You own or run a durable medical equipment company, you marketed for one, or you signed brace orders as a doctor, and now the government is treating that business as a fraud scheme. DME fraud has been one of the Department of Justice's top healthcare enforcement priorities for years.
You own or run a durable medical equipment company, you marketed for one, or you signed brace orders as a doctor, and now the government is treating that business as a fraud scheme. DME fraud has been one of the Department of Justice's top healthcare fraud enforcement priorities for years, and the schemes it charges, back braces, knee braces, and other orthotics billed to Medicare, have produced some of the largest takedowns in the country. If agents have contacted you, or you received a subpoena, a payment suspension, or a target letter, you are already in the middle of an investigation.
This page lays out how DME cases are built and where they are attacked. It is written for the owner, the marketer, or the physician who is worried about what comes next.
The equipment is usually real and often cheap. The fraud theory is about the billing and the referrals. In the schemes prosecutors charge, a telemarketing operation or lead generator contacts Medicare beneficiaries and pitches braces at little or no cost. A telemedicine doctor who never meaningfully evaluates the patient signs the order. A DME supplier bills Medicare hundreds of dollars per brace. Money moves between the supplier, the marketers, and sometimes the ordering doctors. The government treats the doctor's signature and the brief phone consult as a cover for a billing operation driven by kickbacks.
Everyone in that chain has been charged: supplier owners, call center operators, marketing company principals, and the physicians who signed.
Like most healthcare cases, these begin with billing data, not a whistleblower. Medicare contractors and analytics flag suppliers whose brace volume, or an ordering doctor's signature volume, is a statistical outlier. The government then pulls claims data, bank records, marketing contracts, and telemedicine platform records, and may impose a payment suspension that freezes your Medicare revenue before any charge is filed. HHS-OIG and the FBI run the case. By the time you hear from them, they have the paper. They want your intent.
DME schemes are charged under the health care fraud statute, 18 U.S.C. 1347, the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), conspiracy under 18 U.S.C. 1349, and often wire fraud under 18 U.S.C. 1343 and money laundering under 18 U.S.C. 1956 and 1957. The core question is the same as in every healthcare case: did you act knowingly and willfully. A supplier who filled valid-looking orders, or a marketer who believed they were paid for lead generation and not for referrals, is not automatically a criminal. The government must prove you knew the arrangement was illegal.
Section 1347 carries up to ten years per count, and up to twenty if patient harm is alleged. Kickback counts add up to ten years each. The government pursues forfeiture and money-laundering counts to strip the proceeds, and civil liability under the False Claims Act, 31 U.S.C. 3729, with treble damages. A supplier faces revocation of its Medicare enrollment and exclusion. A physician faces licensing action and loss of the ability to bill federal programs. For most clients the business consequences arrive before the criminal case is resolved.
Test every payment against the kickback rules. Legitimate advertising, flat-fee marketing, and bona fide employment are not kickbacks. The government's burden is to prove that a payment was for referrals of federally reimbursable business. We measure each arrangement against the Anti-Kickback Statute and its safe harbors.
Attack the signature theory. The government says the telehealth encounters were shams. Whether a physician had a legitimate basis to order a brace is a medical question, defensible patient by patient, and the existence of records, complaints of pain, and prior treatment can rebut the rubber-stamp narrative.
Contest medical necessity individually. The government proves necessity with statistics and extrapolation. We force it back to the individual claim, where independent clinical experts can defend orders the government lumped together. The same statistical shortcut drives genetic testing cases.
Pin down who billed and who profited. In many DME cases the supplier submitted the claims and kept the reimbursement. A marketer or physician who never touched a Medicare claim has a different case, and a different loss amount, than the entity that billed.
DME cases are assembled over months. That means there is usually time before an indictment, and that time is where the real defense work happens. Counsel can engage the prosecutors, challenge a payment suspension, present the compliance record, and argue a client's role down or out before charges are filed. Once the grand jury returns an indictment, leverage shifts to the government. The costliest mistake in DME defense is assuming that no charge yet means no problem yet.
Because the government's theory is not that the product was fake. It is that Medicare should not have paid, because the orders were not medically necessary or were generated by kickbacks. Real equipment does not answer either question. Cases are charged where every brace was delivered.
Yes. CMS can impose a payment suspension based on a credible allegation of fraud, often before any indictment. It can freeze your revenue and pressure a quick resolution. A suspension can be challenged, and doing so early matters, because it is frequently the first sign that a criminal investigation is underway.
Yes. Marketers are routinely charged. If the government views your payments as tied to the volume of Medicare-reimbursed orders you generated, it will treat them as kickbacks and treat you as part of the conspiracy. Whether your payment was lawful lead generation is the fight.
It was a 2019 national DME takedown that charged more than two dozen defendants and alleged over a billion dollars in loss tied to brace schemes and telemedicine referrals. It set the template the government still uses: follow the braces to the marketers, the telehealth doctors, and the money.
Yes. The government charges the doctors who signed orders it considers medically unjustified, on the theory that the signature enabled the fraudulent claims. A physician's defense turns on the legitimacy of the encounters and the basis for the orders.
Loss usually drives the guideline range more than any other factor. The government often starts with the total billed or paid across the alleged scheme. We fight to limit loss to what is fairly attributable to your conduct, which can dramatically change the exposure.
It can, and the administrative process often moves before the criminal case ends. Suppliers face revocation and exclusion, physicians face board action. We defend the criminal, administrative, and licensing tracks together.
No. Decline politely, do not consent to a search without a warrant, and call a lawyer. The agents are building the intent element of their case, and early statements are hard to undo.
Preserve all records, stop talking to anyone but counsel, and get a lawyer involved before responding to any subpoena, audit, or suspension notice. Early is when the most can be done. Contact AMC Defense Law for a confidential consultation.
Three South Florida men went to federal prison on money laundering counts, not health care fraud. If you run a DME company or feed one, that distinction determines your exposure.
Florida's June 2026 Medicaid Integrity Initiative requires statewide provider revalidation. A failed revalidation or flagged billing pattern can trigger civil recovery, program removal, and a criminal referral.
Over 75 individuals have been criminally charged in the Southern District of Florida for health care fraud since 2024, with schemes totaling over $308 million in fraudulent claims. Federal prosecutors are aggressively targeting telemedicine scams, COVID-19 fraud, and kickback schemes.
DOJ charged 96 medical professionals in the 2025 takedown. The COVID telehealth boom created a paper trail prosecutors are now using against the doctors who signed.
A January 2026 Florida AKS plea shows how DOJ builds Anti-Kickback cases against DME and telehealth operators. Federal exposure under 42 U.S.C. § 1320a-7b explained.
Federal healthcare fraud cases are built from claims data before anyone is interviewed. By the time HHS-OIG or FBI agents knock, the government usually has months or years of billing analysis, and often a cooperating insider. The defense has to start where the government started: the data, the medical records that support or undercut medical necessity, and the financial relationships behind the referrals.
You saw patients over a telehealth platform, built or ran the platform, or connected doctors to the companies that needed orders, and now the government is calling it fraud. Telemedicine fraud is the connective tissue of modern healthcare enforcement.
An Anti-Kickback investigation usually means the government believes money changed hands to influence where patients or healthcare business went. These cases are built quietly, often alongside a sealed whistleblower lawsuit you do not even know exists.
You ran a lab, marketed for one, or signed test orders as a physician, and now federal agents are asking about cheek swabs, Medicare billing, and the people who sent you patients. Genetic testing fraud is one of the most aggressively prosecuted healthcare schemes in the country, and the Southern District of Florida is one of its main stages.