Medicare is barring 11 medical equipment suppliers from getting paid by the program after regulators traced more than $3.4 billion in suspicious billing back to the companies, the Centers for Medicare & Medicaid Services announced this week. The suppliers, all in the durable medical equipment, prosthetics, orthotics and supplies category, will no longer receive Medicare Advantage or Part D payments while the cases are reviewed.
CMS said the companies shared a pattern: several had filed no Medicare claims at all before 2025, then suddenly began billing in bulk. One Florida-based supplier submitted about $18.4 million in catheter claims over two consecutive days in December 2025, covering more than 1,200 beneficiaries combined. A Texas company billed roughly $5.5 million for orthotic devices; when investigators reached beneficiaries listed on the claims, several said they had never heard of the company or requested any equipment. A New Jersey firm billed for 38 patient encounters that occurred after the beneficiaries had already died.
Why does this matter to people on Medicare?
Fraudulent billing does not just cost the government money. It drives up costs across the Medicare Advantage and Part D system, which are funded in part through premiums and cost-sharing paid by beneficiaries. It can also leave real patients tangled in paperwork disputes if a supplier used their name or Medicare number without their knowledge. Anyone who notices unfamiliar equipment charges on a Medicare Summary Notice or Explanation of Benefits is encouraged to report it to their plan or to the Medicare fraud hotline at 1-800-MEDICARE.
CMS Administrator Dr. Mehmet Oz said the agency is treating the deceased-beneficiary billing cases as a particular priority. “Fraudsters who take advantage of the recently deceased to line their pockets represent a level of indecency that we will not stand for,” Oz said in the agency’s announcement.
The action was taken using CMS’s payment-suspension authority, which lets the agency freeze money before it reaches a supplier rather than trying to claw back payments afterward. CMS said it worked with the Department of Health and Human Services Office of Inspector General on the reviews and has placed all 11 companies on its Preclusion List, which blocks them from billing Medicare Advantage or Part D plans for prescriptions, equipment or services.
What happens to the suppliers now?
Being placed on the Preclusion List does not automatically mean criminal charges are filed. It is an administrative step that cuts off future payments while HHS-OIG and CMS continue examining the billing history. Companies can appeal a preclusion determination, and any criminal referrals would move through the Department of Justice separately. CMS has not released the names of all 11 suppliers publicly in full detail, though it described the enforcement as part of a broader push against a persistent source of DMEPOS fraud in the durable medical equipment sector, an area regulators have flagged for years because suppliers can bill for items shipped directly to a patient’s home with limited in-person verification.
The agency said beneficiaries who believe they were billed for equipment they never ordered should keep any paperwork they received and contact their plan directly, since documentation from patients has already helped investigators confirm several of the cases in this round of enforcement.
Sources: CMS press release, “CMS Cracks Down on Massive $3.4 Billion Medical Equipment Supplier Fraud Scheme” · Medical Laboratory Observer, “CMS bans 11 companies for $3.4 billion Medicare fraud in DMEPOS sector”
