The following is a summary of selected federal Department of Health and Human Services’ Office of Inspector General (OIG) reports of fraud and abuse enforcement activity across the country.[1]  The enforcement actions reported are based upon federal and individual states’ activity reported by OIG through its listserv on Enforcement Actions.

The summaries reflect areas of OIG’s and individual states’ current and recent enforcement activity.[2] Knowing where regulators’ attention is focused helps health care providers identify areas of attention for compliance and risk assessment activities. Although not all the enforcement actions may be relevant to any one provider’s health care business, there may be some summaries that could be used as examples in compliance program education programs (“What to avoid”), or used in developing a risk management plan. (Note: An Acronym Key appears at the end of the Report.)

Of Note in this Issue:

  1. Nostrum Laboratories and its CEO agree to settle FCA allegations based upon underpaying drug rebates to Medicaid programs. The settlement amount is between $3,825,000 to $50 million if certain financial contingencies are met. (October 31, 2023.)
  2. Physician who received sham speaker fees from Insys in exchange for writing medically unnecessary fentanyl prescriptions settles allegations under the False Claims Act. To date, in addition to Insys, at least 15 doctors, seven former Insys executives and seven former Insys sales representatives have been criminally convicted for their roles in the Insys sham speaker program. (October 30, 2023.) 
  3. Lab agrees to settle allegations that it billed federal health care programs for paying physicians specimen processing fees for tests that physicians referred to the lab. This practice was the subject of a June 25, 2014, OIG Special Fraud Alert warning labs that the practice of paying referring physicians specimen processing fees could present a substantial risk of fraud and abuse. (October 18, 2023.)
  4. Physician and his practice saw a $1.1 million jury verdict for submission of false claims to Medicare grow to more than $27 million by a post-trial order when treble damages and penalties based on 4,400 false claims being submitted to Medicare were included. (October 13, 2023.)
  5. Home care patient sentenced to prison for falsifying timesheets for home care services never provided by family members and for maintaining control of Medicaid proceeds for alleged services by purported aides. (October 5, 2023.)
  6. Cigna settles allegations that include, among other matters, that it used the results of its chart reviews to identify instances where Cigna could seek additional payments from CMS, while improperly failing to use those same results when they provided information about instances where Cigna was overpaid. (October 2, 2023.)

October 31, 2023 OIG Listserv Release

Drugmaker Nostrum and Its CEO Agree to Pay Up to $50 Million to Settle False Claims Act Claims for Underpaying Rebates Owed Under Medicaid Drug Rebate Program

MA. The Defendants are a drug manufacturer and its owner who allegedly violated the FCA by underpaying rebates owed under the Medicaid Drug Rebate Program. Under the Medicaid Drug Rebate Program, drug manufacturers must pay quarterly rebates to state Medicaid programs in exchange for Medicaid’s coverage of the manufacturers’ drugs. The rebates are inflation-based and designed to insulate the Medicaid program from drug price increases that outpace inflation. The Defendants admitted that they temporarily ceased manufacturing the drug Nitro OS which they acquired from another manufacturer and marketed that product under the pre-existing FDA approval. The Defendants also admitted that when manufacturing and marketing resumed, there was no change in its active ingredients and no change in dosage form and strength, so the Defendants continued to market the new version of Nitro OS under the same FDA approval as the prior drug because no major changes were made to the drug. The Defendants admitted that the relaunched Nitro OS price increased from $474.75 to $2,392.32 per bottle, triggering significantly higher Medicaid Drug Rebate invoices from state Medicaid programs, but the Defendants did not pay the entire invoiced amounts, despite learning that larger rebate invoices were tied to the price increase. The Defendants allegedly advised CMS that the new version of Nitro OS was a “new” drug and so rebates were not applicable based on the prior cost. The United States initiated civil claims against the Defendants for knowingly failing to pay the required rebate amounts owned for Nitro OS as required by the Rebate Statute and Rebate Agreement and as invoiced by State Medicaid programs.

The settlement amount was based upon the Defendants’ financial condition and ranged from $3,825,000 to $50 million if certain financial contingencies are met.

