Clinical laboratory genetic testing labs and telemedicine groups among those charged
In the largest healthcare fraud bust in US history, the US Department of Justice (DOJ) announced it had levied criminal charges against 324 defendants for allegedly participating in various fraudulent healthcare schemes—including clinical laboratory genetic testing and telemedicine fraud—totaling over $14.6 billion in losses.
A DOJ press release states the agency’s 2025 National Health Care Fraud Takedown represents an unprecedented effort to alleviate fraud in healthcare that exploits patients and taxpayers.
The defendants include 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals. The cases are being prosecuted by Health Care Fraud Strike Force teams from the Criminal Division’s Fraud Section, 50 US Attorneys’ Offices, and 12 State Attorneys’ General Offices.
“This record-setting Health Care Fraud Takedown delivers justice to criminal actors who prey upon our most vulnerable citizens and steal from hardworking American taxpayers,” said Attorney General Pam Bondi in the press release. (Photo copyright: US Department of Justice.)
49 Clinical Lab Defendants Charged
The takedown relied on coordinated investigations from several agencies, including the:
Health Care Fraud Unit of the DOJ Criminal Division’s Fraud Section,
Department of Health and Human Services Office of Inspector General,
Federal Bureau of Investigation,
Drug Enforcement Administration, and,
Multiple US Attorneys’ Offices.
Clinical laboratory testing fraud was addressed in the takedown. Forty-nine defendants were charged with telemedicine and genetic testing fraud schemes where deceptive telemarketing campaigns targeted Medicare beneficiaries, resulting in $46 million in fraudulent claims being submitted to Medicare for durable medical equipment (DME), genetic tests, and COVID-19 tests.
“Make no mistake—this administration will not tolerate criminals who line their pockets with taxpayer dollars while endangering the health and safety of our communities,” said Attorney General Pam Bondi in the press release.
Other High-Profile Cases
The most prominent cases include a $10 billion urinary catheter scheme where foreign straw owners secretly purchased medical supply companies and then used stolen identities and personal health data of more than one million Americans to file erroneous Medicare claims. Known as Operation Gold Rush, the hoax resulted in the arrests of nineteen defendants, including four in Estonia and seven individuals attempting to avoid capture at US airports and at the Mexican border.
In another case involving foreign influence, owners and executives in Pakistan were charged in connection with a $703 million scheme where artificial intelligence (AI) was allegedly used to create fake recordings of Medicare recipients consenting to receive various products. The data was then sold to clinical laboratories and DME companies to fraudulently submit false claims to Medicare. In addition, some of these defendants allegedly conspired to conceal and launder proceeds from US bank accounts to overseas bank accounts.
Also, a defendant who owned a billing company allegedly planned a sham in which Arizona Medicaid was fraudulently billed $650 million for addiction treatment programs where services were never rendered or patients received substandard care. The defendant, who is based in Pakistan and the United Arab Emirates, supposedly received at least $25 million from the scheme and is also charged with a money laundering offense.
“It’s not done by small time operators,” said Mehmet Oz, MD, who leads the Centers for Medicare and Medicaid Services (CMS). “These are organized syndicates who are designing to hurt America.”
Other notable cases include a scam involving $1.1 billion in fraudulent claims for unnecessary amniotic wound allografts for elderly patients resulting in defendants receiving millions in illegal kickbacks. In another scheme, 74 defendants were charged with the illegal distribution of prescription opioids and other controlled substances.
DOJ Property Seizures
As a result of the fraud bust, the US government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets and prevented an additional $4 billion from being paid out by CMS due to false and fraudulent claims.
“These criminals didn’t just steal someone else’s money. They stole from you,” Matthew Galeotti, JD, who leads the DOJ Criminal Division, told the Associated Press. “Every fraudulent claim, every fake billing, every kickback scheme represents money taken directly from the pockets of American taxpayers who fund these essential programs through their hard work and sacrifice.”
This latest bust demonstrates the DOJ’s increased resolve to pursue healthcare fraud, including cases involving clinical laboratory testing. Look for further coverage of this aspect in the 7-14-2025 issue of The Dark Report.
