Durable Medical Equipment Fraud: Warning Signs and How to Report

Durable medical equipment fraud is the practice of billing Medicare, Medicaid, or another federal health program for items like braces, wheelchairs, oxygen supplies, or CPAP machines that were never delivered, never medically needed, or misrepresented on the claim. The losses are enormous. In a single 2025 enforcement operation, the Department of Justice charged 324 defendants in schemes involving more than $14.6 billion in intended losses, including one network that submitted $10.6 billion in fraudulent claims for catheters and other equipment using the stolen identities of over a million Americans.¹ If you spot a suspicious charge on your own Medicare statement, you can report it directly to 1-800-MEDICARE or the HHS Office of Inspector General.

The Common Schemes

Most DME fraud follows a handful of playbooks. The simplest is phantom billing, where a supplier submits claims for equipment a patient never received. A related tactic is upcoding: the supplier delivers a cheap knee brace but bills Medicare for an expensive custom-fitted device.

Unbundling is subtler. A single piece of equipment gets billed as if its components were separate orders. A wheelchair that should be billed as one item becomes a seat, a frame, armrests, and footrests on four different claim lines, and the total reimbursement balloons well beyond the correct charge.

Large operations rely on kickbacks to generate volume. A supplier pays a telemarketing firm to cold-call Medicare beneficiaries and harvest their insurance information, or pays doctors to sign prescriptions for patients they have never examined. Federal law makes both sides of these arrangements a felony, with fines up to $100,000 and up to 10 years in prison per violation.²

Identity theft rounds out the toolkit. Fraudsters use stolen Medicare numbers to submit claims for deceased beneficiaries or patients who never knew equipment was ordered in their name. The volume of legitimate Medicare claims makes these charges easy to hide.

Two Clear Warning Signs

Unsolicited Phone Calls

Federal law prohibits DME suppliers from making unsolicited phone calls to Medicare beneficiaries to sell covered items. A supplier can only call you if you gave written permission, the supplier already furnished you with the same type of equipment, or the supplier provided you with at least one covered item in the past 15 months.³ Any claim generated by a prohibited call is considered false. Hiring a third-party marketing firm does not create a loophole; the supplier is liable for what its contractors do.

If you receive an unsolicited call offering free braces, oxygen supplies, or genetic testing kits and the caller asks for your Medicare number, that is one of the clearest red flags in healthcare fraud. Hang up.

Equipment That Arrives Without a Doctor Visit

For many categories of DME, Medicare requires that a treating physician or other qualified practitioner conduct a face-to-face encounter with you within six months before writing the prescription, documented with your medical history, examination findings, and the clinical rationale for the equipment.⁴ Telehealth visits can satisfy this requirement when appropriate. Equipment that shows up at your door without any preceding medical visit almost certainly involved a fraudulent order.

Equipment Most Often Involved

Certain devices attract fraud because of high reimbursement rates, ease of mass distribution, or recurring billing opportunities. These are the categories that show up most often in enforcement actions and on suspicious statements:

Orthotic braces. Back, knee, and neck braces are the workhorses of DME fraud. Inexpensive to manufacture, easy to ship in bulk, and reimbursed at rates that far exceed their cost.
Power wheelchairs and scooters. A single unit can cost Medicare thousands of dollars. These items require prior authorization precisely because fraud in this category was so widespread.
CPAP machines and oxygen supplies. Ongoing refills and replacement parts create recurring billing opportunities long after any initial patient contact.
Diabetic testing supplies. The huge volume of legitimate glucose monitor and test strip claims makes it easy for fraudulent charges to blend in.
Genetic testing kits. Scammers offer “free” cheek swabs at health fairs, public events, or through the mail, then bill Medicare thousands of dollars for pharmacogenomic testing that was never medically necessary. If Medicare denies the claim, you can be stuck with the bill.⁵

How This Hurts You Personally

DME fraud is not just an abstract cost to taxpayers. If someone uses your Medicare number to bill for equipment you never received, the consequences land on you. Your insurance records now show that you received and used that equipment, which can trigger the benefit limit for that category of device. When you actually need the equipment later, your insurer may deny the claim because, according to their records, you already have it.⁶

Medical identity theft also corrupts your health records. A stranger’s diagnoses, allergies, or blood type can end up mixed into your file, which can lead to dangerous treatment decisions if a provider relies on those records in an emergency. Cleaning them up is time-consuming and often requires contacting every provider and insurer that received the tainted information.

How to Spot Fraud on Your Statements

Your Medicare Summary Notice or private insurer’s Explanation of Benefits is the single most important fraud detection tool you have. Review every statement for equipment you did not request, providers you have never visited, and physicians whose names you do not recognize. Pay particular attention to the dates of service. A charge for a doctor’s visit on a day you were not seen is a clear warning sign.

If you notice charges for equipment you never ordered, contact your healthcare provider first to rule out a billing error. If the charge is not a mistake, treat it as suspected fraud.