October 30, 2023 OIG Listserv Release

Tampa Pain Management Physician Edward Lubin Agrees To Pay $1.5 Million To Settle False Claims Act Liability For Receiving Bribes And Writing Unnecessary Fentanyl Prescriptions

FL. The Defendant is a pain management physician who allegedly received kickbacks in return for causing the submission of claims for fentanyl prescriptions that were medically unnecessary. The kickbacks were allegedly paid by Insys, the manufacturer of Subsys (a fentanyl-spray medication). The alleged kickbacks were disguised as payments for speaking at sham “events” that lasted a few minutes, never occurred, or had repeat attendees despite the lack of any reason to present the same information multiple times.

Insys previously entered into a deferred prosecution agreement after admitting it paid bribes to induce medical practitioners to write increasing amounts of medically unnecessary Subsys prescriptions in exchange for the speakers’ fees.

October 27, 2023 OIG Listserv Release

Attorney General’s Medicaid Fraud and Vulnerable Victims Unit Secures a $932,000 Settlement with Baltimore Medical Supply Company

MD. The Defendant is a medical supply company that allegedly supplied medical supplies that were not requested nor used by Medicaid recipients. A Medicaid recipient reported that her Medicaid number had been billed for incontinence supplies  she did not use or request and that she was not familiar with the Defendant. Additional allegations include that the authorizing physician confirmed he was out of the country when the paperwork supporting the claims was purportedly signed. The investigation revealed this was not an isolated incident and several of the Defendant’s clients and transactions could not be verified. 

Putnam Community Medical Center Of North Florida Agrees To Pay One Million Dollars To Settle False Claims Liability Related To Its Former Sleep Center

FL. The Defendant is a medical center providing diagnostic sleep testing services at its now-closed sleep center. The services were allegedly provided without adequate physician supervision required by Medicare.

The matter was initiated through a Qui Tam action.

Suffolk Man Pleads Guilty to $2M Medicare Fraud

VA. The Defendant and his co-conspirator formed a DME supply company and they obtained the personally identifiable information of Medicare beneficiaries. It is alleged they paid doctors to sign prescriptions for braces the beneficiaries did not need. The Defendant’s DME company allegedly billed Medicare for DME for beneficiaries who had no prior relationship with the doctor who signed the prescription. The investigation started when beneficiaries complained to Medicare they were receiving braces in the mail that they never requested.  

Man Convicted of $55M Fraud Scheme

TX. The Defendant was a medical marketer who allegedly worked with others to create and market expensive compounded medications (custom tailored medications to meet individual patient needs). A local pharmacy designed formulations to maximize TRICARE and other federal health care program reimbursements regardless of patient need or medical efficacy. The Defendant allegedly received illegal kickbacks to recruit area doctors to write prescriptions for the expensive compounded medications. The doctors allegedly were offered “investment opportunities” so the doctors who wrote the prescriptions to the pharmacy could profit from the pharmacy operations. 

October 26, 2023 OIG Listserv Release

Metairie Doctor Pleads Guilty in $5,600,000 Medicare Fraud Scheme

LA. The Defendant was a physician who worked as an independent contractor for several purported telemedicine companies. In those positions, the Defendant allegedly signed doctors’ orders for DME and CGx tests for Medicare beneficiaries that he never saw, spoke to, or otherwise treated. He allegedly made false statements to support the orders, including falsely certifying in medical records and requisition forms, that he was the beneficiaries’ “treating physician”, that he personally examined patients, including performing certain in-person procedures for knee braces, and that he used DME and CGx tests ordered for the management of the patients’ conditions. In exchange for electronically reviewing patient charts and ordering DME and CGx tests, the Defendant was paid a set fee per doctor’s order.  

Psychiatrist Convicted of Billing Medicare and Private Insurance Companies for Services Never Rendered

MA. The Defendant was a psychiatrist who offered transcranial magnetic stimulation (“TMS”) therapy and psychotherapy to patients suffering from depression. The Defendant allegedly billed Medicare and private health insurers for thousands of TMS sessions he never provided, including over 8,000 sessions he claimed were provided to 74 patients who, in fact, never received a single session of the therapy. He also allegedly provided face-to-face psychotherapy sessions during periods of time he was on vacation and not seeing patients, as well as billing for more than 24-hours in a single day. Additionally the Defendant is alleged to have made false statements to patients, the billing company he worked with, and to insurers; and when HHS sought records from the Defendant pertaining to certain claims, he allegedly took steps to conceal its fraudulent conduct by making false representations and creating false documentation to support administration of services he never provided. 

