Why the Healthcare Industry Can not Afford Vendor Fraud

Between 1990 until a few years ago in 2011, the Justice Department reclaimed nearly $3 billion from prosecuting fraudulent activity in healthcare. Millions more was never recovered. Don’t think your practice could be a victim? Even with internal measures in place vendor fraud can still happen. Vendor fraud can take on many forms.


Fictitious vendor schemes are when a perpetrator sets up a company and submits fake invoices for payment or vendors involved in fraudulent activity may even collude with your own employees to help them navigate through your internal controls. Schemes, like this, drain the organization of valuable resources, time and morale.

All vendors are subject to the False Claims Act and should be informed as such. Simple measures like periodically review all vendors within the organization can help guard against fake vendor accounts. Implementing a no purchase order, no payment policy could also be effective. Contact ARA for more details about healthcare fraud and prevention.