Fraud Indicators Toolkit and Crime Alerts

Contact the VAOIG Hotline

The VA Office of Inspector General investigates a wide range of potential crimes—from financial crimes to threats against VA personnel and property to actions associated with patient harm.

The toolkit below provides a list of key possible indicators specific to various types of fraud. The list is far from exhaustive, but it identifies common signs that VA personnel, contractors, and the veteran community should be aware of in order to report suspicious activity and alleged wrongdoing to the OIG hotline.

Crime Alerts

Potential Indicators of Fraud

Disability compensation is a tax-free monetary benefit paid to veterans with disabilities resulting from a disease or injury incurred or aggravated during active military service. Compensation may also be paid for post-service disabilities related to (or secondary to) disabilities occurring in service. Compensation benefits fraud involves individuals’ submission of fraudulent claims for payment. Indicators include the following:

  • The beneficiary is observed engaging in physical activity or employment inconsistent with the nature of their claimed service-connected disability (e.g., maintains a commercial driver’s license when receiving disability compensation for blindness).
  • The beneficiary has a disability rating at the highest level (100% for a service-connected disability) but appears to not be receiving any medical treatment for that condition.
  • A deceased veteran’s benefits are being paid (due to lack of notice, concealment of the death, or administrative error) and appear to be used by ineligible individuals.
  • The monthly benefits payments for multiple beneficiaries are being deposited into the same bank account.
  • The beneficiaries’ method of payment is changed without their knowledge.

VA’s Fiduciary Program was established to protect veterans and other beneficiaries who are unable to manage their financial affairs due to injury, disease, or age-related issues. Fiduciary fraud involves the theft of benefits by a VA-appointed fiduciary to manage VA beneficiaries’ finances in their best interests. Indicators of potential violations include the following:

  • The beneficiary has overdue or unpaid bills or medical copayments, or needs do not appear to be met (insufficient food, medication, clothing, heating, or other expected costs).
  • The fiduciary is secretive or vague about spending or lacks documentation for expenses.
  • The beneficiary’s VA benefits are deposited into an account that is also used for other non-VA deposits (comingled).
  • VA benefits and other government deposits are distributed among various accounts, or checks payable to “cash” are made from the beneficiary’s account.
  • Large or repeated ATM withdrawals and/or in-person withdrawals are made from the beneficiary’s account.
  • The fiduciary appears to be using or borrowing the beneficiary’s VA benefits for their own personal use, particularly when there have been purchases of high-priced vehicles, property, or other goods or services.

VA education benefits help veterans, service members, and their qualified family members with paying for college tuition, finding the right school or training program, and receiving career counseling. Indicators of potential fraud include the following:

  • VA’s GI Bill Comparison Tool includes a warning about the school (e.g., School may not be able to accept new GI Bill students”). See www.va.gov/gi-bill-comparison-tool.va.gov/gi-bill-comparison-tool.
  • Students report that they only need to sign in but not attend classes.
  • Payment is offered to students who register but are not asked to attend any classes.
  • No books, supplies, or exams are required.
  • The instructors teaching the classes are not those advertised.
  • Students report that on completion of the class, they found they lacked the promised skills or certification that would qualify them for employment or advancement.
  • The tuition varies among students for the same course.
  • There is an unexplained increase in the school operators’ wealth or lifestyle.
  • The school has operated for fewer than two years.
  • Regulators have repeatedly found noncompliance with regulations or certifications and have experienced challenges in receiving requested information.
  • The school has a lack of written policies and procedures or has been unable to produce records (sometimes claimed as lost or destroyed).
  • The number of students reported does not align with the number who actually show up or can be confirmed (the creation of nonexistent students on paper).

