Fraud, waste and abuse cost the healthcare system enormous sums every year, and enforcement is constant. The US Department of Justice regularly announces coordinated national actions against health care fraud schemes involving providers, clinics and medical professionals.
Some of those cases involve deliberate schemes. Many compliance failures, though, start with something mundane: an arrangement with a physician that continued after the contract expired, a missing signature, or an obligation in a payer agreement nobody was tracking. This guide, refreshed for 2026, looks at the common forms of healthcare fraud, the laws that govern provider arrangements, and how automated obligation management reduces the risk that a contract gap becomes a violation.
Common forms of healthcare fraud
Enforcement cases fall into a handful of recurring patterns.
| Type | What it looks like |
|---|---|
| Billing for services not rendered | Claims for care, tests or appointments that never happened, including no shows |
| Misrepresenting service details | Wrong dates, locations or providers, or splitting one encounter into several to bill more |
| Upcoding and false diagnoses | Billing at a higher complexity than documented, or reporting serious diagnoses to justify extra services |
| Kickbacks and improper referrals | Payments or benefits offered to induce referrals of patients or services |
| Prescription fraud | Improper prescribing and patients obtaining the same drugs from several prescribers |
Several of these depend on contracts. Kickback and referral issues often hide in physician arrangements, medical directorships and marketing agreements. Billing issues are shaped by payer contracts. That is why contract control is part of fraud prevention.
Why fraud happens
Greed and corruption explain some cases. Others arise from non compliance or failure to meet obligations, without anyone intending fraud. Providers are focused on care delivery, billing, payer requirements and revenue cycle management, and the regulatory detail in hundreds of agreements can slip. As care delivery and reimbursement models change, the rules change too, which makes staying current harder.
The contracts that carry the risk
Healthcare agreements run across the whole value chain. The ones most often linked to fraud and abuse risk include:
- Physician employment and independent contractor agreements
- Medical director and other professional services agreements
- Managed care and payer agreements
- Pharmacy agreements
- Research and grant agreements
- Affiliation agreements
- Equipment leases, purchases and service agreements
- Real estate leases, particularly with referral sources
All of them sit under regulatory obligations, from patient privacy rules under HIPAA to the federal fraud and abuse laws below. The governing body and executives of a healthcare organization carry ultimate responsibility for compliance.
The laws every provider contract must respect
Stark Law
The physician self referral law is a strict liability statute. Even technical violations, such as an arrangement that continued after the written agreement lapsed or an agreement missing a required signature, can create liability. It restricts physicians from referring certain designated health services to entities with which they have a financial relationship, unless an exception applies.
Federal Anti Kickback Statute
The statute prohibits offering, paying, soliciting or receiving anything of value to induce or reward referrals of items or services paid for by federal health care programs. Arrangements must fit a safe harbor or be structured carefully, for example at fair market value for services actually provided.
False Claims Act
The act creates liability for knowingly submitting false claims to the federal government, using false records to obtain payment, or improperly keeping overpayments. Claims tainted by Stark or kickback violations can also become false claims.
Accreditation
Accreditation bodies such as The Joint Commission set standards that organizations commit to meet, and some of those standards depend on contracted services.
The Department of Health and Human Services Office of Inspector General compliance guidance sets out what an effective compliance program should include.
How automated obligation management reduces risk
Many of the technical failures behind enforcement cases are exactly the kind of thing software prevents. A lapsed agreement is a missed renewal date. A missing signature is an incomplete execution step. A payment outside fair market value is a contract term nobody checked.
- Hold every provider and referral source agreement in one repository with complete metadata
- Alert owners well before agreements expire, so services never continue without a contract
- Block activation until all required signatures and approvals are complete
- Record fair market value assessments and other evidence with the agreement
- Extract obligations, such as time records or service logs, and assign owners
- Check payments against contract terms before they are made
- Report on agreements nearing expiry, missing documents and overdue obligations for the compliance committee
Providerflow is built for these provider arrangements, and Obligationflow tracks the obligations inside them with owners and evidence. A person approves every AI extracted obligation before it is tracked.
Warning signs in a provider contract portfolio
A quick review of the portfolio often shows where risk is building. Compliance teams can look for a few signals.
- Arrangements with referral sources that have no current written agreement, or one that expired months ago
- Agreements without all signatures, or signed after services started
- Compensation with no recorded fair market value assessment
- Payments that do not match the agreed rate, frequency or services
- Duties such as time records or service logs that nobody collects
- Several overlapping agreements with the same physician or group, which makes the total arrangement hard to assess
Each signal is easy to find when agreements are in one system with consistent data, and very hard to find when they are spread across departments and filing cabinets.
Building a contract centered compliance program
- Inventory every agreement with a physician or other referral source
- Standardize templates that include required terms and signature blocks
- Require fair market value review and documentation before signature
- Automate renewal and expiry alerts with escalation
- Audit a sample of arrangements each year against their terms
- Train contract owners on the rules that apply to their agreements
See provider contract management for how these steps run in one workflow.
The bottom line
Healthcare fraud enforcement will continue, and the rules will keep evolving. Providers cannot control every bad actor, but they can make sure their own contracts are current, signed, priced properly and tracked. Automated obligation management turns that from a periodic cleanup into everyday control.