Insidious scams that physicians should watch out for

By Naveed Saleh, MD, MS | Fact-checked by Barbara Bekiesz
Published September 25, 2023

Key Takeaways

  • Healthcare fraud is big business, and criminals can entangle physicians in their schemes, but there are ways to prevent it. Pharmacists use various clues to detect forged prescriptions. Physicians can keep close tabs on pads, use tamper-proof pads, and utilize electronic prescribing.

  • Even seemingly legitimate opportunities to make money outside of a doctor's clinical duties should be scrutinized for potential fraud by an attorney.

  • Medicare fraud includes billing for extra services and unnecessary tests. Sometimes these crimes are committed by criminal organizations, ensnaring innocent physicians who need to report suspicious activity.

Physicians spend their lives in the compassionate service of others. Ethics and legality are cornerstones of their profession. But there are bad actors out there; fraud comes in many forms and can ensnare any doctor.

The National Health Care Anti-Fraud Association (NHCAA) estimates that healthcare fraud accounts for 3% of healthcare spending.

The government estimates this number is even higher: 10%. In total, healthcare fraud could cost more than $300 billion.[]

Forged prescriptions

Physicians possess the highest prescriptive authority and can prescribe from a seemingly endless pharmacopeia—including controlled substances.[] Prescription is a hard-won covenant for physicians, who toil for years to acquire the knowledge and experience necessary to treat patients with drugs.

The prospect that someone would forge a prescription will put a knot in any provider’s stomach. But it certainly happens.

To advise pharmacists—who serve as gatekeepers in the battle against prescription drug diversion—the DEA offers valuable insights on prescription forgery.[]

Forged prescriptions can come in various forms including prescription pads pilfered from a doctor’s office, forged prescription pads with the drug abuser’s own contact information, prescriptions created for nonexistent physicians, or actual prescriptions that are altered.

Forgery danger signs

Here are some tip-offs that a prescription is bogus:

  • The prescriber writes too many prescriptions or prescribes in excessive quantities.

  • A number of “patients” try to tender scripts from the same physician within a brief period of time.

  • The scripts are for drugs with opposite indications, such as stimulants and depressants.

  • The same patient appears at the pharmacy too frequently.

  • The actual script looks too neat or legible.

  • The quantities, dosages, and routes of administration differ from standard conventions.

  • The script looks photocopied.

  • The script doesn’t contain standard medical abbreviations (eg, bid, PO, qd).

  • The script is written in different colored inks or with distinctive styles of handwriting.

The folks at blogMD offer some good advice on how to protect you and your practice from fraudulent prescriptions.[]

These steps include locking away prescription pads in the office, using tamper-proof prescriptions or gel pens whose ink can’t be washed away, conducting inventory on the number of prescription pads in your domain, and using electronic prescribing.

Bogus schemes

Physicians should be wary of any contract in which they would receive pay for anything other than medical services rendered, according to a lawyer writing in Medical Economics.[]

These investments include leases for space/equipment with ties to referrals; passive investments in healthcare; or contracts with laboratories, drug manufacturers, diagnostic imaging companies, and so forth. Other examples include medical director positions, “speaker” fees, or the “waiving” of patient copays.

"Unfortunately, over the past 10 years or so, I have seen many well-meaning physicians pulled into fraudulent schemes disguised as legitimate business models."

Daniel B. Frier, Esquire

“Usually, the physicians involved were approached by a sophisticated and seemingly well-meaning company with a ‘shiny’ proposal and big law firm opinion of support and assured that dozens or more of their colleagues had signed on," the author added. "BEWARE.”

Such agreements may look legitimate on the surface, but the business models and specifics must be closely reviewed by a lawyer to determine whether they comply with Stark, Anti-Kickback, and the False Claims Act—as well as state laws. A lawyer needs to be retained for fraud and abuse analysis, not merely review of the contract from a business angle.

Repercussions for participating in fraudulent and illegal agreements can be severe.

They could include financial consequences, loss of hospital privileges, dismissal by Medicare/private insurers, and loss of license.

Medicare fraud

Defrauding the federal government is a bad idea. If a physician knowingly does so, there can be criminal, civil, and administrative penalties, with possible fines and imprisonment. But innocent physicians can get wrangled into such fraud.

“Anyone can commit healthcare fraud,” the CMS wrote.[] “Fraud schemes range from solo ventures to widespread activities by an institution or group."

"Even organized crime groups infiltrate the Medicare Program and operate as Medicare providers and suppliers."


Examples of Medicare fraud include the following:

  • Ordering medically unnecessary tests

  • Purposefully billing at higher levels of complexity for services

  • Billing for missed appointments

  • Paying for referrals

Medicare providers who suspect fraud can make a hotline complaint.

What this means for you

Despite any physician’s intentions to remain ethical and legal, fraud exists. Physicians should do their best to avoid scams in their many forms, including promises of “easy money.” If you suspect fraud of any kind, contact the authorities.

Related: Common medical scams that should be on every doctor’s radar

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