Fraudulent Medicare claim payments identified by ECHO

An ECHO^® Fraud Detection Case Summary. Learn How Our Clients Mitigated Losses While Alleged Scheme Reached $2B¹.

Case Summary at a Glance

This case summary describes one example of ECHO’s fraud prevention in action. Highly specialized monitoring protocols identified suspicious card payment activity across multiple payees. Further investigation revealed suspected Medicare claims fraud. ECHO’s 43 clients capped payments at a collective $5M. Total payments to this scheme reached $2B. At the time of this summary, no one has been identified or charged.

Case Scenario

In August 2023 multiple Tax IDs, all related to catheters within the durable medical equipment (DME) space, shifted their virtual card usage to a singular Square reader “SQ *Royal Goods Inc”, triggering alerts and notifications, that ultimately led to the discovery of what is believed to be a DME fraud ring.

Upon discovery that five separate DME providers in different locations around the country were all transacting with the same card reader, notifications were issued to the provider locations as suspected card fraud. There were no phone numbers on file for any of the provider locations, so initial notification documents were mailed to the provider locations.

ECHO’s Discoveries Include:

• All phones registered to the provider locations were disconnected and no longer in service.
• Calls to authorized officials, listed within the NPI data for each organization, indicated that these businesses were no longer in service.
• Each of the DME providers had recent ownership amendments filed with their respective Secretaries of State.
• Upon discovering numerous red flags for business identity theft, this activity no longer appeared to be standard card fraud. Instead, the activity was flagged as possible claims fraud.
• Further review of these provider locations found that between January 2023 and October 2023, over $5 million was paid to these five locations by 43 client payers and TPAs.

Download the full case summary below

¹Diamond, Dan; Weber, Lauren; and Keating, Dan, “U.S. investigates alleged Medicare fraud scheme estimated at $2 billion”, The Washington Post, February 9, 2024 at 4:31 p.m. EST.