Author: Hunter J. Brown, CAMS
On March 30, 2026, FinCEN issued Advisory FIN-2026-A001 in coordination with the FBI and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), urging financial institutions to sharpen their focus on health care fraud schemes targeting Medicare, Medicaid, and other federal and state health care benefit programs. The advisory is not a new regulatory requirement, but it carries real exam weight and the red flags it outlines have direct implications for how institutions should monitor their health care provider and supplier customer base.
The numbers behind this advisory are hard to ignore. FinCEN observed a 330% increase in health care fraud BSA reporting between 2020 and 2025, peaking at over 3,800 initial SARs in 2025 alone. The Treasury's 2026 National Money Laundering Risk Assessment (which we discussed in our Q1 2026 clients-only BSA/AML/CFT webinar) identifies health care fraud as one of the largest sources of illicit proceeds in the United States, and fraud remains a named AML/CFT National Priority. FinCEN acknowledges that even those record-filing numbers likely represent only a fraction of actual activity.
The schemes described in the advisory generally follow a predictable pattern. Illicit actors (increasingly transnational criminal organizations) use straw owners, stolen physician identities, and shell companies to register as health care providers or suppliers with Medicare and Medicaid programs. They open bank accounts under the appearance of legitimate medical businesses, begin submitting fraudulent claims, and then immediately launder the reimbursements once payment hits the account. Common laundering methods include outgoing wires to shell companies, transfers to virtual asset service providers (VASPs) and online betting platforms, cash withdrawals, and international wire transfers. The billing fraud itself takes several forms: phantom billing for services never rendered, double billing, upcoding, unbundling, and billing for medically unnecessary services.
Most community financial institutions are not banking large DME suppliers or home hospice networks, but the red flags in this advisory are broader than they might initially appear. Any institution banking medical practices, pharmacies, laboratories, adult day care centers, telemedicine companies, or medical supply businesses should take a close look at how those accounts are being monitored.
Action Steps for Financial Institutions:
For more detailed information, please view the FinCEN press release here: Treasury Targets Fraud Schemes Exploiting Government Health Care Benefits | U.S. Department of the Treasury
Advisory: FinCEN-Advisory-Health-Care-Fraud.pdf
On March 30, 2026, FinCEN issued Advisory FIN-2026-A001 in coordination with the FBI and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), urging financial institutions to sharpen their focus on health care fraud schemes targeting Medicare, Medicaid, and other federal and state health care benefit programs. The advisory is not a new regulatory requirement, but it carries real exam weight and the red flags it outlines have direct implications for how institutions should monitor their health care provider and supplier customer base.
The numbers behind this advisory are hard to ignore. FinCEN observed a 330% increase in health care fraud BSA reporting between 2020 and 2025, peaking at over 3,800 initial SARs in 2025 alone. The Treasury's 2026 National Money Laundering Risk Assessment (which we discussed in our Q1 2026 clients-only BSA/AML/CFT webinar) identifies health care fraud as one of the largest sources of illicit proceeds in the United States, and fraud remains a named AML/CFT National Priority. FinCEN acknowledges that even those record-filing numbers likely represent only a fraction of actual activity.
The schemes described in the advisory generally follow a predictable pattern. Illicit actors (increasingly transnational criminal organizations) use straw owners, stolen physician identities, and shell companies to register as health care providers or suppliers with Medicare and Medicaid programs. They open bank accounts under the appearance of legitimate medical businesses, begin submitting fraudulent claims, and then immediately launder the reimbursements once payment hits the account. Common laundering methods include outgoing wires to shell companies, transfers to virtual asset service providers (VASPs) and online betting platforms, cash withdrawals, and international wire transfers. The billing fraud itself takes several forms: phantom billing for services never rendered, double billing, upcoding, unbundling, and billing for medically unnecessary services.
Most community financial institutions are not banking large DME suppliers or home hospice networks, but the red flags in this advisory are broader than they might initially appear. Any institution banking medical practices, pharmacies, laboratories, adult day care centers, telemedicine companies, or medical supply businesses should take a close look at how those accounts are being monitored.
Action Steps for Financial Institutions:
- Review your health care provider and supplier customer base and assess whether those accounts have been appropriately risk-rated given the typologies described in this advisory.
- Incorporate health care fraud indicators into transaction monitoring scenarios, paying particular attention to newly opened or recently purchased health care entities receiving large reimbursements quickly; reimbursements immediately forwarded to related shell companies; high reimbursement volume with little to no corresponding business expenses; spiked billing patterns; and cash withdrawals correlated with billing increases.
- Familiarize your compliance team with the Medicare Administrative Contractors (MACs) that serve your geographic footprint — MAC payment descriptors may appear in ACH transaction data and can be a useful monitoring trigger.
- When filing applicable SARs, include the key term "HCF-2026-A001" in both SAR Field 2 (Filing Institution Note to FinCEN) and the narrative, and select SAR Field 34(g) — Healthcare/Public or Private Health Insurance — along with Fields 36 and 38 as applicable.
- Where straw owner activity is suspected, FinCEN specifically encourages institutions to include surveillance footage as supporting documentation for the SAR filings. This would be provided if law enforcement requested it and should be noted in the narrative.
- Ensure your CDD and EDD program adequately addresses health care providers and suppliers as a customer segment, including expected transaction activity and triggers for enhanced review.
- Consider whether your institution's 314(b) information sharing participation could support investigations involving health care fraud, particularly where multiple institutions may be seeing related activity.
For more detailed information, please view the FinCEN press release here: Treasury Targets Fraud Schemes Exploiting Government Health Care Benefits | U.S. Department of the Treasury
Advisory: FinCEN-Advisory-Health-Care-Fraud.pdf
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