Monthly Spotlight on Fraud, Waste, and Abuse
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.
Laboratory Executives, Marketers, and Physician to Pay Over $2M to Settle Allegations of Illegal Kickbacks to Doctors
A former laboratory CEO from New York, and a former laboratory sales executive from Pinehurst, North Carolina, have agreed to pay $1.2 million to resolve False Claims Act litigation with the United States alleging illegal payments to doctors for laboratory referrals in violation of the Anti-Kickback Statute.
One doctor, from Missouri City, Texas, and six marketers, all from Magnolia, Texas, have agreed to pay an additional $859,055 to settle the United States' laboratory kickback allegations against them in the case.
With these settlements, the Department of Justice has secured over $61 million in civil False Claims Act settlements since 2019 for kickbacks to healthcare providers disguised as managed service organization (MSO) investment distributions, including recoveries from over 50 physicians.
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. It seeks to ensure that medical providers' judgments are not compromised by improper financial incentives but are instead based on the best interests of their patients.
The former female CEO of Boston Heart Diagnostics Corporation (Boston Heart), a laboratory in Framingham, Massachusetts, agreed to pay $600,000 to resolve allegations that she caused false claims for laboratory testing to Medicare, Medicaid, and TRICARE from 2015 to 2017. Likewise, the former VP of Sales at Boston Heart also agreed to pay $600,000 to resolve allegations that he caused false claims for laboratory testing to Medicare, Medicaid, and TRICARE from 2015 to 2017. Both the former CEO and former VP of Sales allegedly agreed to a kickback scheme in which marketers, including Boston Heart's own employees, offered and paid doctors kickbacks disguised as MSO distributions to induce the doctors' referrals to Texas hospitals for laboratory testing performed by Boston Heart, including medically unnecessary testing. The pair allegedly knew that marketers using MSOs were recruiting doctors to order testing performed by Boston Heart for a hospital in Texas and were given a “strong recommendation” to “reel this in” and “stand down on all hospitals,” particularly in Texas. Nevertheless, the former CEO allegedly approved, and the former VP of Sales allegedly implemented an expansion of the Texas hospital arrangement to another hospital to continue working with many of the same marketers.
In addition, the settlements resolve the United States' allegations in the lawsuit that the physician solicited and received kickbacks in violation of the Anti-Kickback Statute from laboratory marketers' purported MSOs in return for laboratory testing referrals. He agreed to pay $309,055 to resolve allegations that, from November 2015 to November 2017, he received thousands of dollars in payments from two purported MSOs, Ascend MSO of TX LLC and Indus MG LLC, in return for ordering laboratory tests from Little River Healthcare, a critical access hospital in Rockdale, Texas, and True Health Diagnostics LLC, a clinical laboratory in Frisco, Texas.
Lastly, the six marketers and their associated entities agreed to pay a total of $550,000 to resolve the United States' allegations in the civil litigation that they paid kickbacks disguised as MSO payments to doctors to induce the doctors' laboratory testing referrals.
The claims resolved by the settlements are allegations only; there has been no determination of civil liability.
Source: Laboratory Executives, Marketers, and Physician to Pay Over $2M to Settle Allegations of Illegal Kickbacks to Doctors. (2026, June 1) www.justice.gov
Sunshine Care Partners and Rusty McMurray Were Excluded for 10 Years
Effective June 3, 2026, OIG excluded Sunshine Care Partners, Inc. and its owner Rusty McMurray (collectively, “Sunshine Care”), Oklahoma, from participation in all federal healthcare programs for a period of 10 years under 42 U.S.C. 1320a-7(b)(7). The exclusions were imposed based on Sunshine Care's submission of claims for complex chronic care management services for beneficiaries who never received the services. Instead, Sunshine Care's employees completed administrative services for the healthcare facilities with which it contracted, including taking the temperature of everyone who entered the facility, sanitizing and cleaning the front desk areas, and organizing paperwork.