How to Report DME Fraud

Before you make the call, gather what you can from your statement:

The claim number and date of service, so investigators can locate the exact transaction.
The DME supplier’s name and address as listed on the billing statement.
The ordering physician’s name. If you have never seen this doctor, say so explicitly.
A description of what was billed, whether you received anything, and whether what you received matched the claim.
The total amount billed and the amount your insurer paid.

You can report through several official channels. The HHS Office of Inspector General maintains a hotline at 1-800-HHS-TIPS (1-800-447-8477) and accepts online submissions through its fraud reporting portal.⁷ You can also call 1-800-MEDICARE (1-800-633-4227) to report suspicious charges directly.⁸ Your local Senior Medicare Patrol at 1-877-808-2468 can also help you sort through the charges and file a report.⁹

After you file, investigators may contact you for additional details and will typically conduct a broader audit of the supplier’s billing history to determine whether your case is part of a larger pattern. Request a copy of your medical records from any provider listed on the suspicious claims and ask your insurer to flag your account.

If You Have Inside Knowledge: Whistleblower Lawsuits

The False Claims Act lets private citizens sue on behalf of the federal government. If you have inside knowledge of a DME fraud scheme as an employee, contractor, or billing specialist, you can file what is called a qui tam lawsuit. The complaint must be filed under seal and served on the government along with all your evidence. The case stays sealed for at least 60 days while the Department of Justice investigates and decides whether to take over the prosecution.¹⁰

The financial incentive is substantial. If the government intervenes and the case succeeds, the whistleblower receives 15 to 25 percent of the total recovery. If the government declines and the whistleblower carries the case forward alone, the share rises to 25 to 30 percent. The law also protects whistleblowers from retaliation. An employer who fires, demotes, suspends, threatens, or otherwise discriminates against an employee for pursuing a qui tam action owes reinstatement, double back pay with interest, and compensation for special damages including attorney’s fees.¹⁰

One important limitation: the case cannot be based primarily on information already publicly disclosed through news reports, government audits, or prior legal proceedings, unless you are the original source. Disclosing the existence of a sealed complaint before the court unseals it can jeopardize both the case and your reward, so consulting an attorney experienced in whistleblower cases before taking any action is strongly advisable.

What Happens to the Fraudsters

The federal healthcare fraud statute carries a base sentence of up to 10 years in prison and a fine for each count. If the fraud results in serious bodily injury, the maximum jumps to 20 years. If someone dies, the sentence can be any term of years up to life imprisonment.¹¹ Prosecutors do not need to prove that the defendant knew about this specific statute; knowingly executing the scheme is enough.

Kickback violations carry their own penalties on top of the fraud charges, and large DME operations involve dozens or hundreds of individual kickback transactions, so exposure stacks quickly. A Texas man was sentenced in March 2026 to 90 months in prison for a $59.9 million DME kickback conspiracy.¹

On the civil side, the False Claims Act requires anyone who submits a false claim to a federal healthcare program to pay three times the government’s actual damages, plus a per-claim penalty. The statute sets the base range at $5,000 to $10,000 per false claim, adjusted annually for inflation. For penalties assessed after July 2025, the adjusted range is $14,308 to $28,619 per claim.¹² A supplier who submits 500 false claims faces per-claim penalties alone of $7.1 million to $14.3 million before the treble damages are calculated.¹³

A felony conviction for healthcare fraud also triggers mandatory exclusion from all federal healthcare programs for a minimum of five years.¹⁴ For a DME supplier, exclusion is a business death sentence, because federal programs account for the vast majority of DME reimbursement.

1
U.S. Department of Justice. National Health Care Fraud Takedown Results in 324 Defendants Charged
2
Office of the Law Revision Counsel. 42 USC 1320a-7b – Criminal Penalties for Acts Involving Federal Health Care Programs
3
Federal Register. Publication of OIG Updated Special Fraud Alert on Telemarketing by Durable Medical Equipment Suppliers
4
Federal Register. Medicare Program – Updates to the Master List of Items Potentially Subject to Face-to-Face Encounter and Written Order Prior to Delivery
5
Office of Inspector General. Fraud Alert – Genetic Testing Scam
6
Federal Trade Commission. What To Know About Medical Identity Theft
7
Office of Inspector General. Report Fraud, Waste, and Abuse
8
Medicare.gov. Reporting Medicare Fraud and Abuse
9
Office of Inspector General. Medical Identity Theft
10
Office of the Law Revision Counsel. 31 USC 3730 – Civil Actions for False Claims
11
Office of the Law Revision Counsel. 18 USC 1347 – Health Care Fraud
12
eCFR. Civil Monetary Penalties Inflation Adjustment
13
Office of the Law Revision Counsel. 31 USC 3729 – False Claims
14
Office of the Law Revision Counsel. 42 USC 1320a-7 – Exclusion of Certain Individuals and Entities From Participation in Medicare and State Health Care Programs