October 24, 2023 OIG Listserv Release

Nurse Practitioner Pleads Guilty to $6.1 Million Health Care Fraud Conspiracy in Idaho

ID. The Defendant was a nurse practitioner who allegedly accepted pre-filled medical orders from companies. She allegedly signed orders without seeing patients or making medically necessary determinations, and she returned signed orders to the companies in exchange for compensation. She was allegedly recruited to work for multiple companies to generate fraudulent medical orders for DME and cancer genomic testing and she received kickbacks for each consult performed with the expectation that a consult would result in a signed medical order. The medical orders signed by the Defendant were allegedly sold and used to fraudulently bill Medicare for DME and tests that were not medically necessary and for which the medical orders were procured through the payment of kickbacks and bribes.

October 23, 2023 OIG Listserv Release

Holy Cross Hospital Agreed to Pay $85,000 for Allegedly Violating Patient Dumping Statute by Failing to Provide an Appropriate Medical Screening Examination

IL. OIG provided a link in its October 23rd listserv to an October 15th report that Holy Cross Hospital allegedly violated the Emergency Medical Treatment and Labor Act (“EMTALA”) when it failed to register a patient presenting at the hospital’s triage area in the ED when accompanied by paramedics and it failed to provide an appropriate medical screening examination to a patient.  It is also alleged that when the patient began exhibiting aggressive behaviors, security officers escorted the patient out of the ED and prevented the patient’s re-entry. Allegations include that, although nursing staff spoke with the patient when he was outside the ED, the ED physicians were not alerted to the patient’s arrival and no assessment of the patient was performed by ED personnel prior to law enforcement personnel removing the patient from the premises. The patient returned to the ED approximately five hours later after suffering cardiac arrest at the patient’s home and the patient died when resuscitation efforts were unsuccessful. 

October 20, 2023 OIG Listserv Release

Attorney General’s Medicaid Fraud Control Unit Leads Effort To Recoup $477,000 In Medicaid, Veterans Overpayments

SD. Defendant is a former board member of an adult day center that allegedly altered billing documents, resulting in overpayments to Medicaid and the SD Department of Veterans Affairs.

AG Campbell Announces More Than $2.5 Million In Fraud Settlements With Two Autism Services Providers

MA. Defendants are two different applied behavioral analysis providers that allegedly billed Medicaid for services that were not provided by individuals with the appropriate credentials for the service provided; services were billed that were not provided or were not properly documented; and for failure to properly supervise the paraprofessional staff that provided the alleged care.

The Defendants, in settling the allegations, agreed to a three-year independent compliance monitoring program at their own expense.


IL. Defendants were the owner and a biller for a DME company that allegedly supplied various supplies, including medical supplies for diabetes patients. The Defendants allegedly submitted fraudulent claims to Medicaid for diabetic supplies that were not provided and for billing for more boxes of continuous glucose monitor sensors than patients were actually prescribed.   

October 19, 2023 OIG Listserv Release

Jena Medical Group, LLC, Its Principals And Physician Agree To Pay Over $1.7 Million To Settle False Claims Act Liability For Improperly Performed Procedures

FL. Defendants Jena Medical and its principals, through a physician, allegedly billed Medicare and TRICARE for radiofrequency ablations that were not medically necessary, not provided by a qualified provider, or both. The allegations were that the patients referred to the unqualified technician as “doctor’ and were led to believe he was qualified to perform the procedures. The facility also permitted the washing and re-use of catheters that were designed for a single use.

The matter was initiated through a Qui Tam action.   

Silicon Valley Executive Sentenced for Defrauding Investors and Participating in COVID-19 and Allergy Testing Scheme

CA. Defendant was the president of a medical technology company that allegedly submitted fraudulent claims to Medicare and private insurance for unnecessary allergy testing. The alleged allergy testing involved testing 120 different allergens for every patient, regardless of medical necessity. The Defendant allegedly obtained blood specimens through payment of kickbacks to marketers in violation of the Eliminating Kickbacks in Recovery Act and orchestrated a deceptive marketing plan that falsely claimed the tests were highly accurate in diagnosing allergies when it was not a diagnostic test. The Defendant’s company billed more per patient to Medicare for blood-based allergy testing than any other lab in the United States.

Outside the scope of this summary are matters related to fraudulent COVID-19 tests, matters involving the Food & Drug Administration (FDA), and matters enforced by the Securities & Exchange Commission (SEC).