Source: Sunshine Care Partners and Rusty McMurray Were Excluded for 10 Years. (2026, June 3). www.justice.gov
AG's Office Secures Up To $770,000 in Settlements with Former Whitinsville Applied Behavioral Analysis Provider and Its Co-Owners for Submitting False Claims to MassHealth
The Massachusetts Attorney General's Office (AGO) announced that it has reached settlements with Flexible Fundamentals, Inc. (Flexible Fundamentals)—a former Whitinsville-based Applied Behavioral Analysis (ABA) provider—and its co-owners. The settlement agreements resolve allegations that, under the pair's ownership, the company fraudulently billed MassHealth, the state Medicaid program, through its managed care entities (MCEs), for ABA services that were never provided and/or not properly documented, and for failing to provide adequate supervision of its paraprofessional behavioral technicians.
Under the terms of the agreements, Flexible Fundamentals and its co-owners will pay up to $778,703 to the Commonwealth. The settlement also requires one owner and her new company, Pragmatic Minds, LLC, and the other and her new company, Social Perspectives 4 Everyone, LLC, to implement compliance and monitoring programs for three years to ensure compliance with ABA requirements and provide additional training to staff. The independent compliance monitors will conduct annual on-site audits to verify each company's compliance with state and federal laws.
ABA is a treatment principally designed for children with autism spectrum disorder. ABA services focus on the analysis, design, implementation, and evaluation of social and other environmental modifications to produce meaningful changes in behavior. Many of these services are delivered by paraprofessional staff, often referred to as behavioral technicians, but MassHealth and its MCEs require that all behavioral technicians be supervised by Licensed Applied Behavioral Analysts.
The AGO alleges that Flexible Fundamentals billed MassHealth for more hours of service than Flexible Fundamentals had actually provided to members.
The AGO alleges that the company and its owners submitted claims to MCEs for ABA services provided by paraprofessional behavioral technicians who were not supervised by Licensed Applied Behavioral Analysts, as required.
Source: AG's Office Secures Up To $770,000 in Settlements with Former Whitinsville Applied Behavioral Analysis Provider and Its Co-Owners for Submitting False Claims to MassHealth. (2026, June 5). www.mass.gov
Attorney General James Secures $36.5 Million from CVS for Defrauding Medicaid
New York Attorney General Letitia James joined a bipartisan coalition of 36 other attorneys general and the United States Department of Justice (DOJ) in securing $36.5 million from CVS Pharmacy, Inc. (CVS) for fraudulently overbilling Medicaid for insulin prescriptions. From 2010 to 2020, CVS knowingly dispensed more insulin to customers than they needed while maintaining that they were reporting the correct amount of insulin in their prescriptions. These fraudulent claims allowed the company to rake in millions in extra reimbursements from Medicaid for insulin distribution. Under a settlement with Attorney General James and the coalition, CVS will pay more than $25 million to state Medicaid programs across the country, including $2.25 million to New York.
“When big companies defraud Medicaid, hardworking New Yorkers pay the price,” said Attorney General James. “Our state's Medicaid funds should support health care for those in need, not unjustly boost the profits of big corporations like CVS. My office is focused on stopping fraud in all its forms, and I will continue to root out corporate corruption on behalf of New Yorkers.”
Insulin “pens”—a set dose of insulin in a syringe contained inside a plastic shell—are a common way for diabetic patients to give themselves the insulin they need. Patients need a prescription for these pens and receive a supply from their pharmacy that will last them a certain amount of time—often 30 or 90 days—along with instructions on how to administer the correct dose at the right frequency.
Attorney General James and the coalition's investigation found that CVS dispensed more insulin to Medicaid recipients than their prescriptions specified and refilled insulin pen prescriptions well before they were needed. This allowed CVS to overbill Medicaid millions of dollars for more insulin than it should have been dispensing. To cover up their fraud, CVS falsely under-reported the amount of time that the supply of insulin would last and failed to comply with certain rules used to calculate refill dates. As a result of CVS's false claims, some Medicaid recipients accumulated large quantities of unused insulin, which was both wasteful and potentially dangerous as insulin can expire.
As a result of the settlement, CVS will pay $36,500,000 to the states and federal government, including $25,108,480.45 for Medicaid programs in the participating states, and $2,257,250.51 for New York.
Joining Attorney General James in securing the settlement are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and the District of Columbia.