Healthcare fraud by VA-paid healthcare providers and vendors in the community is the intentional misrepresentation of information to gain payment inconsistent with the type, scope, or nature of the treatment, service, or product provided. Indicators of potential fraud include the following:

  • Unsolicited contacts offer patients free or low-cost medical equipment, compounded medication, genetic testing, or other items or services without regard for medical need and may be approved by a healthcare provider the patient does not know.
  • Patients are induced to receive care or products by waived copayments and the offer of discounts or gift cards.
  • Patients are billed for items that appear excessive or unrelated to treatment, or do not appear to have been provided.
  • Patients receive unauthorized items that require a document confirming a medical need, but not a care provider’s examination (e.g., durable medical equipment, genetic testing, prescription drugs).
  • The patient receives bills and/or Explanations of Benefits (EOB) that include services from a healthcare provider who did not render the service. (For a resource on understanding an EOB, see How to Read a CHAMPVA Explanation of Benefits.)
  • Care providers learn bills and/or EOBs are being issued under their names when they did not provide the service.
  • Procedures or treatment actually provided on a single day are billed as occurring over a period of days or weeks (i.e., split billing).
  • Duplicate bills are sent to VA or duplicate payments or overpayments have not been returned.
  • Medical records submitted by the care provider do not appear to be authentic or document signatures do not match.
  • The patient or claims reviewer suspects medically unnecessary services or noncovered treatments were performed to generate payments.
  • Coding used for billing appears to be for more expensive services than actually provided, commonly known as “upcoding.”
  • Each step of a procedure is billed as if it is a separate procedure, commonly known as “unbundling.”
  • The vendor or the care provider offers gifts or money (or a portion of patient or VA payments) for referrals.

As seen during the COVID-19 pandemic, fraudsters have made intentional misrepresentations for illegal financial gain. Indicators of potential fraud schemes involving VA or veterans likely to continue or emerge during other public health crises include the following:

  • Laboratories or other entities contend that additional tests were completed together with tests for COVID-19 or other targeted public health testing to bundle and bill them at higher rates.
  • Treatments and/or testing kits are not approved or authorized by the Food and Drug Administration or do not carry approved/authorized manufacturer’s identifiers, such as legitimate lot numbers or QR codes (which can sometimes be confirmed on the manufacturer website).
  • Advertisements are made on social media or links are included in texts from unknown senders.
  • Offers are made to provide blank or manufactured documentation or vaccination cards.
  • Promised treatments are cancelled or not scheduled and/or testing kits never materialize, and help numbers or other contacts are disconnected or unresponsive.
  • Personal identifiable information (PII), such as social security numbers or financial information, names and birthdates, or passwords, are requested in order for the patient to receive a treatment or test, particularly if there is pressure to provide it immediately. These requests can come from individuals offering tests, treatment, or vaccines; conducting surveys; and claiming to be contact tracers.
  • Individuals are asked to pay out-of-pocket for vaccines or treatment medications, or to pay a fee to be placed on a waiting list or to gain early access. These offers are often advertised through social media, emails that appear personalized, telephone calls, or through other unsolicited sources.
  • An entity or individual will offer to sell or ship doses of vaccines or medications.
  • During a telehealth appointment, a care provider or vendor tries to sell additional products or services.

This type of fraud involves the unlawful manipulation of a process to acquire contracts, goods, or services or to obtain an unfair advantage. VA spends billions of dollars each year on contracted services, supplies, and medications alone. Indicators include the following:

  • The vendor has limited or no previous government contracting experience relative to the size of the bid or contract.
  • The vendor was established within the timeframe of a crisis (such as the COVID-19 pandemic) and is offering associated supplies, medications, or services for high-demand items or actions.
  • Products or services offered are unrelated to those the vendor previously specialized in.
  • A percentage of payment is demanded up front, or payment must be placed into escrow prior to product or service delivery.
  • Vendors claim to have direct contact with major manufacturers of large quantities of scarce items that cannot be obtained through VA’s previously used or well-known major distributors.
  • Vendors assert that they have name-brand items on hand when they are not authorized distributors.

Public corruption involves VA employees breaching the public’s trust by using their positions for private gain. Kickbacks involve any individuals accepting something of value in exchange for preferential treatment or payments to the individual or entity offering the kickback (including medical service providers, contractors, or vendors). Indicators of potential violations include the following:

