In 2025, federal and state authorities across the United States intensified efforts to combat fraud, waste, and abuse (FWA) in healthcare programs, uncovering sophisticated schemes that exploited vulnerabilities in lab testing, home health and hospice care, and telehealth services. These investigations revealed how bad actors manipulated billing systems and regulatory gaps to generate illicit profits at the expense of patients and public payers.
The U.S. Government Accountability Office (GAO) reported that improper payments in federal healthcare programs remained a persistent challenge, with state agencies administering many of these programs and making critical decisions about payments and eligibility. This decentralized structure created opportunities for fraudsters to target inconsistencies in oversight and documentation requirements across jurisdictions.
According to the Department of Health and Human Services (HHS), maintaining accurate Institutional Review Board (IRB) and Federalwide Assurance (FWA) status is essential for research integrity, but gaps in compliance monitoring have occasionally been exploited in fraudulent billing schemes involving clinical research and patient recruitment.
Fraudulent Lab Testing Schemes
In 2025, authorities uncovered multiple cases where providers billed Medicare and Medicaid for unnecessary or never-performed clinical laboratory tests. One scheme involved a network of clinics in the southeastern United States that allegedly ordered extensive genetic and toxicology screens for patients with minimal clinical indication, then submitted claims for tests that were either not medically justified or not actually conducted.
Investigators found that some providers used patient recruitment tactics targeting elderly and chronically ill individuals, offering free screenings or wellness checks as a pretext to collect specimens and generate billable services. The GAO noted that state agencies administering federal lab benefit programs often lack real-time analytics to detect anomalous billing patterns, such as repeated identical tests or tests ordered outside established clinical guidelines.
The Thomson Reuters 2024 Government Fraud, Waste & Abuse Report highlighted that outdated technology and insufficient training among government workers hinder effective detection of such schemes, particularly when fraudsters employ complex billing codes or split services across multiple providers to evade scrutiny.
Abuse in Home Health and Hospice Care
Home health and hospice services emerged as another high-risk area for FWA in 2025, with federal investigations focusing on eligibility fraud and inflated service claims. In several cases, providers were accused of enrolling patients who did not meet the strict criteria for homebound status or terminal prognosis required for Medicare home health and hospice benefits.
Some schemes involved falsifying physician certifications or altering medical records to justify prolonged care periods. Others billed for visits that never occurred or exaggerated the level of skilled nursing care provided. The GAO emphasized that because state agencies craft eligibility determinations for many federally funded home health programs, inconsistencies in assessment protocols can be exploited.
HHS guidance requires that hospice patients be certified as having a life expectancy of six months or less if the illness runs its normal course, but investigators found instances where patients remained enrolled for years without proper recertification — a red flag for potential fraud. The Thomson Reuters report noted that recruitment difficulties and high workloads among state program reviewers can delay identification of such anomalies.
Deceptive Telehealth Practices
The rapid expansion of telehealth during and after the pandemic created new avenues for fraud in 2025, particularly in behavioral health and durable medical equipment (DME) billing. Authorities prosecuted cases where providers billed for telehealth visits that were either not rendered, not conducted via real-time interactive communication, or lacked proper documentation of medical necessity.
One investigated scheme involved a telehealth platform that allegedly connected patients with providers who prescribed expensive compounded medications or unnecessary DME after brief video consultations. Claims were then submitted to federal programs using inflated billing codes. The GAO warned that the geographic flexibility of telehealth complicates oversight, as services may be delivered across state lines while billing occurs in jurisdictions with weaker fraud detection capabilities.
HHS has issued advisories reminding providers that telehealth services must meet the same standards of care and documentation as in-person visits, including obtaining informed consent and maintaining accurate records of session duration and content. Yet, the Thomson Reuters report observed that many state Medicaid programs still lack integrated systems to cross-verify telehealth claims against provider licensure, patient location, and service timing in real time.
Impact and Mitigation Strategies
These FWA schemes disproportionately affect vulnerable populations, including elderly beneficiaries, individuals with chronic disabilities, and those in underserved communities who may be targeted for recruitment due to their frequent interaction with healthcare systems. Beyond financial losses to federal and state budgets, such fraud erodes trust in public health programs and can lead to unnecessary medical interventions for patients.
To combat these threats, the GAO recommends that state agencies enhance data analytics capabilities to identify aberrant billing patterns, improve provider screening and enrollment processes, and strengthen collaboration with federal counterparts like the Department of Justice and Health and Human Services Office of Inspector General. The agency as well advocates for greater employ of predictive modeling and artificial intelligence to flag potential fraud before payments are made.
HHS encourages healthcare organizations to implement robust internal compliance programs, conduct regular staff training on proper billing practices, and perform routine audits of high-risk services such as lab testing, home health, and telehealth. Providers are urged to verify patient eligibility thoroughly, ensure all services are medically necessary and properly documented, and retain records for the federally required retention period.
As of April 2026, the Centers for Medicare & Medicaid Services (CMS) continues to monitor FWA trends through its Fraud Prevention System and publishes periodic advisories for stakeholders. Stakeholders seeking official updates can access CMS’s program integrity resources online, while suspected fraud can be reported to the HHS Office of Inspector General hotline.
Staying informed about evolving fraud tactics remains critical for safeguarding healthcare resources. Readers are encouraged to share insights and experiences in the comments below and to disseminate this information to help promote awareness and vigilance across the healthcare community.