Investigating Healthcare Profiteering Class Action Lawsuits

The healthcare fraud and whistleblower lawyers at The Lyon Firm are reviewing a list of the most damaging instances of fraudulent corporate tactics and profiteering in the healthcare industry, as compiled by the staff of the Lown Institute, an independent healthcare think tank.

Each year, the staff at Lown takes suggestions from readers, consumer protection activists, clinicians, health policy experts, and journalists to shed light on egregious examples of profiteering and dysfunction in American healthcare. Below is a list of the top ten 2024 so-called “winners” of healthcare fraud.

Selling Body Parts of Deceased Without Consent

An NBC News investigation uncovered a scheme in which the University of North Texas Health Science Center (UNTHSC) in Fort Worth dissected and distributed unclaimed bodies of the deceased without properly seeking consent from families, many of whom were not difficult to reach.

The research center allegedly supplied body parts to medical students as well as large corporations like Medtronic and Johnson & Johnson. Following the investigation, the state of Texas, several companies and the school announced major changes in policy to deter other organizations from repeating such a disturbing practice. One lawmaker pitched a bill to prohibit the use of people’s bodies for research unless they or their survivors give full consent.

Each state law varies in the handling of unclaimed dead bodies, though many reports have suggested that some healthcare entities try to profit from the dead, just as some try to take advantage of living patients. This is a morbid business, and one that not many in the legal world tolerate. Any family who has had their loved one’s remains misused or tampered with may have a claim against any negligent party.

Frenectomy For Profit

A frenectomy is a procedure to treat lip-tie or tongue-tie, which can occur naturally when a baby is born with frenulum that is too short or tight. Despite a lack of evidence showing effectiveness, some medical professionals have argued that such a condition can make it difficult for individuals to speak or breastfeed properly, and can lead to issues like cavities, gum disease and even sleep apnea.

A frenectomy is a relatively simple procedure, typically performed by dentists, that involves cutting or altering the frenulum, which can be done with a scalpel, electro cautery, or a laser in only 15-30 minutes.

As with any surgical procedure, there are risks, including bleeding and infection. Serious complications are rare, but some babies can experience enough pain that they refuse to eat, become malnourished, and require hospitalization. Most parents pay for the procedure out of pocket, is rarely covered by basic health insurance, and it may cost as much as $900. With such a high cost, and not an abundance of overwhelming evidence to support the benefits, many are beginning to wonder if all the ordered frenectomy procedures are really necessary. Our lawyers have filed unnecessary surgery lawsuits on behalf of several plaintiffs.

Medical Device Deceptive Billing Practices

Zynex Medical, a company specializing in nerve stimulation devices used for pain management has faced criticism over the company’s billing practices that make it appear the device is covered by an individual’s health insurance policy, but the patients soon have to pay out-of-pocket for expensive, unsolicited supplies like extra batteries and electrode pads, often in quantities that far exceed what is necessary. One source has reported that almost 70 percent of Zynex’s revenue in 2023 came from batteries and electrode pads.

Many patients have reported getting stuck with surprise medical bills because their insurance will not cover the Zynex device. One former employee claimed that Zynex’s billing department is instructed to automatically bill and ship supplies, only to cease charging if a patient or insurance carrier contacted them. Deceptive billing lawsuits are quite common, and several healthcare companies have been named as defendants in dozens.

Medicare Overbilling Fraud

Medicare fraud is not uncommon, and some estimates say the collective lost on fraud and medicare overbilling costs taxpayers around a whopping $60 billion a year. Last year, some authorities were alerted to a huge upsurge in billing for urinary catheters, and as many as 450,000 Medicare patients had bills for $2 billion worth of catheters submitted on their behalf in 2023, representing a massive increase over previous years.

Cancer Treatment Denials

Some hospitals and clinics have faced allegations of refusing cancer treatment to patients or demanding payment upfront before any treatment, even from individuals with health insurance. The financial assistance policies of some hospitals, which once included cancer treatment, have apparently been altered to exclude it. A delay in cancer treatment could drastically alter the course of an individual’s prognosis in some serious cases.

Unnecessary Cancer Treatments

On the other extreme of medical malpractice, some patients have allegedly been subjected to unnecessary cancer treatments. In one case, after a patient’s death following cancer treatment, a medical examiner found no sign of cancer and reported that a chemotherapy drug was the likely cause of death. Why would a doctor be inclined to treat patients with expensive and potent cancer drugs? Well, clearly this is yet another instance of overbilling fraud and healthcare profiteering. The longer a patient is deemed ill, the more the healthcare industry can bill an insurance company.

In another case, a drug company was found to market a cancer drug at a higher dosage than necessary, ostensibly to sell more of the drugs to hospitals and end-consumers of the product. The strategy of pursuing a maximum tolerated dosage is not only irresponsible on a financial level, but dangerous for patients likely to experience more side-effects from higher dosages of pharmaceuticals.

UnitedHealth Accused of Applying Pressure to Physicians

The same health insurer at the center of media attention in late 2024 has been accused of allegedly pressuring physicians to maximize profits, often at the expense of patients. Doctors who work under the UnitedHealth network have reported pressure to reduce time with patients and to allegedly practice unscrupulous medical coding tactics that make patients appear more sick than they actually are. The company denies any wrongdoing.

If you have been a patient or work in the healthcare industry and have first-hand accounts of similar medical fraud and healthcare profiteering, contact our consumer protection and whistleblower attorneys to discuss your legal options.