DOJ Credits AI Tools in Historic Healthcare Fraud Crackdown

The healthcare sector is hardly a simple one. And its vast and fragmented ecosystem of providers, payers and platforms can make it fertile ground for scams.

On Monday (June 30), the U.S. Justice Department announced the results of its 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants. Ranging from telemedicine scams and genetic testing fraud to massive durable medical equipment (DME) kickback networks, the investigation uncovered alleged schemes targeting Medicare, Medicaid and other insurance programs to the tune of more than $14.6 billion in intended fraud, shattering the previous $6 billion record.

“Healthcare fraud isn’t just theft — it’s trafficking in trust,” said Acting Administrator Robert Murphy of the DEA in a statement. “We’re targeting the entire ecosystem of fraud — from pill mills in Texas to kickback clinics exploiting Native communities.”

Key to the National Healthcare Fraud Takedown was a new a multi-agency initiative led by DOJ’s Health Care Fraud Unit, called the Health Care Fraud Data Fusion Center, that brings together experts from the Department’s Criminal Division, Fraud Section, Health Care Fraud Unit Data Analytics Team; HHS-OIG; FBI; and other agencies to leverage cloud computing, artificial intelligence (AI), and advanced analytics to identify emerging healthcare fraud schemes.

Read more: Know Your Sector, Know Your Scam: eCommerce Fraud in 2025

Inside the Largest Healthcare Fraud Takedown

The DOJ estimates that over $245 million in tangible assets have been seized, ranging from cash and cryptocurrency wallets to luxury vehicles and high-end real estate. Centers for Medicare and Medicaid Services (CMS) has also moved to suspend and deny payments on over $4 billion in pending claims deemed likely to be fraudulent.

But what makes the recent U.S. DOJ healthcare takedown historic is not merely the dollar amount, but the sheer complexity and breadth of the schemes involved.

Healthcare fraud is not new. From fake doctors to false billing, from counterfeit drugs to fabricated insurance claims, the schemes evolve as quickly as the technologies and policies shaping the industry. But today’s healthcare scams are more sophisticated, more digital, and often disguised as legitimate operations. As costs soar and administrative burdens intensify, recognizing the shape and symptoms of healthcare scams is a strategic imperative for every stakeholder in the ecosystem.

The unique complexity of the healthcare sector makes it fertile ground for scammers: disparate systems, fragmented care delivery, and a labyrinth of coding and claims processes offer thousands of entry points. In this environment, traditional notions of fraud — fake insurance cards or stolen patient identities — have given way to systemic exploitation.

A major differentiator in this year’s health fraud operation was the debut of the Health Care Fraud Data Fusion Center. The use of advanced data mining techniques allowed authorities to move from reactive investigation to proactive detection. Officials could isolate clusters of suspicious activity — such as a single provider billing millions in  telehealth services within a week or a DME supplier sending thousands of catheters to nonexistent addresses — and deploy enforcement teams accordingly.

The centerpiece of the operation, dubbed “Operation Gold Rush,” exposed a transnational catheter supply fraud led by Russian and Eastern European criminal networks. The scheme involved the use of stolen U.S. identities and straw owners to file over $10.6 billion in false claims for urinary catheters. These devices were often never ordered or received by patients, many of whom were unaware their identities were being used in one of the most audacious billing cons ever uncovered.

The center’s launch signals a shift in strategy: healthcare fraud may now be policed more like cybercrime, with an emphasis on continuous monitoring and forensic auditing.

Read more: A Dose of Digital: How Modernizing Payments Is Revitalizing Healthcare

Why Healthcare Scams Are Getting Worse

Several macro trends are intensifying the healthcare scam threat, including the many data breaches that healthcare systems suffer, where stolen identities can fuel a vast underground economy of synthetic billing and fraudulent claims.

The rise of urgent care chains, telemedicine startups, and digital health platforms — while improving access — also widens the attack surface. Vetting every vendor or partner is now a security imperative, not a bureaucratic exercise.

And of course fraudsters are now using generative AI to simulate doctor’s voices, forge documentation, and even mimic clinical imagery.

A recent PYMNTS report, “Healthcare Payments Need Modernization to Drive Financial Health,” dives into the imperative for the healthcare sector to transition away from its entrenched manual payment processes toward sophisticated digital solutions. It details how these outdated systems don’t just create inefficiencies but actively strain revenue. Payments modernization can also help mitigate the risk of paper-based scam schemes.