FinCEN Warns of Growing Hospice Fraud Threat as Criminal Networks Exploit Healthcare Programmes

The US Financial Crimes Enforcement Network, FinCEN, is warning financial institutions about a growing healthcare fraud threat involving the exploitation of hospice care services and government-funded health programmes.

The warning follows a FinCEN engagement with law enforcement agencies and financial institutions focused on emerging schemes targeting Medicare, Medicaid and other federal and state healthcare benefit programmes. Authorities examined financial crime typologies, red flag indicators and ways to improve detection of hospice-related fraud.

FinCEN said healthcare fraud is growing in both scale and complexity and is increasingly connected to domestic fraud networks and transnational criminal organisations seeking to exploit government healthcare programmes.

The agency’s concern extends beyond fraudulent medical claims. Its healthcare fraud advisory identifies schemes involving supposedly legitimate healthcare providers and suppliers, including home healthcare and hospice companies, pharmacies, laboratories and other businesses.

Criminal actors may acquire existing companies already registered with healthcare benefit programmes and use them to submit fraudulent claims. Others may obtain beneficiary information and use it to claim reimbursement for medical care that was nonexistent, exploitative, substandard or medically unnecessary.

For financial institutions, the issue is increasingly a financial crime problem rather than simply a healthcare enforcement matter.

Fraud proceeds can move through business accounts, personal accounts and other financial channels, creating opportunities for banks to identify unusual payment patterns and links between apparently legitimate healthcare businesses and criminal networks.

FinCEN is encouraging financial institutions to remain alert to the typologies and red flags contained in its healthcare fraud advisory and to use financial intelligence to support law enforcement investigations.

The agency has also been strengthening cooperation between financial institutions and law enforcement, including training on how Bank Secrecy Act data can be used to investigate fraud.

The broader compliance message is clear. Healthcare fraud can generate significant illicit proceeds, and the financial system is often where those proceeds become visible.