As 2024 came to a close, significant cases of fraud, waste, and abuse (FWA) in the healthcare industry continued to emerge, highlighting ongoing challenges within the system. These activities included fraudulent billing, Medicare scams, illegal kickbacks, falsified claims, and other misconduct that frequently jeopardized patient safety. Here’s a summary of some of the most notable cases of FWA from October to December 2024.
Laboratory fraud: $79 million
A Texas laboratory owner has been charged in connection with a $79 million scheme involving fraudulent respiratory pathogen panel tests. The defendant allegedly used a physician's personal information to submit false claims to Medicare and Medicaid for unnecessary tests that were never performed. To conceal the scheme, false claims were made that reference laboratories performed the tests. The proceeds were laundered through international transfers to accounts in various countries.
Adult day care and home healthcare fraud: $68 million
Eight people in Brooklyn have been indicted for their roles in a $68 million Medicaid fraud scheme involving social adult day care centers and a home healthcare intermediary. They allegedly billed for unnecessary or nonexistent services, paying kickbacks to Medicaid recipients and marketers for patient referrals. The fraudulent claims were laundered through businesses to fund more bribes.
Behavioral health fraud: $55 million
Eight people, including a former Arizona Department of Health employee, have been indicted for billing the state’s Medicaid agency for phantom behavioral health services. The indictment alleges they used a variety of businesses to submit fraudulent claims, receiving nearly $55 million in payments. Their actions also resulted in suspended payments to approximately 100 Medicaid providers based on credible allegations of fraud.
Hospice fraud: $54 million
Two Los Angeles residents have been charged in a $54 million Medicare fraud scheme involving false claims for hospice and diagnostic testing services. One allegedly received over $23 million in inappropriate reimbursements, and then attempted to launder the money, using it to purchase things such as $6 million in gold bars and coins, using fake identities. The other is accused of conspiring to control fraudulent providers and launder funds.
Nursing home fraud: $35.6 million
Three people have been accused of orchestrating a fraudulent scheme at a South Jersey nursing home. They allegedly diverted $35.6 million in Medicaid funds between 2018 and 2023 while providing substandard care at the facility. The operators supposedly inflated costs by routing payments through related businesses they controlled, including charging excessive fees for services and medical supplies. The businesses were found to have earned $253 million from nursing homes over the span of five years that the investigators examined, which amounted to 76% of the total Medicaid funds the homes received over that same stretch of time.
DME fraud: >$27 million
A father and son were charged in a scheme involving medically unnecessary prescriptions and durable medical equipment (DME) that defrauded Medicare of at least $27 million. From 2018 to 2019, they allegedly operated companies targeting Medicare beneficiaries, using telemarketing and telemedicine to generate fraudulent prescriptions, often without any patient-doctor interaction. Investigators believe they paid over $6 million in kickbacks and bribes in exchange for fraudulent orders and, in turn, received over $27 million in kickbacks and bribes from third parties for these same fraudulent orders. In addition, they allegedly submitted fraudulent claims directly to Medicare through DME supply companies they owned and controlled, receiving over $1.7 million in payments.
Drug testing fraud: $26.7 million
Four people have been indicted for their roles in a healthcare fraud scheme involving a sober living home in Kentucky. The accused allegedly defrauded Medicare and Kentucky Medicaid by submitting claims for unnecessary urine drug tests and peer support services, totaling $26.7 million in fraudulent billing. The tests were not medically necessary nor ordered by providers, and kickbacks were exchanged for test referrals.
Cancer drug fraud: $17 million
A Michigan doctor has been charged with conspiracy and multiple counts of illegally selling prescription drugs in a scheme involving over $17 million in cancer medications. Between 2019 and 2023, the doctor allegedly misused his medical practice to order cancer drugs, later selling them for profit. The scheme reportedly generated over $2.5 million in personal gains while compromising the integrity of critical prescription drug supplies.
Insurance fraud: $11 million
Seventeen Amtrak employees resigned following an investigation into alleged healthcare fraud, where over $11 million in false claims were submitted between 2019 and 2022 for services that were never provided. The employees, based at New York Penn Station and at an Amtrak base in New Jersey, were involved in a scheme with healthcare providers who paid kickbacks for submitting fraudulent claims using the Amtrak employees’ data. Several of those involved have already been sentenced, including an acupuncturist who received 34 months in prison and ordered to pay $9.05 million in restitution.
Prescription fraud: $8.5 million
The co-owners of a Tennessee pharmacy have been indicted for allegedly forging and altering prescriptions to defraud drug plans and pharmacy benefit managers of over $8.5 million. Between 2017 and 2024, the pharmacy is accused of creating fake prescriptions, forging provider signatures, and manipulating drug formularies to maximize reimbursements. The indictment alleges they hired marketers to promote medications with high reimbursement rates to pain clinics and healthcare providers.
Dental fraud: $900K
A California dentist and five employees have been charged with defrauding the Medi-Cal program of nearly $900,000. Officials say the scheme involved fraudulent billing for dental services, including claiming reimbursement for treatments that were not provided or falsely spread over multiple days. The dentist's clinics, contracted with a federally qualified health center (FQHC), allegedly misused reimbursement policies meant for patient visits. All of those indicted face charges of conspiracy and Medi-Cal fraud.
Looking to reinforce your FWA prevention efforts? Maximize prevention, boost recovery efforts, and enhance operational efficiency with six key capabilities every health plan should incorporate into their FWA programs. Read our new checklist and see how implementing these strategies can be the difference between mitigating risks effectively and leaving vulnerabilities unchecked.