Source: Attorney General James Secures $36.5 Million from CVS for Defrauding Medicaid. (2026, June 9). www.justice.gov
San Francisco Company Agrees to Pay Over $3 Million to Resolve Allegations That They Submitted False Claims for Healthcare Payments
San Francisco-based Circle Medical Care of California, Circle Medical Technologies, Inc., and their chief medical officer and medical director (collectively, “Circle”) have agreed to pay a total of $3,325,000 to the United States and the State of California to settle allegations that they knowingly submitted claims for payments to federal healthcare programs and California commercial insurers for services by providers who did not actually provide or supervise those services, in violation of the federal False Claims Act and corresponding state statute.
Circle operates an online telehealth platform through which it offers mental health treatment and primary care medical services through contract providers, including nurse practitioners and physician assistants located throughout the country. Circle submits claims for payment to federally funded health programs, including Medicare, Medicaid, and TRICARE, and to California commercial insurers. The United States and California allege that Circle submitted claims for payment to these programs and insurers for services, and received reimbursement, between January 1, 2018, and May 31, 2025, despite knowingly identifying the name and NPI (National Provider Identifier) number of rendering providers who did not actually provide or supervise the services rendered, and failed to properly supervise the nurse practitioners and physician assistants who rendered medical services to its patients during this period.
Under the settlement agreement, Circle will pay $475,000 to the United States and $2,850,000 to California.
The settlement resolves claims brought under the qui tam or whistleblower provisions of the 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. The relator in this case will receive $80,750 from the United States and $997,500 from California.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Source: San Francisco Company Agrees to Pay Over Three Million Dollars to Resolve Allegations That They Submitted False Claims for Healthcare Payments. (2026, June 10). www.justice.gov
CHI St. Vincent Medical Group Hot Springs Agreed to Pay $160,000 for Allegedly Violating the Civil Monetary Penalties Law by Submitting False Claims for Facet Joint Injections
On June 11, 2026, CHI St. Vincent Medical Group Hot Springs (St. Vincent), Hot Springs, Arkansas, entered into a $167,828.06 settlement agreement with the OIG. The settlement agreement resolves allegations that St. Vincent submitted claims to Medicare for facet joint injections that were false, fraudulent, or medically unnecessary because the rendering provider did not perform diagnostic FJIs prior to rendering therapeutic FJIs.
Source: CHI St. Vincent Medical Group Hot Springs Agreed to Pay $160,000 for Allegedly Violating the Civil Monetary Penalties Law by Submitting False Claims for Facet Joint Injections. (2026, June 11). www.justice.gov
Journey to Hope Health and Healing and Former CEO Agree to Pay $10.2 Million to Resolve False Claims Allegations
Journey to Hope, Health, and Healing (“Journey”) and its former CEO have agreed to pay $10.2 million to resolve allegations that the opioid treatment provider submitted false claims to the Rhode Island Medicaid program and Medicare for substance use disorder treatment services that were not provided.
Journey, when owned and led by its former CEO, operated outpatient treatment facilities in Rhode Island that provided substance use disorder treatment services, including methadone-assisted treatment and mental healthcare services.
The settlement resolves allegations made by the State of Rhode Island and the United States in a complaint in intervention that, from January 2015 to July 2021, Journey and its management knowingly submitted false claims to the Rhode Island Medicaid program for millions of dollars.
In April 2023, the United States and the State of Rhode Island filed a complaint in intervention (complaint) under the federal and state False Claims Acts, alleging that Journey failed to provide required treatment plans and adequate counseling services to certain patients receiving methadone treatment. The complaint also alleged that Journey maintained patient caseloads at a volume so high that it was physically impossible for counselors to provide required counselling services.
The complaint further alleged that Journey and its management knowingly falsified documents by altering and backdating records to make it appear to accreditation officials and Rhode Island Medicaid auditors that they were complying with the accreditation requirements necessary to bill Rhode Island Medicaid.
Under the settlement agreement, Journey and its CEO will pay $10.2 million to the United States and the State of Rhode Island to resolve their alleged liability under the federal and state False Claims Acts. The settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the False Claims Acts by two former Journey employees. Under those provisions, private parties may file civil actions on behalf of the government and receive a portion of any recovery. Under the settlement agreement, the whistleblowers will receive approximately $2.04 million of the settlement proceeds.
Source: Journey to Hope Health and Healing and Former CEO Agree to Pay $10.2 Million to Resolve False Claims Allegations. (2026, June 16). www.justice.gov
Sonal Patel, BA, CPMA, CPC, CMC, ICDCM, is CEO and Principal Strategist at SP Collaborative, LLC.