Some of the former employees worked for public health labs involved in tracking HIV, hepatitis, and STDs
More than 450 federal employees who were laid off from the Centers for Disease Control and Prevention (CDC) during the April cutbacks are being reinstated by the Department of Health and Human Services (HHS).
Nearly half (214) worked for the National Center for HIV, Viral Hepatitis, STD, and Tuberculosis Prevention (NCHHSTP), which includes specialized public health laboratories. Another 158 worked at the National Center for Environmental Health (NCEH). Others were employed by the Immediate Office of the Director and Global Health Center.
“I think people are very tacitly hopeful that this means they can get their jobs back and continue serving in ways that they love,” NCEH health scientist Kathryn Sisler, MPH, told NPR. “But there has been so much instability and chaos that I think a lot of people would hesitate to say it is good news.”
Sisler, who works in NCEH’s Division of Environmental Health Science and Practice, received an email notification of her reinstatement on June 11, NPR reported.
She described the rehiring as “a step in the right direction,” but noted that she was among some employees in her division who had moved away from Atlanta, where the CDC is based. “Other employees had taken other jobs or had been offered them,” NPR reported.
In an interview with NPR, Scott Becker, CEO of the Association of Public Health Laboratories, admitted to being “happily flabbergasted” to hear about HHS’ offer to rehire the former federal workers. (Photo copyright: Association of Public Health Laboratories.)
Impact at Critical Labs
As part of the cutbacks, the CDC shut down two laboratories at NCHHSTP that were involved in tracking viral hepatitis and sexually transmitted diseases, even as “some of those scientists performed disease surveillance work unlike any other labs in the world,” NPR noted.
NCHHSTP staffers told NPR that some of the division’s labs were damaged due to the “lapse in activity” during April and May, and that “some disease outbreaks had not been properly tracked.” One employee said that, due to the cutbacks, the division’s hepatitis lab was unable to assist health workers tracking a hepatitis C outbreak in Florida. The CDC employees requested anonymity.
“It’s great to see that there is some recognition of the importance of these workers and that being in those positions is critical for the public health of America and that they are being reinstated in order to continue their important work,” Carmen J. Marsit, PhD, of Emory University’s Rollins School of Public Health, told NPR. He added, however, that “there’s still a lot of people that are not being reinstated.”
HIV Not Being Tracked
KFF Health News reported that the reinstatements included “dozens of HIV experts” who were laid off in April. At the time, they were working on a national survey conducted among 30,000 individuals at risk of acquiring the infection. They haven’t been told if the project will resume.
Public health departments use data from the survey as part of their efforts to reduce spread of the disease, KFF Health News stated, noting that “preventing HIV is far cheaper than treating people once they’re infected.”
Since the cutbacks, many HIV researchers at CDC have obtained new jobs or moved. Some employees “called the reinstatements perplexing because the notices don’t say what they’ll be doing when they return and for how long,” KFF Health News reported.
“I am concerned about how many of the people have already moved on or might move on and the trauma that they really must be going through with the uncertainty,” Scott Becker, CEO of the Association of Public Health Laboratories, told NPR about the reinstatements at CDC. “But all in all, it’s good news and I’ll take it.”
Programs Cut by Mistake
The reinstatements amount to approximately 20% of the 2,400 CDC employees laid off following the March 27 announcement of a massive restructuring at HHS.
HHS secretary Robert F. Kennedy, Jr. told ABC News in early April that some programs had been cut by mistake. “Personnel that should not have been cut were cut—we’re reinstating them, and that was always the plan,” he said.
In May, Kennedy said that 328 employees of the CDC’s National Institute for Occupational Safety and Health (NIOSH) would be reinstated, NPR reported, following “considerable pushback from labor organizations and congressional lawmakers.”
NPR and other outlets had earlier reported that HHS planned to cut at least 900 NIOSH employees, amounting to 90% of the institute’s workforce.
Industry commenters point to a void since the federal government shuttered the Clinical Laboratory Improvement Advisory Committee
For readers wondering what has happened to the Clinical Laboratory Improvement Advisory Committee (CLIAC), the bottom line is the panel has been terminated, causing a significant void for the lab industry at the federal level.
