Key Takeaways
- A recent FinCEN report identified approximately $17.5 billion in suspicious financial activities potentially linked to healthcare fraud between March 1, 2025 and February 28, 2026
- Home healthcare providers were the most frequently named provider type, while FinCEN also indicated hospice, behavioral health and addiction treatment, medical equipment, and daycare providers are recurring areas of concern.
- The findings build on FinCEN’s March 2026 healthcare fraud advisory, which summarized common fraud and money laundering schemes and provided financial institutions with specific red flags for detecting suspicious activity.
- Healthcare fraud remains an enforcement priority for FinCEN and Treasury, and Bank Secrecy Act (BSA) reporting is another source for identifying potential fraud.
On September 9, the U.S. Department of the Treasury announced that the Financial Crimes Enforcement Network (FinCEN) had identified approximately $17.5 billion in suspicious financial activity potentially connected to healthcare fraud. Part of the Treasury Department, FinCEN has primary responsibility for administering and enforcing U.S. anti-money laundering laws such as the Bank Secrecy Act (BSA).
The finding is from a new FinCEN Financial Trend Analysis (FTA) examining BSA reports related to suspected healthcare fraud. In addition to summarizing the volume and amount of suspicious payments, the FTA details providers, patterns, and fund flows most often involved in such payments.
The FTA is FinCEN’s second major publication focused on healthcare fraud this year. In March, FinCEN issued an advisory warning financial institutions (the Advisory) about fraud schemes targeting Medicare, Medicaid, and other federal and state healthcare benefit programs. For more information about that action, please review this April 2026 article. Together, the publications paint a clear picture of the financial activity on which FinCEN and law enforcement are focused and underscore the extent to which – as we discussed in this September 2026 article – the government is using data-driven initiatives to further enforcement efforts.
FinCEN Finds $17.5 Billion in Potentially Fraudulent Activity
The FTA reflects FinCEN’s analysis of a large dataset: 5,702 BSA reports, from 471 financial institutions, filed between March 1, 2025, and February 28, 2026. The reports identified approximately $17.5 billion in suspicious activity, including both completed and attempted transactions. The average reported amount was approximately $3.3 million per filing, while the median was approximately $600,000.
Depository institutions, e.g., banks and financial cooperatives such as credit unions, are front and center, as they filed approximately 89% of the reports in the dataset FinCEN reviewed and accounted for nearly 87% of the reported suspicious activity amounts. Two large depository institutions alone filed 29% of all healthcare fraud-related reports.
FinCEN also found that suspected fraud frequently involved payments from multiple sources. Potentially fraudulent providers often received funds from some or all of Medicare, Medicaid, state programs, and/or private insurers, rather than simply from one single payment program. Medicare payments frequently originated from Medicare Administrative Contractors, while Medicaid payments generally originated from state-level administrators.
The activity was overwhelmingly domestic, and involved all 50 states, Puerto Rico, Guam, and the U.S. Virgin Islands. FinCEN did not observe any instance of money being sent from a U.S. government health agency directly to a recipient outside the United States.
Home Healthcare Is Significant But Not the Only Area of Concern
In the FTA, home healthcare is the most frequently reported line of business: such businesses were identified as the suspected fraudulent provider in 20% of all healthcare fraud-related BSA reports. Most home healthcare businesses identified in the FTA were registered at residential addresses.
In terms of frequency, home healthcare was followed by hospice providers (identified in approximately 8% of BSA reports), mental and behavioral health and addiction treatment providers (in approximately 7% of reports), medical equipment providers (in approximately 5% of reports), and adult and child daycare providers (in approximately 3% of reports).
The FTA cites Centers for Medicare & Medicaid Services (CMS) data estimating a 9.5% improper payment rate for home health and hospice payments in 2025, totaling approximately $2.8 billion. Notably, CMS’ underlying data shows that the vast majority of these “improper payments” stem from insufficient documentation, medical necessity questions, and other administrative errors.
