Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.


It is everywhere; mortgage applications and loans, credit cards, you name it.  If there is money tied to a transaction, there is fraud.  In most instances, fraud to a limited extent angers and frustrates the American consumer to a point where if there is a charge on your credit card that is incorrect, we all call and get it removed and lodge the complaint.  The dichotomy exists, however, when it comes to healthcare fraud.  Yes, we are all angry about hearing that the cost of healthcare is rising, and the level of care is being reduced, but why is it that not as much as can be done is actually done?

Let’s take an example of the last criminal case that I investigated before I retired from HHS-OIG (I was a Special Agent in the NY/NJ area for 22 years).  The case involved an individual who operated a sham not-for-profit, and used his false charity to get in front of senior citizens in their fixed-income buildings, under the guise of discussing all of the local, state and federal programs available to them, at, of course, “free, little or no cost” to them.  Now everyone in the fraud, waste and abuse (FWA) world knows that under the Medicare program, a service may never be touted as “free.”  In this matter, however, the individual who operated the sham charity was actually a sales representative, at first, as a Medicare Advantage broker, and later, as a 1099 (independent sales representative) for two different genetic testing companies.

Without going into too much detail, this individual would conduct an “ice cream social,” where he would gloss over the local, state and federal programs he researched on the internet, but really wanted to discuss the need for the genetic test. Talking about the potential of adverse affects, he convinced hundreds of senior citizens to let him swab their cheek to get the required DNA for testing.  All the while, the local, state and federal programs were well known to many of the seniors, the building social workers and county social service staff.  The sales representative in question did not even work with the seniors to complete the applications (when, in the small number of instances, he actually provided the applications), and left it up to the seniors themselves to complete, submit and try to get the “free, little or no cost” services this individual discussed at the talks.  

Many of the seniors subsequently received their Explanation of  Medicare Benefits (EOMB) forms in the mail, showing what the Medicare program was billed, and ultimately paid (it usually hovered around $900 for the test, and billed at over $2,000).  Since generally speaking, laboratory testing is covered at the full allowed amount under the Medicare fee schedule, most of the time, the Medicare beneficiaries did not receive any bills for copays.  As such, for the most part, “it was free, so why do I care” was the answer that I received when I interviewed beneficiaries in the investigation.  But for the luck of a few beneficiaries and astute social service staff, I am not sure how long this fraud would have gone undiscovered.  The sales representative paid nurse practitioners and medical doctors on a “per chart” review basis to sign a requisition authorizing the test.  The Medicare beneficiaries never met, spoke with or knew the authorizing provider.  

My point (a bit drawn out–par for the course if you know me) is that we all get enraged when something is financial in nature and directly hits our bottom line.  Unfortunately, we do not feel the same way about our healthcare costs.  Interestingly enough, the copayment requirement in the Medicare program should make the Medicare population feel like there is some “skin in the game.”  With secondary insurance, the fraudulent routine waiver of copayments, the complexities of billing and coding (not to mention the difficulty in reading, understanding and interpreting an EOMB or, even worse, the resulting documents from a hospital stay) it is no wonder most of us just throw our hands up and say “it doesn’t cost me anything, so why do I care.”

As an aside, I started investigating the case discussed above in 2014.  It was resolved in May 2019, with three individuals being sentenced for the fraud (so far).  HHS-OIG just published a Fraud Alert specifically addressing, among other things related to genetic testing fraud, the very scenario I described above; five years later.   

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.