2 years, $2B in allegedly fraudulent catheter orders

CMS and the FBI are investigating an alleged catheter fraud scheme that is estimated to have cost Medicare about $2 billion in two years, The Washington Post reported Feb. 9.

Over two years, seven companies involved in the alleged scheme have collectively gone from billing Medicare for catheters for 14 patients to nearly 406,000 patients. Medicare is estimated to have been wrongly billed for $2 billion in 2022 and 2023, the report said.

The alleged scheme was uncovered by the National Association of ACOs, a healthcare nonprofit that represents hundreds of medical groups and hospitals. 

"We've just never seen anything like this nationally," Clif Gaus, CEO of the organization, told the Post.

The seven companies operate out of Connecticut, Florida, Kentucky, New York and Texas. In all cases, the companies were sold to new owners before the steep increase in catheter purchases. Some of the companies obtained Medicare accreditation under the name of a person who said they no longer worked there, the report said. 

None of the companies have been major players in the intermittent urinary catheter field, but collectively they are responsible for a national spike in urinary catheter claims, the report said. The NAACOS did not find any evidence that the patients wanted or received catheters. 

Mr. Gaus said he was concerned the companies behind the alleged fraud were using real patients' data to order medical products, suggesting several possible sources, including healthcare records and consumer data.

"Where do you get half a million [Medicare] beneficiary names and ID numbers?" Mr. Gaus said in the report. "There has to be a breach somewhere in the healthcare system."

Urinary catheters are an appealing target for scammers; they are low-cost products with high Medicare payout margins. The orders can escape scrutiny when they accompany billing for more expensive equipment or procedures. 

The FBI and CMS both declined to confirm or deny an investigation, citing standard procedure.

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