A New Jersey durable medical equipment company billed a Medicare Advantage plan 38 separate times for a beneficiary who was already dead, listing dates of service that fell after the person’s death certificate was filed, according to federal investigators. The Centers for Medicare & Medicaid Services says that pattern turned up across all 11 medical equipment suppliers it barred this month from future Medicare Advantage and Part D payments, tied to more than $3.4 billion in suspected fraudulent billing submitted in 2025 and 2026. Four of the eleven had already been revoked from original Medicare and simply began billing Medicare Advantage plans instead.
The $18.4 Million Florida Catheter Claims CMS Intercepted
The clearest example CMS cited came from a Florida supplier that submitted roughly $18.4 million in catheter claims across two consecutive days in December 2025. On December 15, the company billed $6.1 million tied to 500 beneficiaries; the next day it billed $12.3 million tied to 777 beneficiaries, a volume investigators treated as implausible for a single provider serving real patients. CMS used its original Medicare payment-suspension authority to stop those payments before they reached the supplier, keeping the money inside the Medicare Trust Fund rather than trying to claw it back afterward.
A Texas company followed a similar script with roughly $5.5 million in orthotics claims, but investigators went further and called six beneficiaries directly. Every one said they had never heard of the ordering providers, did not know the supplier, and had not requested or needed the braces billed in their names. Investigators also found nine beneficiaries with claims dated after their deaths and determined the company was not operating at its registered address at all, a detail that placed it on the CMS Preclusion List alongside the other ten suppliers.
CMS said all 11 suppliers shared a common profile: each had submitted no Medicare claims before 2025, then quickly showed improper billing practices, charges for equipment sent to beneficiaries who had already died, and equipment billed to people who never requested or received it. That profile, a dormant company suddenly generating high-dollar claims, is the kind of anomaly the agency says its data-analytics screening was built to catch, rather than waiting for a whistleblower complaint or a post-payment audit years later.
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How Four Suppliers Dodged an Earlier Ban by Switching to Medicare Advantage
Four of the eleven barred suppliers were not new to CMS scrutiny. They had already been revoked from billing original Medicare before this action, then simply began submitting claims to Medicare Advantage plans instead. The move exploited a structural gap: original Medicare and the private MA plans that CMS pays to cover roughly half of all beneficiaries have historically run on separate provider-screening tracks, so a company barred from one system was not automatically blocked from the other. The newly barred suppliers show that gap was not theoretical; it was actively being used to keep suspect billing flowing.
The New Jersey firm placed on the list had billed a Medicare Advantage plan for 38 separate encounters after the beneficiary listed on the claims was already deceased, and plan members separately complained they had never requested or needed the durable medical equipment in question. A second Florida company was flagged for a DME telemarketing scheme that oversupplied equipment nobody asked for; several beneficiaries told investigators they never received the braces the company billed for and did not recognize the supplier’s name. Both cases fit the pattern CMS described across the 11 barred companies.
Medicare Advantage now covers roughly half of the more than 68 million people enrolled in Medicare, and CMS pays those private plans directly rather than reimbursing providers claim-by-claim the way original Medicare does. That arrangement is why a supplier barred from original Medicare could still bill a Medicare Advantage plan and get paid, at least until the plan’s own screening, or in these cases CMS’s after-the-fact review, caught the pattern. The eleven suppliers combined show the switch was not a one-time workaround but a repeatable move.
The Preclusion List’s Reach and What CMS Still Doesn’t Know
Landing on the Preclusion List does not erase money already paid out, but it does cut a supplier off from future Medicare Advantage and Part D reimbursement, and CMS coordinated the action with the Department of Health and Human Services’ Office of Inspector General. CMS Administrator Dr. Mehmet Oz described the barrings as part of a broader push using “advanced data analytics to identify fraud networks and stop suspicious payments before the check clears,” language pointing to algorithmic screening built to catch patterns, like near-identical claim volumes tied to beneficiaries in different states, that a manual review might miss for years.
The action follows a separate CMS move on August 28 that blocked $1.6 billion in suspected fraudulent Medicare laboratory payments, suggesting the screening effort now spans multiple provider categories rather than a single case. CMS has not said how many additional durable medical equipment suppliers it is currently reviewing, nor whether the same original-Medicare-to-Medicare-Advantage switching pattern shows up elsewhere in its data. The agency’s fraud enforcement page lists the Preclusion List as one tool among several, without a public count of open investigations.
CMS said the Florida and Texas cases alone accounted for nearly $24 million in claims that never reached the suppliers, stopped through the agency’s original Medicare payment-suspension authority rather than recovered after the fact through an audit or lawsuit. That distinction matters for the Medicare Trust Fund’s finances: money that is never paid out does not need to be clawed back, and clawbacks from suppliers that already look like shell operations rarely succeed in full.
What remains unresolved is whether the Medicare Advantage pathway that let four already-revoked suppliers keep billing is now closed, or whether it stays open for the next company willing to test it. CMS’s release describes the screening and suspension authority that stopped roughly $24 million from reaching two suppliers before the funds moved, but it does not detail a rule change closing the cross-program gap itself. Until CMS or Congress addresses that structural opening, the same maneuver, get barred from original Medicare, then start billing Medicare Advantage, remains available to any supplier CMS has not yet caught.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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