$2 Billion (with a "B") Healthcare Fraud Scheme Alleged by CMS & FBI

From Becker's Hospital Review (Feb. 13, 2024): The FBI and CMS are investigating an alleged fraud scheme. The scheme ran for two years and involves 406,000 patients and seven firms in Connecticut, Florida, Kentucky, New York and Texas. The government is looking into the possibility that the scheme cost the Medicare program $2 billion. 

The scheme is described in a report by the National Association of ACOs (NAACOS), whose president, Clif Gaus, is quoted in the report. More from Becker's:

In all cases, the companies were sold to new owners before the steep increase in catheter purchases. Some of the companies obtained Medicare accreditation under the name of a person who said they no longer worked there, the report said. 

None of the companies have been major players in the intermittent urinary catheter field, but collectively they are responsible for a national spike in urinary catheter claims, the report said. The NAACOS did not find any evidence that the patients wanted or received catheters. 

Mr. Gaus said he was concerned the companies behind the alleged fraud were using real patients' data to order medical products, suggesting several possible sources, including healthcare records and consumer data.

"Where do you get half a million [Medicare] beneficiary names and ID numbers?" Mr. Gaus said in the report. "There has to be a breach somewhere in the healthcare system."

Urinary catheters are an appealing target for scammers; they are low-cost products with high Medicare payout margins. The orders can escape scrutiny when they accompany billing for more expensive equipment or procedures.