Healthcare Fraud Losses Hit Record Highs in Q1 2024

Americans lost over $16 million in Q1 2024 to various types of healthcare fraud. U.S. citizens submitted 16,396 healthcare fraud reports to the FTC, of which 53% indicated losing money.

The median reported loss was $258. Most victims were contacted through phone calls and used credit cards as a payment method.

Most reports originated from Florida. The FTC received 1,562 complaints from people living in the Everglade State.

Chart of reported healthcare fraud looses 2019 to 2024 with 2024 Q1 of 16M losses

The largest portion of the losses — $12 mil — fell under the medical treatments & cures fraud category.

In Q1 2023, losses under the same category stood at barely $1 mil, which means that medical treatments and cures fraud increased by 1,100% YoY.

Another $3 mil was reported lost by Americans to scams under the diet products, plans & centers category.

The remaining $1 mil was swindled out of the pockets of U.S. citizens by scam actors selling medical insurance & discount plans.

Overall, the upward trend in healthcare fraud began in Q4 2023 when losses rose to $10.2 mil, representing an almost 4x growth compared to losses in Q3 2023.

Since 2019, Americans have lost $113.6 mil to healthcare fraud.

Case study of medical insurance fraud

In a press release published on February 9, 2024, the Federal Trade Commission states achieving a significant legal victory by obtaining a $195 million judgment against Simple Health Plans LLC and its CEO Steven J. Dorfman.

The judgment was issued over allegations that they misled consumers by selling fake healthcare plans that lacked the promised coverage and benefits, leaving customers effectively uninsured and vulnerable to unlimited medical costs.

This court action stemmed from a complaint the FTC filed in 2018, accusing the Florida-based Simple Health of deceiving consumers into believing they were purchasing comprehensive health insurance. This supposed insurance was marketed as covering pre-existing conditions, prescription drugs, primary and specialty care, hospital and emergency services, surgical procedures, and medical tests.

However, it turned out that most enrollees, who paid as much as $500 per month, received nothing more than a medical discount program or an extremely limited benefit plan that failed to deliver the promised benefits. As a result, many faced thousands of dollars in uncovered medical bills or were even unable to access necessary healthcare services.

Further legal outcomes included a mandate for liquidating all assets related to Simple Health, which had been frozen since November 2018. The proceeds from these assets are expected to be used by the FTC to refund the deceived consumers.

Preventing health scams

The FTC advises following these six guidelines to avoid falling prey to healthcare scams:

  1. Do your research. Search online using the treatment or product name with terms like ‘review,’ ‘complaint,’ or ‘scam.’
  2. Consult your doctor. Before trying a new treatment or product, discuss it with your doctor or healthcare provider.
  3. Beware of unproven products. Unproven products can be dangerous, possibly causing you to delay or stop proven medical treatments. They might also cause adverse interactions with your current treatments or prevent beneficial lifestyle changes.
  4. Guard against false hope. Be skeptical of any product or treatment that guarantees health outcomes. Always verify claims with your healthcare provider.
  5. Understand ‘natural’ claims. Just because a product is labeled as ‘natural’ does not mean it is safe or effective. Natural products can also interfere with medically recommended treatments.
  6. Know the law on advertising. Sellers must have scientific evidence to support their health claims, and ads should be truthful and not misleading. However, be aware that no government agency pre-approves advertisements before publication.

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