $33 million
A pharmacist and two executives are accused of Medicare and TRICARE fraud. According to court documents, the two allegedly used telemedicine to work with marketing companies to fill unnecessary prescriptions for expensive medications and fraudulently submitted reimbursements to Medicare and TRICARE. The marketing companies supposedly pressured beneficiaries by phone to agree to try the expensive medications, including various creams and migraine medication.
Fraud, kickbacks, and money laundering: $20 million
Two acupuncturists, two physical therapists, and an insurance company employee were charged with multiple healthcare violations involving kickbacks. According to court documents, the defendants claimed to perform physical therapy and acupuncture services that were allegedly not provided as described or were not provided at all. The group also is said to have provided cash kickbacks to patients for sharing insurance information and receiving unnecessary or non-existent services.
Fraudulent Medicare equipment claims: $14 million
Two operators of a durable medical equipment firm were charged for a Medicare scheme totaling $14 million. Since 2019, the two allegedly submitted fraudulent claims to Medicare to purchase and repair power wheelchairs, power scooters, and other equipment, including billing more than $700,000 in parts and repairs for a single patient.
Dental care fraud: $10 million
State attorneys filed a lawsuit against a dental management company for healthcare fraud. The lawsuit claims that the company submitted claims to Medicare and private insurance on behalf of their patients without their permission and did not inform patients of their rights and protections. The defendants also allegedly did not tell patients that the services would not be covered under insurance, or they claimed the cost was higher than the true cost, all while charging fees for third-party loans.
Specialty drug fraud: $7 million
Three healthcare providers were charged for an alleged scheme that defrauded Medicare and Blue Care Network. For several years, a licensed pharmacist supposedly worked with a pharmacy technician and a physician on writing prescriptions for medically unnecessary specialty drugs, which they resold to domestic and foreign businesses at 100% profit.
Fake HIV medication bills: $3 million
The owner and manager of a pharmacy were charged with multiple violations for a Medicare scam totaling nearly $3 million. The two charged were accused of paying Medicaid recipients to submit false claims for HIV drugs to the pharmacy. The pair’s alleged scheme targeted a Medicaid-funded managed care organization.
False psychotherapy services: $2.5 million
A clinic owner in Illinois received multiple charges for allegedly committing nearly $2.5 million in theft, forgery, and managed healthcare fraud. For close to two years, the defendant supposedly submitted fraudulent claims worth over $978,000 to one payer and over $1.5 million to a managed care organization for psychotherapy services that she never provided. This led the Illinois attorney general to state, “Illinois’ Medicaid program serves thousands of residents who rely on Medicaid for their healthcare. I will not tolerate individuals abusing the program and stealing critical funding for their own financial benefit.”
Fraud, waste, and abuse (FWA) is an area of constant concern for health plans. Whether inappropriate billing is happening purely by accident, due to lack of correct coding education, or with malicious intent from bad actors, flagging and fixing billing errors is a continual process. A strong FWA strategy is the only way to safeguard plans against inappropriate billing.
In our new eBook, we dive into several specific areas susceptible to FWA:
- Durable medical equipment (DME)
- Mental health services
- Genetic testing and molecular pathology services
- Dental services and more
Read through best practices and takeaways from Cotiviti’s special investigative unit (SIU) to empower your plan to detect and prevent future schemes.