Stamping Out A New Fraud Scheme

Healthcare fraud, waste, and abuse (FWA) is an epidemic that costs our nation at least $270 billion every year. These costs are borne by plans, employers, providers, members – all of us. In spite of industry efforts to stop it, FWA is such a persistent problem in part because those who perpetrate fraud continuously search for new ways to divert money and prescription drugs without getting caught.

In early 2019, MedImpact’s FWA team was among the first to detect anomalous claims associated with a new fraud scheme related to diabetic footbaths. Months before the Department of Health and Human Services, Investigations and Audit Group released a wide-scale HPMS Memo on this activity, MedImpact had already held one pharmacy accountable and had a handful of other pharmacy investigations underway.

Our Approach

Using a combination of data analytics, artificial intelligence, and manual claims reviews, the MedImpact team spotted unusual volumes of prescriptions being filled for diabetic footbaths. These included:

  • Abnormal quantities, days of supply, and package sizes of prescription drugs
  • Medications being dispensed in combination with other flagged medications
  • Overall costs paid were significantly higher than typical benchmarks

MedImpact pharmacists reviewed the claims and determined that the prescription drug combinations were unusual and excessive. CMS recently confirmed that these prescription drug combinations not only provided little to no clinical benefit for people with diabetes-related foot conditions, but they could be harmful to members’ health.

Our team then immediately began an investigation into these claims and identified several pharmacies that were responsible for submitting a disproportionate number of diabetic footbath claims.

The Results

To date, we have concluded five cases, resulting in a quarter million dollars in findings. This scheme is currently the top FWA pharmacy issue in America that is non-opioid related, and we are pleased to have identified and addressed the scheme early – not only to save our clients on cost, but to help combat a potentially harmful treatment for members.

The MedImpact FWA team continues to monitor for new unusual activity and has dozens of additional audits underway, with claims in excess of one million dollars. Pharmacies active in the MedImpact network have been warned that MedImpact will continue aggressively reviewing claims and that actions will be taken against pharmacies suspected of inappropriate billing.

To learn more about how MedImpact helps healthcare payers identify and combat FWA, email us at or visit

  • Email