October 18, 2023 OIG Listserv Release

Exagen Inc. Agrees to Pay $653,143 to Resolve Allegations of Kickback Violations

MA. Defendant is a life sciences company that makes diagnostic tests for treatment of autoimmune conditions. The Defendant allegedly paid certain referring physicians to complete blood draws for patients under specimen processing agreements between the Defendant and the physicians, and then Defendant billed federal health care programs for the tests after receiving orders from the physicians from who it paid the specimen processing fees. The Defendant was allegedly aware of a June 25, 2014, OIG Special Fraud Alert that warned laboratories the practice of paying referring physicians specimen processing fees could present a substantial risk of fraud and abuse.

The matter was initiated through a Qui Tam action.  

Floyd County Company Agrees to Pay $200,000 to Resolve Allegations of Fraudulent Billing for Respiratory Devices

KY. Defendant is a DME provider that allegedly violated the FCA when it billed Medicare and Medicaid for Non-Invasive Ventilators (“NIVs”) for home use to patients. Allegations include that the Defendant submitted false claims to Medicare and Medicaid for monthly reimbursement for the NIVs even after patients no longer needed or no longer used the NIVs.

The matter was initiated through a Qui Tam action.  

October 16, 2023 OIG Listserv Release

Compounding pharmacy owner sentenced to 18 months and over $6 million in restitution.

OK. Defendant was an owner of two pharmacies that allegedly paid kickbacks to physicians to induce referrals for compounding prescriptions to one of his two pharmacies. It is alleged that the kickbacks were paid to physicians through bank accounts controlled by the Defendant and the Defendant knew some of the prescriptions were being paid by federal health care programs. It is also alleged that physicians were provided pre-printed prescription pads that listed compounding formula choices which the participating physicians ordered by checking a box with their preferred selection, which were then faxed to the associated pharmacy. The Defendant allegedly disguised payments to physicians through sham business arrangements that included agreements with physicians to serve as medical directors, but the physicians allegedly did not provide medical director services. Additional allegations include that some medications were ordered whether the physicians’ patients needed them or not.   

Former Nursing Home Worker Charged With Wire Fraud In “Ghost” Employee Fraud Scheme

IL. Defendant was a nursing home employee who allegedly falsified records to generate payments to “ghost employees” (individuals who never worked at the facility). The Defendant allegedly identified the ghost employees as Certified Nursing Assistants, logged false hours for the ghost employees, causing the nursing home to issue paychecks. Some ghost employees cashed the paychecks and share proceeds with the Defendant, while on other occasions, the Defendant forged endorsement signatures and deposited the paychecks into her own accounts.  

October 13, 2023 OIG Listserv Release


FL. Defendants operated a nonemergency medical transportation service that allegedly billed Medicaid for trips that were never provided and inflated the mileage for trips actually completed.  It is alleged that transportation was provided when the drivers were actually at home, on vacation or traveling out of state.

Georgia doctor ordered to pay $27 million for submitting false claims to Medicare

GA. Defendants are a physician and his medical practice who allegedly violated the FCA by submitting false claims to Medicare for chelation therapy reimbursements for patient conditions that the therapy was not recognized by the FDA to treat. The Defendants allegedly misrepresented that Medicare patients suffered from heavy metal poisoning, which the FDA recognized as treatable by the chelation therapy. The Defendants were actually treating patients for a variety of conditions not recognized as treatable by the billed treatment. The jury found that Medicare reimbursed the Defendants $1.1 million for unnecessary treatments, but in a post-trial ruling the judge added treble damages to the jury’s verdict and added penalties based on the 4,400 false claims submitted, bringing the total owed to more than $27 million.

California man sentenced to federal prison for role in health care kickback conspiracy

TX. Defendant allegedly conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests. The test is a genetic test that identifies genetic variations affecting how an individual patient metabolizes certain drugs. The OIG announcement also comments on 12 individuals from three states who were also charged with roles in the kickback conspiracy.  

October 11, 2023 OIG Listserv Release

New York Man Admits Role in $127 Million Health Care Fraud and Kickback Scheme

NJ. Defendants, owner and his marketing company, allegedly identified Medicare and TRICARE beneficiaries to target for DME by calling them and pressuring them to agree to accept DME (frequently back, shoulder and knee braces). The Defendant allegedly paid the company’s employees commissions, bonuses and incentives to encourage them to convince beneficiaries to accept DME regardless of medical necessity. The Defendant and his company allegedly paid kickbacks to telemedicine companies that paid kickbacks to doctors to obtain the doctors’ orders for DME. The doctors allegedly signed the orders regardless of medical necessity and often without ever speaking to the patients. The Defendants allegedly steered the signed orders to DME companies they had kickback arrangements with, and the DME companies submitted claims to Medicare and TRICARE. The DME companies allegedly sent a portion of the proceeds to the Defendants as payment for the doctors’ orders generated.

