Medicaid Fraud Isn't Just a Minnesota Problem. Here Are 5 Other Recent Schemes.
From charging patients for black market drugs to providing medically unnecessary treatments, fraudsters have been gaming Medicare and Medicaid for decades.
On Monday, the Minnesota House of Representatives passed a bill to remove the Housing Stabilization Services (HSS) program from the state's statute. HHS launched in 2020 to help seniors and people with disabilities find housing using Medicaid money. However, fraud quickly ensued. The program was estimated to cost 2.6 million a year, but was costing over $100 million by 2024. The HSS was shut down last year after a federal investigation found widespread fraud. This Covid-era housing stabilization program in Minnesota used recruiters to find people eligible for Medicaid, many of whom had legitimate need — but billed the government for services they did not deliver to these people. While Minnesota fraud stories like this one have gone viral in the past year, Medicare and Medicaid fraud are neither new nor uncommon. Here are five other examples in recent history.
$92 Million for Black Market HIV Drugs
On Friday, March 13, Charles and Patrick Boyd were sentenced to 38 years in prison "for orchestrating a complex, nationwide drug diversion scheme," according to the Department of Justice (DOJ). As the owners of a wholesale pharmaceutical company in Maryland, the Boyds bought $92.8 million worth of HIV drugs from black-market suppliers before selling them to pharmacies for a steep profit. Medicare, Medicaid, and private insurers were then billed for these drugs.
The drugs, which were illegally obtained through patient buybacks, were not quality control tested. One of the suppliers told the DOJ that he bought these drugs on the street and packaged them in cardboard boxes he found in the trash. "On one occasion, this supplier used a diaper box he found on the street to ship the drugs," many of which were in unsealed bottles, says the DOJ. One patient testified at trial that Seroquel, an anti-psychotic drug, was in the bottle they purchased at the pharmacy, instead of their HIV medicine. He lost consciousness for 24 hours after taking what he thought was his antiviral medication.
$41 Million for Unnecessary Gynecological Procedures
Sanjeev Kumar, a gynecologist in Memphis, Tennessee, performed over 15,000 unnecessary hysteroscopies with biopsy on close to 6,000 Medicare and Medicaid patients, many with reused single-use tools. He then billed Medicare and Medicaid more than $41 million for these harmful procedures, and "netted more than $4.8 million," says the DOJ. (This amount does not include any of these procedures billed to private insurance.) In January, a federal jury found Kumar guilty of a litany of crimes, including six counts of health care fraud. He will be sentenced in April.
Kumar is not the only doctor to conduct medically unnecessary hysterectomies on the taxpayers' dime. In 2021, Javaid Perwaiz, a Virginia OB-GYN, was convicted on over 50 counts of health care fraud, performing medically unnecessary procedures, and improper sterilizations. Last year, a grand jury also indicted the hospital Pervaiz worked at for health care fraud and conspiracy to commit fraud.
Rheumatologist Makes Off With a Jet and Maserati for Misdiagnosing Arthritis
Jorge Zamora-Quezada, a rheumatologist, falsely diagnosed people with arthritis and billed millions of dollars to Medicare, Medicaid, TRICARE, and Blue Cross Blue Shield for tests and treatments. He is spending a decade in prison, and must return more than $28 million he got from ill-gotten gains and falsifying medical records to provide "unnecessary and expensive treatments, testing, injections, infusions, x-rays, MRIs," says the New York Post. These gains included 13 properties, a jet, and a Maserati, reports The HIPAA Journal. He was sentenced in 2025, but spent years in custody before that.
Urine for Cash
Zalonda Woods was at social services looking for housing when she was approached by a recruiter for Donald Booker's Medicare fraud scheme. Booker, who owned a substance-abuse treatment company as well as a diagnostic laboratory, worked with "partner organizations to recruit individuals to submit to drug testing for which the company could bill Medicaid," according to a court docket.
These patient recruiter scams are quite common. Recruiters identify Medicaid-eligible beneficiaries through subsidized housing programs and convince unwitting participants that to stay in the housing, they need to submit (medically unnecessary) urine samples.
Woods told WSOC-TV that staff "falsified her case file to list addictions she said she never had, and therapy she never needed or attended." Because the drug testing was reimbursed by Medicaid, drug use was encouraged. If you tested clean, you were punished, says Woods.
Booker's companies billed Medicaid for more than $12 million during this scheme. While people like Woods only received about $30 per urine sample, some of Booker's accomplices netted as much as $1.5 million. Booker was sentenced to 200 months in federal prison in 2023.
Ex-NFL Player Pockets $54 Million for DNA Testing
Keith Gray, who had a brief stint as an offensive lineman for the Carolina Panthers, "orchestrated a scheme to bill Medicare for medically unnecessary genetic tests designed to evaluate the risk of various cardiovascular diseases and conditions," according to a DOJ press release.
The scheme involved using Gray's two clinical labs to pay kickbacks to "marketers in exchange for their referral of Medicare beneficiaries' DNA samples, personally identifiable information (including Medicare numbers) and signed test orders from medical providers authorizing the medically unnecessary genetic tests," says the DOJ. The telemarketers would then engage in "doctor chase," tracking down physicians to obtain signatures authorizing the genetic tests for Medicare beneficiaries the doctors had never actually referred or examined.
These labs billed Medicare $328 million, with Gray pocketing $54 million. He laundered some of this money by purchasing luxury vehicles. Schemes like these have led to millions worth of Medicare fraud. Gray was convicted in February and is awaiting sentencing.