How Do Fraudulent Healthcare Payments Move Through the Financial System?
The flow of funds after providers receive healthcare reimbursements was another major focus. FinCEN observed suspected proceeds being transferred among related companies; moved through circular transactions; paid to individuals; or spent on personal items such as real estate, travel, luxury purchases, and other expenses unrelated to legitimate healthcare operations. In a small number of cases, funds were transferred internationally, though in many cases funds may have been transferred internationally after initial receipt.
In its review, FinCEN identified potential connections to larger fraud rings or criminal networks in a small portion of Suspicious Activity Reports (SARs). Importantly, however, the FTA states that most filers did not specifically identify connections to known transnational criminal organizations, even where the reported activity suggested broader criminal networks or foreign connections.
Findings Build on FinCEN’s Healthcare Fraud Advisory, Underscore Compliance Red Flags
The FTA augments the Advisory, which urged financial institutions to identify and report suspicious transactions involving government healthcare benefit programs. The Advisory also noted that BSA reporting associated with healthcare fraud had increased 330% between 2020 and 2025, with a record of more than 3,800 initial SARs identifying healthcare- or health insurance-related suspicious activity in 2025.
The Advisory identified several recurring schemes. These included using straw owners and shell companies to establish or acquire healthcare providers; submitting claims for nonexistent, unnecessary, or substandard services; and paying kickbacks or bribes for patient referrals or prescriptions. The Advisory also highlighted means of money laundering of fraud proceeds through domestic and international financial channels, including transfers to shell companies, virtual asset service providers, broker-dealers, online betting platforms, money mule accounts, and foreign financial institutions, as well as cash withdrawals and purchases of real estate and luxury goods.
The Advisory also detailed red flags, including the following:
- Established providers receiving unusually large reimbursements.
- Significant increases in reimbursement following changes in ownership.
- Providers receiving large government payments with little evidence of legitimate operating expenses.
- Sudden spikes in billing.
- Unexplained cash withdrawals.
- Significant transfers to foreign jurisdictions.
It is important to recognize that a red flag by itself does not mean that fraud or money laundering has occurred. Likewise, the filing of a SAR does not establish that a crime has occurred. Criminal money laundering requires proof of additional elements, including connection to criminal proceeds and the requisite knowledge and purpose. But these red flags mean further investigation is warranted.
Notably, the FTA does not directly reflect any impact of the Advisory, since the data underpinning the FTA was collected until February 28, 2026, about one month before the Advisory was issued. FinCEN nevertheless stated that trends observed in BSA reports filed after issuance of the Advisory have been consistent with those identified in the FTA.
What FinCEN’s Healthcare Fraud Report Means for Providers and Banks
The FTA offers clear evidence that BSA reporting is increasingly being used to identify potentially fraudulent healthcare providers and trace payments after they enter the financial system. The FTA emphasizes that BSA reports provide law enforcement with valuable financial intelligence that might not otherwise be available.
For financial institutions, the findings in the FTA matched with the red flags identified in the Advisory underscore the importance of special scrutiny of customers operating in home healthcare, hospice, behavioral health, addiction treatment, medical equipment, and other high-risk segments.
At the same time, these indicators are starting points, not conclusions. An unusual fact or pattern alone does not establish that underlying claims were fraudulent or that the funds were criminal proceeds. Assessing potential fraud or money laundering requires examining the services, claims, business purpose, and surrounding facts, as well as the elements of the particular offense.
Healthcare providers and other companies receiving Medicare, Medicaid, or similar government payments should also take notice. Transaction patterns that do not match a provider’s stated business, rapid transfers to affiliated entities, unexplained changes in reimbursement volumes, limited evidence of ordinary healthcare expenses, and payments for personal or unrelated purposes may not only create traditional fraud or False Claims Act concerns but also generate suspicious activity reporting that can provide federal investigators with additional leads. FinCEN’s latest analysis adds another dimension to the government’s broader focus on identifying and pursuing fraud involving taxpayer-funded healthcare programs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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