Mobile Cardiac PET Scan Provider and Founder to Pay $85 Million to Resolve Allegedly Unlawful Payments to Referring Doctors

Cardiac imaging company and founder to pay historic $85M settlement

DOJ and TX. Defendants, cardiac imaging provider and its owner, allegedly knowingly caused false and fraudulent claims to federal health care programs arising from violations of the AKS and Stark law, when the Defendant allegedly paid kickbacks to referring cardiologists in the form of above-fair market value fees for the cardiologists to supervise the PET scans for patients they referred to the Defendant. It is alleged that the fees of $500 or more per hour substantially exceeded fair market value because the time being charged included time not actually supervising the PET scans. The consultant used by the Defendants to justify the fair market valuations ultimately withdrew and the Defendant allegedly knew the valuations were based on fundamental inaccuracies.

The Defendants entered into a five-year Corporate Integrity Agreement.

The matter was initiated by a Qui Tam action. 

Man Convicted in $67M “Doctor Chase” Genetic Testing Fraud Scheme

DOJ. Defendant allegedly managed a call center that engaged in deceptive telemarketing calls targeting Medicare beneficiaries and their physicians. The “Doctor Chase” division of the Defendant’s call center allegedly contacted Medicare beneficiaries’ primary care physicians and tricked the medical providers into ordering and authorizing medically unnecessary genetic tests based on medical paperwork that the call center created, which included medical conditions justifying genetic testing, when neither statement was true. The Defendant and his co-conspirators allegedly used the doctors’ authorizations to submit claims to Medicare for the expensive and unnecessary genetic tests in labs that were shells with no equipment, which did not conduct any tests, and did not have any lab personnel. Genetic tests were allegedly referred to other labs which conducted the tests at a fraction of the cost billed by the Defendant to Medicare and after the tests were conducted, the results were often not sent to the Medicare beneficiaries’ primary care physicians or used in the beneficiaries’ treatment. 

October 10, 2023 OIG Listserv Release

Telemedicine Nurse Practitioner Charged with $7.8 Million Durable Medical Equipment Fraud Scheme

MA. Defendant is a nurse practitioner who allegedly worked at a telemedicine company and signed orders for medically unnecessary DME. The orders signed by the Defendant allegedly were pre-populated based on telemarketing calls made to Medicare beneficiaries, the Defendant did not have any contact with the patients, had no medical relationship with the patients, and she generally signed the orders without even reading them. It is alleged that once the Defendant signed the orders, the telemarketing company sold the orders to DME suppliers and laboratories that then submitted the claims to Medicare for medically unnecessary DME based on false documentation and tainted by kickbacks. 

October 6, 2023 OIG Listserv Release

Attorney General James Sues Fresenius Vascular Care for Subjecting Vulnerable Patients to Unnecessary Surgeries

AG Platkin Sues Fresenius Vascular Care After Vulnerable Kidney Dialysis Patients Are Allegedly Subjected to Unnecessary Surgeries in Fraud Scheme

NY, NJ, GA. Defendants are Fresenius Vascular Care, Inc. (FVC), one of its New York-based executives, and several affiliates. They allegedly subjected Medicaid recipients with end-stage renal disease (ESRD) to unnecessary surgeries and for defrauded the New York, New Jersey, and Georgia Medicaid programs. The Defendants allegedly scheduled ESRD patients for appointments every three to four months, purportedly to preserve their dialysis access sites. At the appointments, the Defendants sedated the patients and performed invasive procedures on their veins and arteries to perform the dialysis, when many patients did not require the procedures in order to get dialysis. It is alleged the Defendants knowingly subjected ESRD patients to unnecessary and invasive procedures to increase its revenues, allegedly falsified patient referrals, ignored relevant medical records, and falsified diagnostic reports to justify billing for repeated diagnostic and surgical procedures. Violations of the FCA and the three states’ other laws are alleged in the federal case filed jointly in Brooklyn.

The matter was initiated by a Qui Tam action. 

