CareFirst of Maryland has filed a federal lawsuit alleging a years-long health insurance fraud scheme that resulted in more than $50 million in claims payments. The nonprofit insurer claims an insurance brokerage operation enrolled hundreds of individuals who were not eligible for Maryland-based coverage by using false residency information, fraudulent identities, and supporting documentation.
According to the complaint, the alleged scheme operated from at least 2018 until its discovery in late 2022. CareFirst contends that individuals from outside Maryland and overseas sought access to the insurer’s nationwide provider network, including specialty medical treatment centers across the United States. The lawsuit alleges that Maryland addresses were used to create the appearance of eligibility and that supporting documents were provided when residency questions arose.
The insurer has brought claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), alleging a coordinated enterprise involving multiple individuals and entities. The complaint also alleges that a broader network provided referrals, transportation, lodging, and other support services. CareFirst states that some charitable and religious organizations were connected to the operation, though the lawsuit does not allege that all participants knowingly engaged in wrongdoing.
For claims adjusters, SIU investigators, and fraud professionals, the case illustrates the financial impact that enrollment fraud can have on health insurers. The allegations underscore the importance of residency verification, identity validation, broker oversight, and monitoring for organized fraud activity that may span multiple jurisdictions. The lawsuit also highlights how seemingly legitimate support networks and third-party organizations can complicate fraud detection efforts.
CareFirst is seeking damages and other relief, describing the matter as one of the largest health insurance fraud schemes the company has encountered.
