Pill-for-Profit: How Opioid Fraud Schemes Continue to Erode U.S. Healthcare

A Nationwide Crisis Amplified by Medical Corruption

On June 29, 2025, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced the largest healthcare fraud enforcement action in American history. The charges involved 324 defendants across 50 federal districts, including 96 licensed medical providers, and resulted in more than $14.6 billion in alleged losses to federal healthcare programs.

The operation—spanning five countries—uncovered an intricate web of fraud involving opioids, durable medical equipment (DME), identity theft, and offshore financial laundering. The DOJ seized $245 million in assets, including luxury vehicles, cryptocurrency, and cash, and estimates an additional $4 billion in future Medicare and Medicaid losses were averted by dismantling this network.

While COVID-19 is often blamed for amplifying vulnerabilities, investigators found the roots of the fraud long predated the pandemic. The fraud ring exploited loopholes in prescribing, billing, and patient identity systems—leveraging pain clinics, home health agencies, and DME companies purchased and operated under foreign influence.

Anatomy of the Scheme: Pills for Procedures

The fraud wasn't just about illegal opioid prescriptions. In one of the most disturbing elements, doctors conditioned access to medications like oxycodone on patient consent to undergo high-priced, unnecessary back surgeries. This practice—coined "pills for procedures"—turned pain clinics into profit mills. Patients, often dependent on opioids, were coerced into risky operations they didn’t need just to maintain access to pain relief. Clinics billed Medicare and Medicaid for both the drugs and the surgeries, maximizing revenue while endangering lives.

Michigan: Ground Zero for a $6.6 Million Opioid Ring

One of the most high-profile convictions occurred in Michigan, where a network of 23 individuals—including doctors, home health providers, and physical therapists—were sentenced in a $6.6 million fraud case that made national headlines. The ringleaders, Francisco Patino and Mashiyat Rashid, used a chain of pain clinics to orchestrate the scheme. They spent stolen funds on real estate, jewelry, sports tickets, and even a private jet. The full list of convicted providers includes:

• Francisco Patino (Owner)
• Mashiyat Rashid (Owner)
• Spilos Pappas, MD
• Tariq Omar, MD
• Abdul Haq, MD
• Steven Adamczyk, MD
• David Weaver, MD
• Glenn Saperstein, MD
• Manish Bolina, MD
• Hussein Saad, MD
• David Yangouyian, MD
• Yousef Almatrahi (Home Health)
• Hina Qazi (Home Health)
• Kashif Rasool, MD
• Tariq Siddiqi (Home Health)
• Tasadaq Ali Ahmad (Home Health)
• Stephanie Borgula (Physical Therapist)
• Meiuttenum Brown, MD

Sentences ranged from six months to 15 years in prison, with restitution demands reaching up to $51 million.

Complicit Pharmacies were Silent Enablers

Although the prescribing physicians were the focal point of the scheme, pharmacies played a critical role in perpetuating the fraud. Each dispensed prescription was logged, timestamped, and traceable—yet few flags were raised. Under Medication Therapy Management (MTM) protocols, pharmacists are responsible for assessing drug appropriateness, monitoring potential abuse patterns, and providing feedback to prescribers. In many of these cases, due diligence was either bypassed or ignored. Whether through willful blindness or lax oversight, the failure of pharmacy systems to detect irregularities allowed fraud to flourish.

Human Cost: Overdose and Trust

More than 100,000 Americans died of drug overdoses in 2021, with opioids contributing to the majority of those deaths. As the pandemic strained public health systems, bad actors took advantage of the chaos—using the crisis as cover for increasingly brazen fraud. According to the U.S. Attorney General, "These are crimes that make this country’s opioid crisis even worse." Beyond financial loss, these schemes deepen distrust in medical institutions and delay access to legitimate care.

What Payers and Regulators Must Watch For

For payer organizations and SIU teams, this case offers urgent lessons in fraud detection and policy design:

• Unusual billing patterns for opioid prescriptions and outpatient surgeries
• Frequent co-location of pain clinics, pharmacies, and DME suppliers
• Prescribing activity not aligned with patient history or clinical necessity
• Clusters of patients undergoing identical back procedures within short timeframes
• Lack of pharmacist intervention despite high-dose or duplicate medications

Systems like Virtual Examiner® can flag these anomalies through AI-assisted logic and relationship mapping. Providers with repeat patients, recurring opioid scripts, or identical surgical codes are strong audit candidates.

From Case Study to Compliance Strategy

This case is more than just a cautionary tale—it’s a playbook for fraud prevention. Organizations must adopt predictive, real-time review systems capable of surfacing these red flags before payment is made.

With the right technology and internal governance, payer teams can prevent losses, protect patients, and hold bad actors accountable.