Imperial County Dentist and Former Office Manager Plead Guilty in Multi-Million Dollar Medicare Fraud

CA. Defendants are a dentist and his office manager, who allegedly billed Medicare for dental procedures that were not covered, not performed, or otherwise not necessary. The allegations involve the dentist recruiting Medicare beneficiaries to get dental work at one of his offices by misrepresenting that Medicare covers dental services. The dentist performed a procedure (usually tooth extraction) and submitted false claims to Medicare, using the person’s Medicare number, and submitted claims that misrepresented the procedures (like bone grafts) that were never performed. The Defendants also allegedly caused false documents to be submitted to a federal Medicare auditor to conceal the fraud. 

Brockton-Based Mental Health Provider Agrees To $700,000 Settlement To Resolve MassHealth Fraud Allegations – Luminosity Behavioral Health Services Allegedly Billed MassHealth for Higher Levels of Services than It Actually Provided

MA. Defendant is a mental health provider that allegedly billed MassHealth for higher levels of services than it actually provided, and billed MassHealth using an additional code that was not applicable to the services it rendered. The billing codes allegedly overstated the length, extent and scope of services it furnished to MassHealth members and falsely inflated the amount of payment claims for the services. An additional allegation alleges the Defendant knowingly submitted claims for services using a billing code for services that did not meet the description for that code.

The Defendant agreed to a three-year independent compliance monitoring program.

Husband and wife sent to prison for $8M health care fraud

TX. Defendants allegedly co-owned a home care agency that obtained patient referrals by paying kickbacks to marketers and patients, and bribing physicians to authorize medically unnecessary home health services for their agency’s patients. One Defendant admitted to billing Medicare for fraudulent claims for home care services. The other Defendant was the Chief Financial Officer, and he admitted to filing a fraudulent cost report to Medicare in an attempt to disguise the kickback payments as legitimate business expenses. 

Pharmacy Owner Pleads Guilty to $25M Health Care Fraud Scheme

NY. Defendant allegedly was a part owner of a pharmacy that conspired to refer Medicare and Medicaid beneficiaries to medical practices that prescribed medically unnecessary topical medications and pain patches, which were then billed to Medicare and Medicaid. In return for writing medically unnecessary prescriptions, the Defendant allegedly paid the medical practices kickbacks and bribes in the form of rent and office staff. 

Woman Pleads Guilty to $359M Fraud Involving Claims for Unnecessary Respiratory Tests Submitted with COVID-19 Tests

CA. Defendant allegedly conspired to obtain nasal swab specimens ordered from residents and staff at nursing homes, assisted living facilities, rehabilitation facilities and students and staff at primary and secondary schools for the purported purpose of conducting screening tests for COVID-19 infection and then, in addition to performing COVID-19 testing, the Defendant allegedly used the specimens to conduct medically unnecessary respiratory pathogen panel (RPP) tests. The medically unnecessary RPP tests were submitted to Medicare and a private health insurance company for reimbursement.

October 5, 2023 OIG Listserv Release

Chesterfield Woman Sentenced for Defrauding Medicaid of More than $200,000

VA. Defendant allegedly fraudulently billed Medicaid when she claimed two family members were providing home health care to her and two other Medicaid recipients when they were not providing home care, and she knowingly submitted fraudulent timesheets to Medicaid. The Defendant also allegedly opened joint bank accounts with two purported aides, but maintained exclusive control over the bank accounts and, as a result, exclusive control over the funds received in the scheme. Following pleading guilty and while on pretrial release, the Defendant allegedly deposited two fraudulent checks and withdrew funds the bank credited to her account, and she was determined by the court to be in violation of the terms of her pretrial release and she was ordered held in prison pending sentencing. 

October 4, 2023 OIG Listserv Release

Owners of Mobile Phlebotomy Company Each Sentenced to 15 Months in Prison for Medicare Fraud

CA. Defendants allegedly ran a mobile phlebotomy company that provided phlebotomy and other medical collection services at patients’ homes and long-term care facilities. They allegedly agreed to bill Medicare for services provided that were not reimbursable by Medicare. They allegedly also agreed to bill Medicare for overstated mileage for their phlebotomists. Medicare payments were suspended for the Defendants’ company, but the Defendants allegedly represented to Medicare that the services provided to Medicare patients were done by another company when they were in fact being provided by the suspended company.  The second company allegedly billed Medicare for a non-reimbursable service, misrepresenting that it was for another reimbursable service and overstating the mileage traveled.

