Spotlight on November 2025 FWA

The following cases highlight fraud, waste, and abuse (FWA) and serve as a reminder to uphold high ethical standards when providing patient care and services. 

Diagnostic Laboratory Agrees to Pay More Than $9 Million to Settle Alleged False Claims Act Violations

A diagnostic laboratory headquartered in Indianapolis, Indiana, agreed to pay the United States $9,620,000 to resolve allegations that it violated the False Claims Act and the Anti-Kickback Statute (AKS).

The government alleges that the lab knowingly submitted claims to Medicare for respiratory pathogen panels (RPPs) that were either medically unnecessary or obtained through kickbacks. The lab also paid commissions to independent sales representatives and marketing firms (1099 representatives) based on the volume or value of referrals.

Specifically, the United States alleges that on November 20, 2020, the lab entered into a Marketing Services Agreement (MSA) with a purported infection prevention company ("the company"). Through the MSA, the lab agreed to pay $5,000 per month in exchange for “marketing and management services” in long-term care facilities. In reality, according to the United States, the MSA served as a pretext for paying the company for laboratory test referrals, which the lab then billed to Medicare.

Additionally, the United States alleges that the lab paid the company to perform services in long-term care facilities, including specimen collection for infectious disease testing. The company swabbed residents for COVID-19, and the lab used the same specimens to conduct and bill Medicare for medically unnecessary RPPs. In some cases, the lab billed for RPPs without performing any COVID-19 tests at all.

Between December 1, 2020, and May 11, 2022, the lab paid the company approximately $1.86 million in exchange for RPP referrals. During this time, the lab billed Medicare for thousands of RPPs conducted at 43 long-term care facilities nationwide, receiving more than $6 million in reimbursement.

Additionally, from January 1 to March 31, 2021, the lab contracted with 1099 representatives to promote its laboratory tests to healthcare providers. The United States alleges that these individuals were not bona fide employees. The lab paid them a percentage of the revenue generated from the testing they facilitated. The representatives helped arrange referrals and orders for tests billed to Medicare in violation of the AKS. The lab's commission payments to these representatives totaled at least $372,000.

The claims resolved by this settlement are allegations only; there has been no determination of liability. 

Source: Diagnostic Laboratory Agrees to Pay More Than $9 Million to Settle Alleged False Claims Act Violations (2025, November 13) www.justice.gov

VRA Enterprises Agrees to Pay Over $17 Million for Allegedly Billing Medicare for Over-the-Counter COVID-19 Tests That Were Not Provided to Beneficiaries, Or That Were Sent to Beneficiaries Months After Being Billed to Medicare 

A pharmacy located in Tampa, Florida, has agreed to pay the United States $17,069,371 to resolve allegations that it violated the False Claims Act (FCA) by knowingly submitting or causing the submission of false claims to Medicare for Over-the-Counter (OTC) COVID-19 tests that were not provided to beneficiaries, or that were sent to beneficiaries months after the pharmacy had billed them to Medicare.

Between April 2022 and May 2023, the pharmacy distributed OTC COVID-19 tests in connection with the Centers for Medicare and Medicaid Services (CMS) OTC COVID-19 Test Demonstration Project ("demonstration project"). During the demonstration project, Medicare Part B beneficiaries could request OTC COVID-19 tests from participating providers, such as this pharmacy, and CMS would reimburse those providers for up to eight OTC COVID-19 tests per beneficiary per month, at a fixed rate of $12 per test.

The settlement resolves allegations that the pharmacy knowingly submitted or caused the submission of false claims to Medicare for OTC COVID-19 tests in connection with the demonstration project. The United States contends that, between August 2022 and May 2023, the pharmacy submitted claims to Medicare for OTC COVID-19 tests that it did not provide to beneficiaries. The United States also contends that, in January 2023, the pharmacy submitted approximately 136,491 claims to Medicare for OTC COVID-19 tests it did not ship to beneficiaries until April 2023. The pharmacy received thousands of complaints from beneficiaries during the demonstration project about missing OTC COVID-19 tests. The pharmacy also repeatedly acknowledged internally that it had “billed Medicare” for tests it “failed to ship” and should “issue a refund” to Medicare “immediately” for such tests, but did not do so. As a result of this conduct, the United States contends that the pharmacy knowingly submitted or caused to be submitted false claims to the Medicare Program in violation of the False Claims Act.

The claims resolved by the settlement are allegations only; there has been no determination of liability. 

Source: VRA Enterprises Agrees to Pay Over $17 Million for Allegedly Billing Medicare for Over-the-Counter COVID-19 Tests That Were Not Provided to Beneficiaries, Or That Were Sent to Beneficiaries Months After Being Billed to Medicare (2025, November 14). www.justice.gov 

Tri-Cities Urgent Care Clinic Agrees to Pay $2.8 Million to Resolve Claims of Overbilling for Diagnostic Tests

An urgent care clinic with locations in Richland and Pasco, Washington, has agreed to pay $2,807,729 to resolve claims that it fraudulently overbilled Medicare and Medicaid for diagnostic tests.

