CMS Cracks Down on Massive $3.4 Billion Medical Equipment Supplier Fraud Scheme

CMS Cracks Down on Massive $3.4 Billion Medical Equipment Supplier Fraud Scheme

Companies Billed Medicare for Deceased Beneficiaries

As part of the White House Anti-Fraud Task Force's ongoing efforts to crush fraud in the healthcare system and protect taxpayer dollars, the Centers for Medicare & Medicaid Services (CMS) has identified and is barring 11 medical supply companies with more than $3.4 billion in suspected fraudulent billing practices in 2025 and 2026 from receiving future Medicare Advantage (MA) Part C and Part D payments. These 11 durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers, (1) had submitted no claims prior to 2025; (2) used improper billing practices for their claims; (3) had billed for medical equipment to beneficiaries already deceased; and (4) supplied equipment to beneficiaries who never requested or received it. Four of the suppliers had already been revoked from Original Medicare and began billing Medicare Advantage plans instead.

"Fraudsters who take advantage of the recently deceased to line their pockets represent a level of indecency that we will not stand for," said CMS Administrator Dr. Mehmet Oz. "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."

Working in coordination with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), CMS is ensuring the suppliers will no longer receive payments for healthcare items, services, or drugs, furnished, ordered or prescribed to Medicare beneficiaries and paid for by MA and Part D sponsors. The placement of the 11 suppliers on the CMS Preclusion List was made after it was determined that their conduct was detrimental to the best interests of the Medicare program.

The enforcement actions demonstrate how CMS is using multiple enforcement tools at its disposal-including data analytics, payment safeguards, enrollment authorities, and the Preclusion List-to identify suspicious activity, stop questionable payments before they leave the agency, and prevent bad actors from continuing to profit from Medicare.

All 11 DMEPOS suppliers billed Medicare for multiple beneficiaries who were deceased. In two particularly egregious cases, suppliers submitted nearly $24 million in claims-payments CMS stopped from reaching the suppliers by using its original Medicare payment-suspension authority:

• One Florida-based provider submitted approximately $18.4 million in catheter claims over two consecutive days - $6.1 million for 500 beneficiaries on December 15, 2025, followed by $12.3 million for 777 beneficiaries the next day. CMS' payment-suspension authority prevented those payments from reaching the supplier.
• A Texas-based company submitted approximately $5.5 million in orthotics claims, with CMS similarly suspending payments before they reached the supplier. Investigators interviewed six beneficiaries who said they did not know the ordering providers, had never heard of the company, and did not need the orthotics. CMS also identified claims for nine beneficiaries with dates of service after their deaths and determined the supplier was not operational at its reported location.

Additional examples of suspected fraudulent behavior uncovered by CMS include:

• A New Jersey-based firm was placed on the Preclusion List after billing a Medicare Advantage plan for 38 separate encounters in which the beneficiary was already deceased on the reported date of service. The investigation into the supplier also included member complaints that they did not know the providers involved and had never requested or needed the DME equipment provided.
• A Florida-based company suspected of participating in a DME telemarketing scheme involving the oversupply of medical equipment. Several beneficiaries reported they did not receive braces for which the company billed and were not familiar with the supplier.

CMS will continue working with HHS-OIG and other program integrity partners to identify suspicious billing, protect beneficiaries, safeguard the Medicare Trust Fund, and ensure Medicare dollars support legitimate healthcare, not fraud.

More information on the Preclusion List is available at: www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chain-ownership-system-pecos/preclusion-list .

To learn more about how CMS is crushing fraud, visit: https://www.cms.gov/fraud .

To learn more about how HHS-OIG is cracking down on DME fraud to protect Medicare and Medicaid dollars, visit: https://oig.hhs.gov/reports/featured/dme-feature/

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