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PAYMENT INTEGRITY

Busted: The top healthcare fraud schemes of Q4 2020

Numerous bad actors in healthcare continued to be at large in 2020, exploiting the COVID-19 health crisis and taking advantage of health plans and their members. In Q4, healthcare fraud schemes included exploitation of telemedicine services, abuse of patient data, and multiple kickback schemes. Take a look at some of the top stories we’ve rounded up with help from the National Health Care Anti-Fraud Association (NHCAA).

Telehealth conspiracy: $6 billion 

The Justice Department charged 345 people with fraudulently billing federal and private health plans. The collective amount of the fraudulent claims added up to $6 billion—$4.5 billion of which was connected to telemedicine schemes. These schemes included inflating the number of patient visits and ordering unnecessary equipment—sometimes after only a brief phone call or without interacting with a patient at all. Of the 345 people charged, 100 were medical professionals.

Louisiana DNA kickback scheme: $117 million 

The owner and operator of a Louisiana company was charged with submitting improper billings to Medicare. The scheme? According to the indictment, the owner, his company, and other co-conspirators exchanged patient DNA, pharmacogenetic testing, and cancer genetic tests for kickbacks and bribes. The billings totaled approximately $117 million.

Florida healthcare data ploy: $109 million

Two Florida residents were caught selling Medicare patients’ personal and medical data by exploiting Medicare eligibility software provided by a person in California. They sold the data to a third party, who used the patient data to submit over $109 million fraudulent claims for medical equipment. The resulting charges include one count of receiving kickbacks in connection with a federal healthcare program as well as violating the HIPAA statute.

Tennessee distribution services fraud: $41 million 

A Tennessee physician and his wife have been charged in a 25-count indictment after using their pain clinics to illegally distribute and dispense controlled substances. The couple and their co-conspirators prescribed unnecessary office visits, drug screens, prescription drugs, and more—and in some cases, these items weren’t provided. The couple’s alleged plot defrauded Medicaid, Medicare, and other healthcare payers out of a total of $41 million.

Michigan delivery to the deceased: $9.2 million 

Three in Michigan are facing charges that include healthcare fraud and money laundering. The pharmacy owner and his two relatives allegedly submitted around $9.2 million worth of fraudulent claims to Blue Cross Blue Shield of Michigan, Medicare, and Medicaid for medications that were never dispensed. In fact, part of the indictment reads that the defendants are being charged with billing payers for submitting claims for the delivery of more than 500 medications to people that had died prior to the claimed date of delivery. The fraudulent claims were submitted over the course of eight years, ending in 2018.

New Jersey doctor billed while out of the country: $15.3 million 

A doctor who owned and operated a pain management clinic chain was charged for billing over $15.3 million to Medicaid and over $8 million to Medicare for unprovided services. The investigation found that the doctor frequently billed for services that took place when he was out of the country. The alleged scheme lasted six years, from 2014 and 2020, resulting in charges including healthcare fraud, wire fraud, and mail fraud. 

Massachusetts mental health fraud scheme: $10 million

A Massachusetts psychiatrist was found to have billed Medicare and private insurers over $10 million for thousands of sessions he never provided. In fact, he claimed over 8,000 sessions were provided to 75 patients who didn’t receive a single session. He was also found to have obstructed justice in order to conceal his crimes. His charges included wire fraud, false statements relating to health care matters, falsification of documents, and more.

Texas false medical record conspiracy: $10 million

Two owners of a Texas home health agency were arrested and charged with healthcare fraud, conspiracy to commit healthcare fraud, and conspiracy to pay and receive healthcare kickbacks. Their company allegedly billed Medicare for unnecessary and unprovided home health services. The couple covered patients’ costs to facilitate their scheme, and even created fake medical records to match Medicare’s criteria for being reimbursed. Authorities said the defendants fraudulently billed over $10 million to Medicare.

New York pharmacy healthcare fraud: $30 million

The two owners of more than a dozen New York-based pharmacies were found to have exploited emergency codes and Medicare edits that were created as a response to COVID-19. They submitted false claims for expensive cancer drugs that were either unprovided or unauthorized. Both were charged with conspiracy to commit healthcare fraud and wire fraud, as well as conspiracy to commit money laundering. The claims totaled to $30 million.

Massachusetts urine test lab fraud

Four people in Massachusetts connected to a medical lab were indicted for submitting false Medicaid claims, as well as other counts. The lab allegedly submitted millions in false claims for urine drug testing while violating the state’s self-referral law. The charges include: violating the laboratory self-referral statute; Medicaid false claims; Medicaid reverse false claims; money laundering, assault, and battery; and more.


Does reading this article have you concerned about whether your organization has the right tools and expertise in place to combat frequently evolving fraud schemes, protecting both your business and your members? Learn the benefits of Cotiviti’s suite of fraud, waste, and abuse management solutions.

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WRITTEN BY

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 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).

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