Convicted lab owner ordered to forfeit over $187 million in health care fraud proceeds

FL. Defendant owned a Medicare enrolled lab that performed sophisticated genetic tests. He conspired with patient brokers, telemedicine companies and call centers to target Medicare beneficiaries with telemarketing calls falsely stating that Medicare covered expensive cancer genetic tests. When beneficiaries agreed to take a test, the Defendant allegedly paid kickbacks and bribes to patient brokers to obtain from telemedicine companies signed doctors’ orders authorizing the tests and to conceal the kickbacks and bribes. The Defendant allegedly required patient brokers to sign sham contracts that falsely represented the brokers were performing legitimate advertising services for the Defendant’s lab. The Defendant also allegedly knew the brokers were deceptively marketing to beneficiaries and paying kickbacks and bribes to telemedicine companies for the prescriptions, and he allegedly knew the telemedicine doctors robo-signed prescriptions for the expensive genetic tests even though they were not treating the beneficiaries, often did not speak with them and made no evaluation of medical necessity.

Not addressed in this summary are the money laundering allegations. 

Three Individuals Convicted in $93M Home Health Fraud and Money Laundering Scheme

FL. Defendants allegedly conspired to recruit individuals from Cuba to sign Medicare enrollment documents and appear as the owners of home health agencies to conceal the identities of the Defendants and others involved in the scheme. The Defendants allegedly used the home health companies to submit fraudulent claims for services that were not rendered, using lists of stolen patient identities.

Not addressed in this summary are the money laundering allegations. 

October 3, 2023 OIG Listserv Release

Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations

PA. See article below from October 2, 2023:  Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations

South Carolina Physician and Nephrology Practice Agree to Pay Over $585,000 to Settle Laboratory Kickback Allegations

SC. See article below from October 2, 2023:  South Carolina Physician and Nephrology Practice Agree to Pay Over $585,000 to Settle Laboratory Kickback Allegations

United States Settles Kickback Allegations with BioTek reMEDys Inc., Chaitanya Gadde and Dr. David Tabby

DE. The Defendants are a specialty pharmacy and its CEO that allegedly routinely waived Medicare and TRICARE beneficiaries’ copayments to induce purchase of its drugs and services in violation of the AKS. Additional allegations involve the Defendant-pharmacy’s payments to physicians in the form of gifts, dinners and free administrative and clinical support services to induce the physicians to referral patients to Defendant-pharmacy.

The action was commenced through a Qui Tam action. 

Genomic Health Inc. Agrees to Pay $32.5 Million to Resolve Allegations Relating to the Submission of False Claims for Genetic Cancer Screening Tests

CA. The Defendant provides genomic-based clinical diagnostic tests and allegedly violated the FCA by improperly billing Medicare for certain lab tests used to diagnose and treat cancer patients.  Allegations include that the Defendant perpetrated a scheme to evade Medicaid’s 14-Day Rule, which prohibited laboratories from separately billing Medicare for covered tests ordered within 14 days of the patient’s discharge from an inpatient hospital stay or from an outpatient setting. The  Defendant allegedly improperly manipulated the 14-Day Rule by submitting separate claims for tests within the 14-day period when those tests should have been covered as part of the DRG payment to the hospital for an inpatient stay. This was done by submitting separate claims for tests performed within 14 days of a beneficiary’s outpatient procedure when those tests should have been billed to the hospital; conspiring with and encouraging hospitals and physicians to cancel and reorder tests; failing to discourage providers who ordered tests within 14 days from canceling and reordering the tests after the 14-day period elapsed; and by failing to send timely invoices to hospitals for lab services that fell under the 14-Day Rule and instead wrote-off the unpaid fees for lab services in violation of the AKS.

The matter was initiated by two separate Qui Tam actions. 

October 2, 2023 OIG Listserv Release

Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations

DOJ. The Defendant agreed to resolve allegations that it violated the FCA when it submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage enrollees.  The effect of this was to increase the Defendant’s Medicare payments. The Defendant’s monthly capitation payments (fixed monthly payments for each covered beneficiary) is adjusted (up or down) to account for various risk factors of its enrollees which addresses expected health expenditures for beneficiaries. Adjustment of the capitation payments is based upon information CMS received from Defendant, who failed to withdraw the inaccurate and untruthful diagnosis data and repay CMS. The Defendant also allegedly falsely certified to CMS that the data was accurate and truthful. Among the allegations, the Defendant’s “chart review” process allegedly identified underpayments and sought increases in its capitation payments from CMS, while not always seeking reductions in its capitation payments when the “chart review” process identified possible overpayments.