Dark Daily’s sibling brands, including The Dark Report, G2 Intelligence, and Today’s Clinical Lab, have been exploring various aspects about the demise of CLIAC.
The Centers for Disease Control and Prevention (CDC) confirmed to G2 Intelligence that CLIAC was terminated as of March 31, citing an executive order from President Donald Trump intended to reduce federal advisory committees. The decision blindsided even those closest to CLIAC. Incoming committee chairman Jordan Laser, MD, revealed in an email to colleagues that he did not have more insight into CLIAC’s demise beyond media reports, G2 reported.
Since its founding in 1992, CLIAC has played an influential—though non-regulatory—role in shaping updates to the Clinical Laboratory Improvement Amendments of 1988 (CLIA). The committee brought together pathologists, lab directors, public health leaders, and representatives from federal agencies such as the CDC, Centers for Medicare and Medicaid Services, and Food and Drug Administration.
The federal government’s decision to eliminate CLIAC “risks stalling progress in laboratory medicine, which could ultimately hinder efforts to improve patient care,” CAP President Donald Karcher, MD, FCAP, told The Dark Report. (Photo copyright: College of American Pathologists.)
‘Critical Venue’ for Labs Has Been Eliminated
Industry groups are sounding alarms about what comes next. In an interview with Today’s Clinical Lab, Anthony Killeen, MD, PhD, president of the Association for Diagnostics and Laboratory Medicine (ADLM), said CLIAC was an important forum for medical lab scientists to discuss CLIA.
“[CLIAC] served as a critical venue for working through current problems with the rule and also for expert input on how new technologies—such as next-generation sequencing, digital pathology, and artificial intelligence-assisted diagnostics—should be assessed and integrated under CLIA,” Killeen said.
ADLM has formally urged Department of Health and Human Services Secretary Robert F. Kennedy, Jr. to reverse the CLIAC decision. In a May letter, the association emphasized that CLIAC’s work was funded entirely through user fees paid by clinical laboratories rather than taxpayer dollars—a point many in the lab industry say underscores CLIAC’s value.
CAP President Wonders about Future Communication Gaps
The Dark Report noted that the disbanding of CLIAC may cost labs time in certain cases, a commodity that few diagnostic settings have in abundance.
“The absence of this advisory body may lead to gaps in communication and slower response times in addressing [industry] challenges,” Donald Karcher, MD, FCAP, president of the College of American Pathologists (CAP), told The Dark Report.
The absence of CLIAC raises uncertainty for clinical labs because federal agencies have lost a prime source to gather specialized input on complex scientific and operational issues facing the lab industry. Dark Daily’s partner brands will continue to track this matter closely. If you’re not a subscriber, you can check out The Dark Report’s insider coverage with a 14-day free trial.
The federal agency says it will mandate randomized, controlled clinical trials for vaccination of younger, healthy individuals
It’s been a confusing past few weeks in terms of what the general public’s access to COVID-19 vaccinations will be like in the future.
Public health experts have been verbally jousting with the federal Department of Health and Human Services (HHS) about moves its health officials made recently regarding the vaccines. This could put clinical laboratories on the front lines to help determine whether COVID cases—particularly severe ones—eventually rise as a result.
Food and Drug Administration (FDA) commissioner Martin A. Makary, MD, MPH, and Vinay Prasad, MD, MPH, who leads the agency’s vaccine oversight, announced on May 20 that the agency will require randomized, controlled clinical trials before approving COVID vaccines for healthy individuals under age 65.
“While all other high-income nations confine vaccine recommendations to older adults (typically those older than 65 years of age), or those at high risk for severe COVID-19, the United States has adopted a one-size-fits-all regulatory framework and has granted broad marketing authorization to all Americans over the age of 6 months,” Makary and Prasad wrote in NEJM.
Under the new framework, they noted, the agency expects that it will continue to approve vaccines for adults over 65 as well as younger people with health conditions that put them at high risk of severe outcomes from COVID-19.
The range of diseases is “vast, including obesity and even mental health conditions such as depression,” they wrote. “Estimates suggest that 100 million to 200 million Americans will have access to vaccines in this manner.”