  • Employees socialize closely with individuals trying to provide services or products to VA, to include “wining and dining” and the acceptance of gifts.
  • VA personnel conduct quality reviews that do not appear to match performance.
  • Contract violations are not documented.
  • A single vendor is repeatedly used in a competitive field, particularly if there has been prior poor performance.
  • VA employees, for themselves or on behalf of their family or friends, purchase stocks or financial interests involving a contractor, subcontractor, vendor, or other entity doing business before VA.
  • Staff explore possible employment inquiries for themselves or a family member with an entity that seeks or is doing business with VA.
  • VA personnel have an unexplained increase in wealth and are positioned to benefit entities doing business with VA.
  • Restrictions are included in contract solicitation documents that limit competition, such as defining statements of work and specifications to fit the products or capabilities of a single contractor or designing “prequalification” standards or specifications to exclude otherwise qualified contractors or their products.
  • Special assistance or information about the procurement is provided to one contractor but is not revealed to all.
  • Time limits for bid submission position only those with advance information to have adequate time to prepare proposals.
  • Statements of work, specifications, or sole-source justifications are developed by or in consultation with a contractor permitted to compete in the procurement.
  • Bid solicitation is vague as to the time, place, or other submission requirements.
  • Only a small number of potential competitors were aware of solicitation (e.g., using obscure publications, publishing in holiday seasons, providing a vague or inadequate synopsis to Commerce Business Daily).
  • A contractor is steered to use a specific subcontractor, expert, or source of supply.
  • A late bid is accepted.
  • Questionable, undocumented, or frequent requests for change orders are awarded to a particular contractor.
  • VA physicians receive compensation for directing patients to a particular lab, or are paid speaking fees for promoting certain medications or healthcare supplies and/or for prescribing them or inducing others to prescribe them over less expensive, effective alternatives.

SDVOSB fraud is the attempt by ineligible individuals or entities to obtain and/or perform, or otherwise profit from contracts set aside by VA for small businesses that are owned and controlled by service-disabled veterans. In some instances, an SDVOSB will “pass through” much of the performance of the contract to a non-SDVOSB. Indicators of potential fraud include the following:

  • The named owner who is an individual with disabilities incurred from military service has little to no experience with the work outlined in their awarded contracts.
  • The SDVOSB does not appear to have enough employees to perform the nature or scope of the contracted work.
  • Multimillion-dollar (high-value) contracts are secured with little or no past performance history.
  • Equipment is rented from a non-SDVOSB to perform the SDVOSB’s contracted work.
  • A teaming agreement is made with a non-SDVOSB.
  • The SDVOSB “passes through” the performance of its contract to a non-SDVOSB by citing a joint venture that was not disclosed during the bidding process.

Collusive bidding is a procurement scheme that predetermines the winning bidder and limits competition for the conspirators. Price fixing involves an agreement among competitors to manipulate the selling price of goods or services. Indicators of potential violations affecting VA include the following:

  • Certain contractors always bid against each other, or certain contractors never bid against each other.
  • The successful bidder repeatedly subcontracts work to companies that submitted higher bids or to companies that picked up solicitation documents and chose not to bid as prime contractors.
  • Competitors agree to take turns winning bids (bid rotation or allocation).
  • Competitors agree to submit intentionally high bids, or otherwise unacceptable bids (cover or complementary bids). Unacceptable bids can also reflect a pattern of regularly recurring low bids (bid suppression) in a certain geographical area, or in a fixed rotation with other bidders.
  • Competitors exchange any form of price information among themselves. This may result from the existence of an “industry price list” or “price agreement” to which contractors refer in formulating their bids, or it may take other subtler forms such as discussions of the “right price.”

Defective pricing is any contracting action subject to the Truth in Negotiations Act in which the negotiated contract price, including fee, is increased by a significant amount because the contractor or subcontractor at any level furnishes cost or pricing data to VA that is not complete, accurate, and current as certified in the contractor’s Certificate of Current Cost or Pricing Data. Indicators include the following:

  • A proposal estimate is used as the basis for negotiation that is higher than the supporting documentation with no credible explanation.
  • There are indicators or discussions that suggest the contractor falsified information, altered data, or certified misleading information.
  • Cost proposals are not updated for known cost decreases.
  • Some or all known data is withheld.
  • The bidder fails repeatedly to correct known system deficiencies that lead to defective pricing.
  • Overhead or baseline information is distorted by transferring charges or accounts.
  • The contractor denies the existence of historical records that are subsequently found.
  • The release of data needed to calculate a price reduction is delayed.
  • A significant cost element is concealed or misrepresented.