Medical supply companies banned in $3.4B fraud takedown

The CMS has banned 11 medical supply companies from billing Medicare Advantage and Part D, including four that had already been barred from Traditional Medicare, after identifying more than $3.4 billion in alleged fraudulent billing practices over the last two years.

The unnamed companies will not be able to receive future payments because the CMS claimed they never submitted claims prior to 2025, engaged in potential improper medical billing, billed for medical equipment furnished to deceased beneficiaries and/or supplied equipment to beneficiaries who never requested or received it.

The CMS credited partnerships with the White House Anti-Fraud Task Force and the HHS Office of the Inspector General for the successful crackdown. The agency used a multipronged strategy, including data analytics, payment safeguards, enrollment authorities and the Preclusion List, an official database of healthcare providers, suppliers and prescribers who cannot receive payment for MA and Part D services.

"Brazen scams like these have plagued Medicare for decades, but under President Trump's leadership and working with the White House Anti-Fraud Task Force, CMS is protecting the Medicare Trust Funds and its beneficiaries by using advanced data analytics to identify fraud networks and stop suspicious payments before the check clears," CMS Administrator Dr. Mehmet Oz said in a statement on Tuesday.

The Trump administration has prioritized rooting out healthcare fraud, waste and abuse, launching the Anti-Fraud Task Force in March. The task force seeks to eliminate fraud in federal benefit programs, including Medicare and Medicare Advantage.

The HHS has also targeted fraud, waste and abuse within its health programs, reporting in July that it has generated $5.56 billion in total monetary impact between October and March of this year.

The HHS' oversight office also reported barring over 1,200 people and entities from federal health programs during that time.

According to the CMS, healthcare fraud, waste and abuse has been common among companies selling durable medical equipment, prosthetics, orthotics and supplies, also known as DEMPOS.

To combat improper practices, the agency had recently stopped enrolling new companies in Medicare as part of a six-month moratorium that expired on Aug. 27. The agency has also suspended enrollment of new Medicare hospice and home health providers, citing similar concerns about improper billing practices.

The CMS said in its most recent announcement that it will continue working with the Office of the Inspector General and other program integrity partners to identify suspicious billing. The agency has also sought long-term systemic reforms to protect taxpayer money, including stricter provider enrollment and scrutiny of all provider types as detailed in a proposed rule issued in July.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy and health IT since 2016.