According to the settlement agreement, a False Claims Act (FCA) claim arose from allegations that the urgent care clinic fraudulently billed for polymerase chain reaction (PCR) respiratory and urinary tract infection panel testing. These panel tests were a predetermined group of medical tests used to test for multiple pathogens from a single sample obtained from a patient.

The United States and the State of Washington alleged that instead of billing for a single panel test, the urgent care clinic improperly “unbundled” the panel test and billed for each individual test comprising the panel. This resulted in overbilling to Medicare and Medicaid programs. In addition, the State of Washington alleged that the urgent care clinic improperly billed for panel tests that were more expensive and not medically necessary for individual patients, such as patients presenting with symptoms of COVID-19.

Source: Tri-Cities Urgent Care Clinic Agrees to Pay $2.8 Million to Resolve Claims of Overbilling for Diagnostic Tests (2025, November 17). www.justice.gov

CVS Pharmacy Inc. Pays $18.2 Million to Resolve Alleged False Claims Act Violations

CVS Pharmacy Inc. has paid a total of $18,282,280 to the United States and the State of California to resolve allegations that the company violated the Federal False Claims Act and the California False Claims Act when it knowingly submitted claims for reimbursement for certain prescribed medications to California's Medi-Cal program that were not supported by applicable diagnosis and documentation requirements.

CVS is among the largest pharmacy chains in the United States, with more than 9,000 locations nationwide and more than 1,000 stores in California. CVS submits reimbursement claims for medications dispensed to beneficiaries of the Medi-Cal program—California's Medicaid healthcare program administered by the California Department of Health Care Services (DHCS). Medi-Cal relies on both federal and state funding to provide healthcare to millions of Californians, including those with low incomes and disabilities.

Medi-Cal utilizes a “formulary” list that designates restrictions for certain listed drugs, including restrictions pertaining to diagnoses and required documentation that must be confirmed by the pharmacy before the drug can be prescribed. Drugs listed on the Medi-Cal formulary are commonly referred to as “Code 1” drugs. Medi-Cal will reimburse certain Code 1 drugs only for approved diagnoses, taking into account criteria such as the drug's safety, efficacy, misuse potential, and cost. Pharmacies such as CVS serve the critical gatekeeping function of confirming and certifying that these Code 1 drugs are dispensed for the approved diagnoses. CVS may bill for drugs prescribed outside of the approved diagnoses, but it must submit a request to DHCS that includes a justification for the non-approved use.

The settlement resolves allegations that CVS failed to confirm and document the requisite diagnoses, and in some instances dispensed drugs for non-approved diagnoses, then knowingly billed Medi-Cal for those prescriptions.

This settlement includes the resolution of claims brought by a former CVS pharmacist under the qui tam or whistleblower provisions of the Federal False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery from that action. As part of the settlement, the whistleblower will receive approximately $3.3 million of the recovery proceeds.

The claims resolved by this settlement are allegations only; there has been no determination of liability. 

Source: CVS Pharmacy Inc. Pays $18.2 Million to Resolve Alleged False Claims Act Violations (2025, November 17). www.justice.gov

Founder/CEO and Clinical President of Digital Health Company Convicted in $100M Adderall Distribution and Healthcare Fraud Scheme

A federal jury in San Francisco convicted the founder and CEO of a California-based digital health company, and its clinical president for their roles in a years-long scheme to illegally distribute Adderall over the internet and conspire to commit healthcare fraud in connection with the submission of false and fraudulent claims for reimbursement for Adderall and other stimulants. The founder and CEO was also convicted of conspiring to obstruct justice.

According to court documents and evidence presented at trial, both parties conspired with others to build a billion-dollar technology company and raise money from investors by providing easy access to over 40 million pills of Adderall and other stimulants in exchange for payment of a monthly subscription fee.

The pair spent over $40 million on deceptive advertisements on social media networks that sought to convince Americans challenged by a lack of structure during the COVID-19 pandemic that they were suffering from ADHD. The defendants also paid for targeted keyword search advertisements for drug seekers who wanted to obtain Adderall without a legal prescription. The evidence at trial showed that both parties sought to place “hard limits” on clinical discretion by limiting the length of the initial appointment to less than half the length of a typical psychiatric examination, and seeking to increase profits by refusing to pay for any follow-up treatment. To facilitate the illegal prescriptions, the CEO and founder paid nurse practitioners around the country up to $60,000 per month to refill prescriptions without clinical interaction and enabled an “auto-refill” technology feature where patients could receive prescriptions without clinical interaction for years based on an auto-generated email sent each month requesting additional prescriptions. The auto-refill policy, in some instances, resulted in prescriptions being issued for deceased patients.