In their NEJM commentary, FDA commissioner Martin Makary, MD (left), and Vinay Prasad, MD (right), wrote, “Moving forward, the FDA will adopt the following COVID-19 vaccination regulatory framework: On the basis of immunogenicity—proof that a vaccine can generate antibody titers in people.” (Photo copyrights: Wikimedia Commons.)
Former CDC APIC Member Pushes Back
The announcement drew criticism from public health and medical experts.
“The FDA guidance presented in the NEJM was not released in the Federal Register, did not invite comment, and provided only a general outline for COVID-19 vaccine licensure,” wrote pediatrician and vaccinologist Kathryn M. Edwards, MD, in a commentary for STAT. Edwards is a former member of the Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP), which makes vaccine recommendations to the agency.
On June 9, in an opinion piece for The Wall Street Journal, HHS Secretary Robert F. Kennedy Jr. announced that he’s removing all 17 current members of ACIP.
“The FDA mandate is to ensure safe and effective vaccines based on the clinical studies performed, but not to develop specific recommendations for their use,” Edwards added. “Providing recommendations on vaccine use for the civilian population is the mandate of the ACIP.”
Edwards contended that extensive data is already available on the safety and effectiveness of COVID-19 vaccines. She stated that “there is no precedent for mandating continued placebo-controlled randomized clinical trials for vaccines that have already been licensed.”
New Policy Announcement Raises Questions
The New York Times notes that many questions remain about the specifics of the new policy and how broadly the vaccines will be available.
A likely scenario, the paper reported, is that health insurers will play a role as “gatekeepers by demanding medical documentation of an underlying condition before agreeing to cover the cost.” Without insurance coverage, people would likely pay approximately $140 per shot out of pocket.
This stands in contrast to European countries, where outreach campaigns target specific populations based on public health recommendations. according to Forbes. However, “in virtually all instances, COVID-19 vaccines can be gotten free of charge across Europe regardless of health or age status,” the article notes.
In their NEJM commentary, Prasad and Makary noted that adoption of the annual COVID-19 booster shot is already low. The CDC reported that 23% of Americans 18 and older received vaccinations in the 2024-2025 season, up slightly from 21.6% in 2023-2024.
Kennedy Steps In
On May 27, Kennedy announced in a video on X that the CDC would remove the COVID-19 vaccine from the recommended immunization schedule for healthy children and healthy pregnant women. Previously, the CDC recommended the vaccine for everyone ages six months and older.
Kennedy was joined in the video by Makary and National Institutes of Health director Jay Bhattacharya MD, PhD.
However, CDC staffers were “blindsided” by the announcement, NPR reported, citing an agency official who requested anonymity.
“Hours after the post on X, CDC staffers received a directive from Secretary Kennedy—dated May 19, but sent May 27—rescinding the department’s 2022 acceptance of the CDC’s recommendations for the use of COVID shots in children and during pregnancy,” NPR reported.
It now appears that HHS has at least partially backtracked on Kennedy’s announcement.
The CDC’s immunization schedule now states that vaccination of healthy children should be a matter of “shared clinical decision-making” between the doctor and parent or patient.
“After confusing, mixed messages from leaders at HHS earlier this week, we are relieved to see today that the CDC updated its schedules for child and adolescent immunizations to allow families to maintain the choice to immunize their children against COVID in consultation with their doctor,” American Academy of Pediatrics president Susan Kressly said in a statement from the organization.
In a June 1 interview with the CBS News program “Face the Nation,” Makary confirmed that the recommendation to vaccinate “should be with the patient and their doctor.”
However, he also criticized ACIP as a “kangaroo court where they just rubber stamp every single vaccine put in front of them.”
Insurers continued receiving payments even after beneficiaries moved to other states, the paper reported
As Congress considers cuts in Medicaid funding, The Wall Street Journal reported that Medicaid managed care plans received at least $4.3 billion in duplicate payments over a three-year period, due to recipients who moved from one state to another.
Centene, the largest private Medicaid insurer, collected $620 million in duplicate payments between 2019 and 2021, while Elevance Health received $346 million and UnitedHealth Group took in $298 million, The Journal reported on March 26.
