Medicare Fraud in 2025: The Biggest Cases and What's Changed
Published February 2026 · 14 min read
Key Finding
2025 was the biggest year for Medicare fraud enforcement in U.S. history. The DOJ charged 324 defendants in a $14.6 billion takedown — the largest healthcare fraud action ever — while False Claims Act recoveries hit a record $6.8 billion.
The $14.6 Billion Takedown
In June 2025, the Department of Justice announced the largest healthcare fraud enforcement action in history. The coordinated effort charged 324 defendants across the country for schemes totaling approximately $14.6 billion in alleged fraudulent billing. The operation involved every U.S. Attorney's Office and partnerships with the HHS Office of Inspector General, FBI, and state Medicaid Fraud Control Units.
The cases spanned the full spectrum of healthcare fraud: phantom billing, unnecessary medical procedures, kickback schemes, and identity theft. But several categories stood out for their scale and audacity.
Wound Care: Ground Zero for Fraud
The DOJ's takedown made one thing clear: wound care is the epicenter of Medicare fraud in 2025. Skin substitute products and debridement procedures were flagged in dozens of cases, with providers billing for products that were never applied, inflating the number of wound care visits, and running kickback schemes with product manufacturers.
HHS-OIG had already flagged skin substitutes as "particularly vulnerable to fraud" in a 2024 report. The takedown confirmed their warnings. Our own analysis found similar patterns in the data — providers with statistically impossible wound care volumes and markup ratios exceeding 60x.
Read our deep dive: The Wound Care Industrial Complex →
$6.8 Billion in False Claims Act Recoveries
FY2025 set a new record for False Claims Act recoveries, with the government collecting $6.8 billion. Healthcare fraud cases accounted for the majority. Whistleblower (qui tam) lawsuits continued to be the primary driver, with relators receiving over $1 billion in rewards.
The largest individual settlements involved pharmaceutical companies, durable medical equipment suppliers, and hospital systems accused of upcoding and unnecessary admissions.
COVID Test Billing: The Aftermath
The COVID-19 testing gold rush created a wave of fraud that enforcement agencies are still unwinding. During the pandemic, CMS relaxed billing rules and created new codes — like K1034 for over-the-counter test kits at approximately $12 each. Some providers exploited these codes to bill millions.
In 2025, DOJ brought charges against dozens of providers and testing companies for schemes including billing for tests never performed, ordering tests for beneficiaries who never requested them, and using testing as a hook for additional unnecessary services.
Read our deep dive: The COVID Test Gold Rush →
What Our Data Shows
OpenMedicare's fraud analysis has flagged over 500 providers with suspicious billing patterns that mirror the same red flags identified in DOJ prosecutions:
- •Impossible volume: Providers billing 400+ services per day — a new patient every 72 seconds
- •Extreme markups: Submitted charges 10-60x higher than Medicare payments, especially in wound care
- •Geographic clustering: Disproportionate fraud flags in South Florida, Los Angeles, and Houston
- •Code concentration: Providers billing overwhelmingly on a single high-value code
Explore these patterns yourself using our fraud analysis tools:
What's Changed in 2025
Several policy shifts are reshaping how Medicare fraud is detected and prosecuted:
- AI-powered detection: CMS and OIG are now using machine learning models to identify suspicious billing patterns in real time, rather than relying solely on retrospective audits.
- Prior authorization expansion: CMS expanded prior authorization requirements for wound care products and certain high-cost procedures, adding a prevention layer.
- Enhanced penalties: New legislation increased civil monetary penalties for fraud and expanded the definition of "knowingly" submitting false claims.
- Whistleblower incentives: False Claims Act reward percentages were increased, and new protections were added for healthcare workers who report fraud internally.
How to Report Medicare Fraud
If you suspect Medicare fraud, you can report it through the HHS-OIG hotline at 1-800-HHS-TIPS or through our reporting guide, which walks you through the process and explains whistleblower protections.