DME Fraud

Durable Medical Equipment (DME) fraud remains a cornerstone of federal enforcement as seen in the recent takedown. An indictment in the Western District of New York charges a medical doctor with billing roughly $29.6 million for fictious DME and $5.6 million for audio-only telehealth visits, which were brief or never occurred. That doctor produced and maintained false and fictitious medical records and fraudulently certified orders for braces without regard to medical necessity. The doctor now faces federal criminal charges of conspiracy to commit health care fraud, health care fraud, and false statements relating to health care matters.

In “Operation Gold Rush,” prosecutors in the Eastern District of New York indicted 11 defendants, including two pharmacists, members of a transnational criminal organization based in Russia and Eastern Europe. These individuals allegedly orchestrated a massive Medicare fraud and money-laundering scheme that billed over $10.6 billion to federal health programs—making it the largest case by loss amount ever charged by the DOJ. The group used foreign straw owners to acquire dozens of U.S.-based DME suppliers, then submitted fraudulent claims for equipment such as urinary catheters and glucose monitors that never delivered, exploiting stolen identities and confidential patient data. To date, 19 defendants have been charged in the case, including multiple arrests abroad (Estonia) and at U.S. entry points.

COVID-19 Testing Kickbacks

COVID-19 testing kickback schemes typically involve health care providers or marketers billing Medicare for over-the-counter or lab-based COVID-19 tests that were unnecessary, never provided, or obtained through illicit referrals. These cases often rely on the same core tactics as DME fraud: using stolen or misused patient information, paying illegal kickbacks for referrals, and submitting inflated or false claims to federal programs. In both types of fraud, the perpetrators exploit gaps in oversight during high-demand periods—such as the pandemic or public health emergencies—to rapidly bill large amounts to Medicare, often with little or no patient interaction or verification.

These 2025 takedown includes criminal indictments and civil settlement agreements targeting this type of COVID-19 fraud. An indictment out of Illinois charged multiple individuals, including a physician, for their roles in a kickback scheme. According to the indictment, the defendants caused laboratories in Illinois and Texas to submit fraudulent claims to the HRSA COVID-19 Uninsured Program, ultimately receiving over $293 million in payments. The physician involved allegedly misused patient information—including data from a former hospital employer—to falsely claim that uninsured individuals had submitted samples for COVID-19 testing. In reality, many of the patients had not submitted samples at all. Defendants submitted claims through Texas labs they owned, despite those labs being non-operational. The proceeds were then laundered through various financial accounts to disguise the funds’ origin. Charges include wire fraud, conspiracy to commit money laundering, HIPAA violations, and conspiracy to defraud the United States. Authorities have seized a Rolls Royce Phantom and more than $104 million in assets linked to the fraud.

The charges being brought by the federal government in these cases carry significant criminal penalties and collateral consequences, especially for licensed medical professionals. At Conaway & Strickler, we are highly experienced in defending against these types of claims. Contact us to schedule a consultation and discuss your case.

When the federal government is paying for items or services rendered to Medicare or Medicaid beneficiaries, federal fraud and abuse laws apply. Healthcare professionals influence what services patients receive and are responsible for the documentation of those services. That documentation is the basis for bills sent to insurers, and ultimately, the Government’s payment of a beneficiary’s medical claims.

If a physician knew or should have known that the submitted claim was false, the attempt to collect unearned money constitutes a violation. Federal fraud and abuse laws include the following:

• False Claims Act (31 U.S.C. §§ 3729-3733)
• Anti-Kickback Statute (42 U.S.C. §§ 1320a-7b(b))
• Physician Self-Referral (Stark Law).
• Exclusion Statute (42 U.S.C. § 1320a-7).
• Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a).

These laws aim to prevent improper billing practices and financial incentives that could compromise patient care. These laws further grant powerful enforcement tools to federal agencies to penalize violations, ranging from civil fines to criminal charges.

The government can audit claims and investigate providers when there is a reason to suspect fraud. Unusual billing patterns or reports from others, including staff, competitors, and patients, may raise suspicion of fraud and abuse. If you’re a doctor who bills government healthcare programs, compliance with these rules and procedures is critical, as violations can lead to severe legal consequences.

One of the most critical aspects of government payer compliance is coding and billing insurers accurately for services rendered. Physicians may inadvertently engage in practices that violate federal billing regulations. Common billing violations include:

• Upcoding: Billing for more expensive services than those actually provided.
• Unbundling: Separately billing services that are typically bundled together.​
• Unnecessary Services: Providing services that are not medically necessary to increase reimbursement.​
• Kickbacks: Receiving or offering remuneration for patient referrals.
• Billing for services that an improperly supervised or unqualified employee performed.

In addition to maintaining compliance with billing regulations, these laws set forth requirements for maintaining accurate patient records, protecting patient privacy, and more.

Given the complexity and severity of potential penalties, healthcare professionals who find themselves under federal scrutiny for billing practices should seek the counsel of a federal criminal defense attorney as soon as possible. Physicians must be vigilant in adhering to federal billing regulations to avoid severe legal consequences. Understanding the legal framework and implementing proactive measures can safeguard against inadvertent violations and protect your practice’s integrity. Contact us to schedule a consultation.

What is Georgia Medicaid? Medicaid is a “medical assistance program that helps many people who cannot afford medical care pay for some or all of their medical bills. Medicaid is administered by the Georgia Department of Community Health and pays medical bills with state and federal tax money.”

What is Medicaid Fraud?

Medicaid Fraud can come in many different forms – some elaborate and some not so elaborate.

What are some types of fraud?

-Billing for Unnecessary Services or Items -Intentionally billing for unnecessary medical services or items. -Billing for Services or Items Not Provided – Intentionally billing for services or items not provided. -Unbundling Billing for multiple codes for a group of procedures that are covered in a single global billing code. -Upcoding Billing for services at a higher level of complexity than provided. -Card Sharing -Knowingly treating and claiming reimbursement for someone other than the eligible beneficiary. -Collusion – Knowingly collaborating with beneficiaries to file false claims for reimbursement. Kickbacks -Offering, soliciting, or paying for beneficiary referrals for medical services or items. Program Eligibility – Knowingly billing for an ineligible beneficiary

Who prosecutes these cases?

The DOJ’s Health Care Unit. or in Georgia, the Georgia Medical Fraud Division of the Office of the Attorney General

What are some examples of prosecutions?

Opioid prosecutions National Health Care Fraud Enforcement – “The Department of Justice announced today criminal charges against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various health care fraud schemes that resulted in approximately $1.4 billion in alleged losses.”

In the 2019 Operation Brace yourself prosecution press release, the DOJ had a call to action stating, “Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes – including Video Doctor USA, AffordADoc, Web Doctors Plus, Integrated Support Plus and First Care MD should call to report this conduct to the FBI. Nope, call a lawyer first!

Conaway & Strickler, PC has experienced healthcare fraud defense lawyers ready to assist if you receive a subpoena, a “friendly visit by agents”, a request for some patient files, or an interview request from the Medicaid Fraud Control Unit. Contact us to learn more – do not go at this alone.