Busted: The top healthcare fraud schemes of Q4 2021

The second full year of the COVID-19 pandemic unfortunately closed out with a spike in allegations of healthcare fraud, waste, and abuse (FWA). These alleged schemes came in the form of kickbacks, falsified claims, overbilling, and more. With help from the National Health Care Anti-Fraud Association (NHCAA), we gathered some of the most prominent cases of apparent FWA from October through December 2021.

Fraudulent and unperformed lab tests: $100 million 

An Arkansas man who owned multiple diagnostic testing labs was indicted for 16 counts of healthcare fraud totaling over $100 million. The indictment alleges false billings for various unnecessary or unperformed tests, including urine and COVID-19 tests. According to the indictment, the man allegedly obtained medical information and then wrongfully used the information to submit claims to Medicare. 

Infusions infused with fraud: $38 million

 A Florida man was arrested and charged with healthcare fraud after he allegedly submitted over $38 million of fraudulent claims to major private payers. This man owned and operated a medical clinic where he allegedly submitted false and fraudulent medical claims for an infusion that was not provided or was unnecessary. The infusion was an expensive prescription drug used to treat certain chronic illnesses.  

Pharmaceutical kickback scheme: $30 million 

A New York City pharmacist was indicted for conspiracy to make false healthcare statements and engage in kickbacks. The pharmacist and others allegedly conspired to defraud Medicaid by accepting kickbacks while attempting to cover up their illegal processing of fraudulent claims. 

Fraudulent sleep test claims: $10 million 

A California man was indicted on 12 counts for healthcare fraud and aggravated identity theft. He owned and operated a sleep disorder clinic that performed sleep tests on patients. The owner of the sleep clinic is accused of billing Medicare for tests that were not actually performed, totaling over $10 million in alleged false claims. 

Medicaid transportation scheme: $7.3 million

The U.S. Attorney for the Southern District of New York charged the owner of a transportation company and two state employees with kickbacks, theft of government funds, healthcare fraud, and conspiracy to commit healthcare fraud. According to the indictment, the group pretended to serve low-income patients by providing transportation for medical appointments through a Medicaid program. The charges state that the rides were never actually provided to patients, and in some cases, the group allegedly paid kickbacks to Medicaid enrollees to use their medical information to fraudulently submit a claim. State officials supposedly aided the scheme by referring customers at higher-than-normal rates to the transportation company in exchange for payment. 

Pharmaceutical marketing kickback scheme: $5.5 million 

A pharmacy owner was indicted for healthcare fraud and several kickback violations. The accused allegedly paid kickbacks to multiple pharmaceutical marketing companies for prescription referrals. These supposedly unnecessary prescriptions were filed by his pharmacy and paid for by federal health insurance programs. Medicare, Missouri Medicaid, and Ohio Medicaid paid more than $5.5 million for the prescriptions combined.

Former NBA player benefit scheme: $4 million 

A New York State Court indicted 18 former NBA players with conspiracy to commit healthcare and wire fraud. This group purportedly attempted to defraud $4 million from the NBA’s benefit plan, with claims submitted for services not actually rendered. Based on GPS and flight records, investigators allege that in several instances, the former players were not even at the medical or dental offices the day the claims were submitted. 

Nursing home scandal: $3.6 million

A former nursing home operator and owner was charged with Medicaid fraud for allegedly exaggerating costs to inflate Medicaid payment rates. One of his nursing home facilities was previously also found to be operating an illegal makeshift morgue, where officials found 17 bodies. The owner is also being sued by former employees for allegedly deducting money from their paychecks to cover employee health insurance that was never actually provided. 

Stolen funds for disabled children: $3 million 

Nine therapists in New York have been charged for allegedly stealing over $3 million from state welfare programs. These programs support developmentally delayed children by funding physical, mental, and emotional therapy. According to the court documents, the defendants are being charged with billing the state programs for therapy services that were not rendered. 

Unlicensed techs and healthcare fraud 

Two founders and eighteen employees of a physical therapy practice were charged with healthcare fraud and conspiracy to commit wire and healthcare fraud. According to the court filings, this group used unlicensed technicians to provide patient services, billed excess time for services rendered, used incorrect billing codes, and claimed to use licensed technicians in official documents when unlicensed workers performed services. 

When a fraudulent claim has already been paid, typical postpayment efforts result in only a 5% recovery rate. In contrast, when Cotiviti’s prepay FWA Validation solution verifies a claim as being associated with FWA or error, up to 100% of the incorrect payment is preventable. Read our fact sheet and learn how FWA Validation delivered $41 million in prospective savings to clients over a three-year period.

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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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