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Wisconsin Woman Indicted for Million-dollar Fraud Scheme

— July 4, 2024

The DOJ cracked down on fraud as part of a two-week nationwide taskforce investigation.

Prosecutors announced last week the indictment of Lori Butts, a 47-year-old Wisconsin woman, allegedly at the center of a $1.4 million health care fraud scheme. The move was made as part of a larger effort led by the United Stated Department of Justice (DOJ) to crack down on fraud within the health care system.

Called the National Health Care Fraud Enforcement Action, the agency engaged in a two-week focused, nationwide initiative aimed at identifying and prosecuting individuals involved in fraud and opioid abuse schemes. So far in 2024, this has resulted in criminal charges brought against 193 defendants who, together, were charged with more than $2.75 billion in alleged false billings.

With cyberattacks occurring left and right, compromising protected health information (PHI) and other sensitive data, underhanded pain clinics dishing out opioids to turn a profile, public health warnings of fake pills circulating the market, money laundering schemes, and other fraudulent activities, it seems this industry has been particularly susceptible to unlawful acts as of late. Thus, it’s difficult for patients to trust that their information will be kept secure and that providers will do what they’re supposed to.

According to the U.S. Attorney’s Office, Butts, in particular, has been charged with eight counts of health care fraud and eight counts of wire fraud stemming from allegations that she submitted counterfeit billings to Wisconsin Medicaid and the Centers for Medicare and Medicaid Services through her company, attempting to get reimbursed for staffing services at adult family homes that ever actually happened. Butts’ then used this money for personal gain. If convicted, the businesswoman will receive 10 years in prison for each count of health care fraud and up to 20 years in prison for each count of wire fraud in addition to facing fines of up to $250,000 for each count.

Wisconsin Woman Indicted for Million-dollar Fraud Scheme
Photo by Karolina Kaboompics from Pexels

Health care fraud schemes are so egregious, the agency drove home, not only because they defraud government programs, but they also reduce trust in the overall health care system. They can also increase service costs and reduce resource availability and overall quality of care. Reducing resources is particularly concerning as the government already reduced the availability of Medicaid funds with the signing of the Consolidated Appropriations Act at the end of 2022.

During the height of the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) was enacted, and this included a provision to maintain continuous enrollment in Medicaid, meaning individuals enrolled in Medicaid could not be disenrolled during the public health crisis. In order to further support this effort, the U.S. government provided matching funds to states, increasing federal share of Medicaid spending. Then, in 2022, the Consolidated Appropriations Act began to phase down these efforts. A significant number of individuals and families who relied on this support lost access to Medicaid or had their funds greatly reduced as a result of states losing the federal cushion.

Individuals like Wisconsin woman Lori Butts, who take advantage of the health care system, only further restrict quality services for those who truly need them. Fraudulently received government funds means there are even less available for those with legitimate health struggles.


DOJ charges 193 people, including doctors and nurses, in $2.7B health care fraud schemes

Health care fraud, Wisconsin woman indicted in $1.4M scheme

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