Billions Lost as Healthcare Fraud and Abuse Escalate
The U.S. Department of Justice estimates that healthcare fraud, waste and abuse cost the U.S. as much as $100 billion each year. Because annual healthcare expenditures now exceed $1 trillion, these losses are likely to keep growing. The National Health Care Anti-Fraud Association estimates that fraud alone costs the U.S. $68 billion.
This drains vital resources, undermines trust, inflates costs, and harms patients and providers alike. The ongoing escalation of fraud, waste and abuse has prompted the government to step up its enforcement.
Government Enforcement Actions
The Department of Government Efficiency has spearheaded the push to cut waste in the federal government by dismantling information silos to streamline sharing across agencies. A government-wide task force developed comprehensive strategies to target widespread fraud in federal programs and anti-fraud legislation — the Stopping Fraudulent Payments Act and Fraud Prevention and Accountability Act — to strengthen identity verification, expand data analytics and preserve the tools used to investigate pandemic-era fraud.
For suspected fraud involving federal programs, the U.S. Government Accountability Office maintains the FraudNet Hotline to process allegations. For Medicare and Medicaid specifically, concerns may be reported directly to the HHS Office of Inspector General.
The OIG Work Plan, which has been in place since 1976, is a strategic public roadmap anyone can follow and provides a great outline of the audits, evaluations and investigations the OIG intends to conduct to ensure program integrity, accountability and efficiency. The Work Plan is updated quarterly. Each project is categorized as initiated, in development or planned.
If you think the OIG has not been busy uncovering bad actors, think again. Take a minute to browse through this lengthy list of the most recent federal and state activities.
Federal Findings of Skin-Substitute Billing Fraud
In September 2025, the OIG published HHS OIG HIGHLIGHTS outlining Medicare Part B payment trends for skin substitutes — bioengineered grafts used to treat chronic wounds — that raised major concerns about fraud, waste and abuse. The spending on skin substitutes increased 640% in just two years, surpassing $10 billion annually by the end of 2024. The rapid expenditure was driven by both increased utilization and higher prices.
Due to the scale of the problems, several changes were implemented effective Jan. 1, 2026, including provider audits resulting in the Department of Justice charging over 450 defendants in wound care fraud cases. More audits are in the pipeline, as well as key revisions to Medicare payment for skin-substitute services.
Other Targeted Areas of Fraud and Abuse
The June 23, 2026 OIG press release outlines:
- The Justice Department’s 2026 National Health Care Fraud Takedown resulted in charges against 455 defendants, including 90 doctors and other licensed medical professionals, for their alleged participation in healthcare fraud and opioid abuse schemes involving more than $6.5 billion in false claims and patient harm, including death.
- Twenty-nine defendants were charged in the takedown for their roles in transnational criminal organizations.
- The FBI on June 4 created the Most Wanted Fraudsters List. Just four days later, a fugitive in a $1.2 billion telemedicine and durable medical equipment scheme was apprehended in the Philippines.
- The Health Care Fraud Unit’s advanced data analytics and its Data Fusion Center, staffed by experts from the unit’s data analytics team, HHS-OIG, FBI and other agencies, announced its first prosecution arising from the Fusion Center’s Financial Intelligence Review Team. Traditional data analytics were combined with financial analysis to investigate a $67 million scheme to bill Illinois Medicaid for behavioral health services that were not provided. The defendant allegedly submitted claims to Medicaid for 500 or more hours of counseling and therapy services per day, far more than the providers on staff could render even if all providers were working 24 hours per day.
Takeaways
The government is keeping a close eye on how claims are coded, billed and reimbursed. As a fiduciary, ClaimDOC believes we are responsible for doing the same: ensuring medical claims are billed correctly and priced accurately.
Organizations should stay current and review the specific areas of focus the OIG is targeting to learn about the various patterns and trends of incorrect billing resulting in fraud, abuse and waste by healthcare providers/suppliers.
Effective prevention includes:
- Understanding fraud and abuse laws, including implementing the seven elements of an effective compliance and ethics program:
- Standards of conduct
- Policies and procedures
- Appointing a compliance officer/committee
- Providing ongoing communication and education
- Internal monitoring and auditing
- Reporting
- Investigation, enforcement, discipline, response and prevention
- Being aware of the too-good-to-be-true-offers, such as “free consults,” “free equipment” and other “free” healthcare services.
- Making inquiries to providers when an individual receives a bill for healthcare services appearing questionable or inappropriate to obtain clarification regarding the services and corresponding charges.
- Reviewing explanations of benefits (EOBs) for accuracy of information and contacting the insurance plan if there are concerns related to the billed healthcare services.
Healthcare fraud and abuse is a serious crime impacting everyone and should concern everyone. The landscape of healthcare fraud, abuse and waste prevention is evolving with technological advancements in data analytics and regulatory reforms. Collaboration among investigative agencies continues to strengthen efforts to identify and combat fraud and abuse. Remaining vigilant, adaptable and addressing issues requires a concerted effort from all stakeholders to safeguard the integrity and sustainability of healthcare services.
Background
Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Employers turn to us to establish fair reimbursement rates for their plans, allowing them to save money and provide richer benefits to their employees — a win-win for everyone.
ClaimDOC’s comprehensive line-by-line auditing of claims uncovers errors that basic claim repricing and auto-adjudication fail to catch, leading to greater savings for health plans and plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns, including excessive usual and customary charges, duplication of claims, correct coding edits, unbundling of services, misuse of modifiers and numerous others. Our claims review is not intended to impact care decisions or medical practice.