Some of the allegations resulted from the commencement of a Qui Tam action.

CIGNA entered into a 5-year Corporate Integrity Agreement that was effective on September 29, 2023. 

Related matter

United States Reaches $37 Million Settlement Of Fraud Lawsuit Against Cigna For Submitting False And Invalid Diagnosis Codes To Artificially Inflate Its Medicare Advantage Payments

NY. The Defendant, a Medicare Advantage plan, admitted and accepted responsibility for allegations that its “360 comprehensive assessment” program (“360 Program”) used vendors who employed licensed health care providers to conduct assessment of Medicare Part C members in their homes who were required to use standardized forms provided by Defendant, but in many cases were not permitted to provide treatment or prescriptions for medications. Defendant’s medical coding team reviewed completed 360 Program forms and identified diagnosis codes that corresponded to medical conditions checked off on the forms, which were then submitted by Defendant to CMS as risk adjustment data; Defendant traced the volume and nature of diagnoses generated by vendors’ home visits and tracked how the diagnoses affected risk-adjusted payments; and CIGNA did not require 360 Program vendors conducting in-home assessments to have the necessary equipment available to conduct lab tests, imaging or other diagnostic testing in order to diagnose some of the conditions being coded. Additional allegations that were settled involve the Defendant’s submission to CMS of risk-adjusting diagnosis codes under the 360 Program that had not been previously reported to CMS by the Defendant from any other encounter with a health care provider during the year in which the home visit occurred; and that many 360 Program vendors’ in-home assessments did not include clinical information that corroborated the diagnoses reported by the Defendant to CMS to support that diagnostic testing necessary to make the diagnosis for the first time was performed. 

Behavioral Services Healthcare Provider and its Owner Settle False Claims Act Allegations

VA. The Defendants allegedly submitted claims to TRICARE and Medicaid for applied behavioral analysis services that were not provided.

The matter was initiated through a Qui Tam action.

Defendant Connex entered into a three-year Integrity Agreement.

South Carolina Physician and Nephrology Practice Agree to Pay Over $585,000 to Settle Laboratory Kickback Allegations

DOJ. The Defendants are a physician and his medical practice who agreed to cooperate with DOJ investigations and litigation against other participants in alleged kickback schemes, and to make a payment to resolve FCA allegations that they received kickbacks for referrals for lab tests. The Defendant-physician allegedly received kickbacks disguised as purported office space rental and phlebotomy payments, and remuneration from a marketing company disguised as consulting and medical director payments, in return for ordering clinical lab services from five laboratories. Both Defendants also allegedly received remuneration from a clinical laboratory in the form of free clinical staff to provide services to the physician’s practice unrelated to the laboratory, in return for the physician’s referrals for lab testing. 


No new matters posted in October.


AG = Attorney General
AKS = Anti-Kickback Statute
CIA = Corporate Integrity Agreement
CMP = Civil Monetary Penalties
CMS = Centers for Medicare and Medicaid Services
CPT = Current Procedural Terminology Codes            
DOJ = United States Department of Justice
DME = Durable Medical Equipment
E&M = Evaluation & Management services
FEHBP = Federal Employees Health Benefits Program
FMV = Fair Market Value
DOJ = United States Department of Justice
FCA = False Claims Act
FWA = Fraud, Waste & Abuse
HHS = Department of Health and Human Services
HRSA = HHS’s Health Resources and Services Administration
IA = Integrity Agreement
LTC = Long Term Care (usually facilities)
MCO = Managed Care Organization (typically Medicaid)
MFCU = Medicaid Fraud Control Unit
MSO = Management Services Organization
NH = Nursing Home
NPI = National Provider Identifier
OIG = Office of Inspector General in HHS
OT = Occupational Therapy
PBM = Pharmacy Benefit Managers
PT = Physical Therapy
SNF = Skilled Nursing Facility

[1] Not included in the summaries are prosecutions related solely to drug diversion and inappropriate prescriptions, patient fiscal or physical abuse, or non-health care related matters such as money laundering as a specific allegation that may be in conjunction with an alleged fraud or misuse of COVID-19 relief funds. The summaries also do not include enforcement announcements of arrests with no report of an indictment or civil complaint or announcements related to sentencing following a conviction or guilty plea.

[2] The summaries should be considered to reflect allegations and not necessarily be considered to be statements of fact.