All told, more than 270 insurers received duplicate payments. The paper noted that private insurers handle coverage for 70% of the 72 million Medicaid recipients.
“We may be paying premiums on behalf of an individual who might have moved, and we don’t know that they have moved,” healthcare consultant Caprice Knapp, PhD, told the newspaper. “It definitely is wasteful.”
The reporting was based on an analysis of the Transformed Medicaid Statistical Information System (T-MSIS), a database of beneficiary information maintained by the Centers for Medicare and Medicaid Services (CMS).
In response to a Wall Street Journal article about managed care plans receiving billions in duplicate Medicaid payments, Craig Kennedy, chief executive of Medicaid Health Plans of America, noted how heavily regulated the health insurance industry is. (Photo copyright: LinkedIn.)
Multiple States Paid Double Payments to Medicaid Insurers
“Government guidelines stipulate that if Medicaid recipients move to another state, they are supposed to cancel their coverage in their former state when signing up in the new one, which often gives them a different insurer,” The Journal reported. “But the recipients don’t always cancel, leaving states to play catch-up.”
States paying the highest rates of duplicate payments include Georgia, Florida, and Indiana, according to The Wall Street Journal’s report.
To illustrate how this works, the story used the hypothetical example of a Medicaid recipient in Florida. There, the state pays $291 per month to the private Medicaid insurer. The individual moves to Georgia and enrolls in that state’s Medicaid program. Georgia begins paying an insurer $339 per month. But Florida continues to pay the monthly fee even though the recipient is now receiving medical care in Georgia. (The payment amounts are estimates based on averages in each state, the paper said.)
The state might not know that a beneficiary has moved until it conducts an annual eligibility check, the story noted. In the meantime, insurers “can collect months of payments before a patient is dropped from the rolls.”
To determine if a patient had moved, the analysis looked at where they received medical care. “The data don’t indicate where recipients are actually living or reflect all adjustments later made to payments,” the story noted.
Some insurers criticized the analysis. Most of the three-year period overlapped with the COVID-19 pandemic, when emergency rules made it difficult to disenroll beneficiaries, insurers told The Wall Street Journal. A Centene spokesman said the analysis “ignores the financial safeguards in place to address potential overpayments.” The insurer told the paper that it had repaid $2 billion to the states between 2019 and 2021.
The duplicate payments amounted to $800 million in 2019, then jumped to $1.3 billion in 2020 and $2.1 billion in 2021, the paper reported. KFF, citing CMS data, reported that states spent an estimated $880 billion on Medicaid programs in fiscal year 2023.
Craig Kennedy, chief executive at Medicaid Health Plans of American—an industry group that represents managed care organizations—told The Journal that insurers are closely watched by regulators.
“[Health insurance is] a heavily regulated industry,” Kennedy said. “Following rules and regulations is the No. 1 priority here.”
Office of Inspector General Weighs In
The Wall Street Journal analysis followed an earlier report from the US Department of Health and Human Services’ (HHS) Office of Inspector General (OIG). The OIG report, issued in September 2022, was based on an audit covering Medicaid managed care capitation payments in August 2019 and August 2020. It was also based on data from T-MSIS.
“All 47 States reviewed made capitation payments on behalf of Medicaid beneficiaries who were concurrently enrolled in two States,” the OIG reported. “Specifically, capitation payments were made on behalf of 208,254 concurrently enrolled beneficiaries in August 2019 and 327,497 concurrently enrolled beneficiaries in August 2020. The Medicaid program incurred costs of approximately $72.9 million in August 2019 and $117.1 million in August 2020 for capitation payments associated with beneficiaries in one of the two concurrently enrolled States.”
OIG advised CMS to provide state agencies with T-MSIS enrollment data. CMS dismissed the recommendation, claiming that the Public Assistance Reporting Information System (PARIS), designed to deter improper public assistance payments, was sufficient, and that T-MSIS would add inefficiency and confusion. However, current and former state Medicaid officials told The Wall Street Journal that PARIS “doesn’t always include up-to-date or complete information.”