The CEO and founder instructed employees that successful technology companies profit from addiction, and offered an expensive luxury electric vehicle to employees who broke the law. The president told nurses to continue prescribing Adderall, even to patients who were abusing other medications, and to disregard the risk of going to jail. The pair also prohibited independent clinical practitioners from discharging patients, and patients were not discharged and continued to receive Adderall even after concerned family members repeatedly notified the president that their children were suffering from bipolar, Adderall-induced psychosis, or other mental health conditions that could be worsened by continued prescriptions.

To ensure that members continued paying monthly subscription fees, the pair and others conspired to defraud insurers so that members would be able to use insurance to pay for Adderall dispensed at pharmacies. The duo and others submitted false and fraudulent prior authorization requests to insurers, which claimed that the company followed the DSM-5 in diagnosing ADHD, utilized urine drug screens, and falsely claimed that non-stimulants had previously been tried without success. As a result, Medicare, Medicaid, and the commercial insurers paid in excess of approximately $14 million.

In 2022, national media outlets reported that the company was making Adderall too easy to get online. In response to questions from the media, investors, and certain major pharmacy chains, the defendants made deceptive statements about the company's policies. While internal documents showed that the defendants followed a “customer-first” philosophy where they attempted to obtain customer approval ratings higher than America's highest-rated retailers, offered second opinions to patients who complained of being denied Adderall, and that the CEO and founder—who had no medical training—ultimately was responsible for approving clinical practices, the defendants falsely denied the existence of these policies and claimed the company was run by independent clinical leadership.

To obstruct the government's investigation, the evidence at trial showed that the CEO and founder moved operations to China to make personnel and evidence unavailable. The CEO and founder limited communications on company platforms, used encrypted messaging apps with disappearing messages, and deleted incriminatory documents, such as language encouraging the company's providers to provide Adderall even to patients who did not have ADHD. The CEO and founder also transferred over $1 million to a Chinese shell company, conducted internet searches for countries that did not have extradition, and was stopped by law enforcement as he attempted to leave the country.

Both the CEO/founder and clinical president were convicted of one count of conspiracy to distribute controlled substances, four counts of distribution of controlled substances, and one count of conspiracy to commit healthcare fraud. Each faces a maximum penalty of 20 years in prison on the conspiracy to distribute controlled substances and distribution of controlled substances counts. The CEO/founder was also convicted of one count of conspiracy to obstruct justice. Sentencings are set for Feb. 25, 2026. The judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Source: Founder/CEO and Clinical President of Digital Health Company Convicted in $100M Adderall Distribution and Health Care Fraud Scheme (2025, November 19). www.justice.gov

Vohra Wound Physicians and Its Owner Agree to Pay $45M to Settle Fraud Allegations of Overbilling for Wound Care Services 

The doctor and his companies, including Vohra Wound Physicians Management LLC (Vohra), have agreed to pay $45 million to resolve allegations that they violated the False Claims Act by knowingly causing the submission of claims to Medicare for medically unnecessary surgical procedures, for more lucrative surgical procedures when only routine non-surgical wound management had been done, and for evaluation and management services that were not billable under Medicare coverage and coding rules.

Vohra is one of the nation's largest providers of bedside specialty wound care for patients in nursing homes and skilled nursing facilities. In April 2025, the United States filed a lawsuit alleging that Vohra engaged in a nationwide scheme to bill Medicare for surgical excisional debridement procedures that were either not medically necessary or had not been performed. In its complaint, the United States alleged that Vohra pressured, trained, and provided financial incentives for Vohra physicians to perform debridement procedures during as many patient visits as possible regardless of the patients' needs. Furthermore, it did not matter which kind of debridement a Vohra physician performed because Vohra allegedly programmed its electronic health record and billing software to ensure that Medicare was always billed for the higher-reimbursed surgical excisional procedure and to create false medical record documentation to support the scheme. Finally, the United States alleged that this widespread scheme was orchestrated by Dr. Vohra and implemented by his senior management team.

Under the settlement, Vohra will enter into a five-year Corporate Integrity Agreement (CIA) with the Office of Inspector General for the Department of Health and Human Services. Under the CIA, Vohra must develop and maintain a compliance program, implement a risk assessment process, and hire an independent review organization (IRO) to review its claims and health information technology systems. The CIA requires monitoring of Vohra's operations and obligates company executives and owners to certify compliance annually with the terms of the CIA.

The claims resolved by the United States in the settlement are allegations only; there has been no determination of liability. 

Source: Vohra Wound Physicians and Its Owner Agree to Pay $45M to Settle Fraud Allegations of Overbilling for Wound Care Services (2025, November 21). www.justice.gov

Sonal Patel, BA, CPMA, CPC, CMC, ICDCM, is CEO and Principal Strategist at SP Collaborative, LLC. Sonal has over 13 years of experience understanding the art of business medicine. She is a nationally recognized thought-leader, speaker, author, creator, and consultant. As the CEO and Principal Strategist of SP Collaborative, LLC, she serves as a partner to healthcare organizations, medical practices, physicians, healthcare providers, vendors, consultants, medical coders, auditors, and compliance professionals in working together to elevate coding compliance education for the business of medicine.

www.spcollaborative.net