A total of 11 medical equipment suppliers, linked to over $3.4 billion in potentially fraudulent billing during 2025 and 2026, have been barred by the Centers for Medicare & Medicaid Services from receiving future payments under Medicare Advantage and Part D.
Allegations of Deceptive Practices
According to CMS, these 11 suppliers of durable medical equipment, prosthetics, orthotics, and supplies submitted claims for services provided to beneficiaries who were deceased at the time of the reported service dates. Additionally, they allegedly billed for equipment that was never requested or received by the beneficiaries.
CMS Administrator Dr. Mehmet Oz stated in the agency’s September 8 announcement, “Fraudsters who take advantage of the recently deceased to line their pockets represent a level of indecency that we will not stand for.”
CMS found that these suppliers had no prior history of submitting Medicare claims before 2025 and engaged in improper billing practices. Four of the companies had previously lost their billing privileges under Original Medicare but then began billing Medicare Advantage plans.
Following a determination that their actions were detrimental to the Medicare program, CMS added the companies to its Preclusion List. As a result, Medicare Advantage plans are required to deny payments for items and services provided by these entities, and Part D sponsors must reject claims for prescriptions from listed providers.
The agency has not disclosed the identities of the 11 suppliers or the amount of the $3.4 billion in suspected billing that was actually paid.
Specific Instances of Suspicious Activity
CMS reported that it stopped nearly $24 million in claims from two suppliers before payment was made. In one instance, a supplier in Florida submitted approximately $18.4 million in catheter claims over two consecutive days in December 2025.
Read Also: Kaiser and UnitedHealthcare lead satisfaction as scores dip
The claims included $6.1 million for 500 beneficiaries on December 15 and $12.3 million for 777 beneficiaries on the following day. A company in Texas submitted approximately $5.5 million in orthotics claims.
Investigations found that six beneficiaries were unaware of the ordering providers, had never heard of the suppliers, and did not need the equipment. CMS also identified claims with service dates after the beneficiaries’ deaths and determined that the company was not operating from its reported location.
Another company, based in New Jersey, billed a Medicare Advantage plan for 38 encounters involving beneficiaries who were already deceased, according to CMS. The beneficiaries reported that they did not know the providers involved and had not requested the equipment.
Medicare spends over $7 billion annually on durable medical equipment, prosthetics, orthotics, and supplies through Original Medicare alone, as reported by the Department of Health and Human Services Office of Inspector General (OIG).
In February, CMS announced that it had suspended $5.7 billion in suspected fraudulent Medicare payments during 2025. The agency also prevented $1.5 billion in suspected fraudulent medical equipment billing, revoked the billing privileges of 5,586 providers and suppliers, and referred 372 cases involving $3.7 billion in billing to law enforcement.
Proposed changes to Medicare enrollment would grant CMS additional authority to remove noncompliant providers and recover improper payments, potentially saving approximately $82 million annually.
