Skyrocketing spending on skin substitutes: A massive case of health care fraud

Federal regulators already have found instances of health care fraud based on billing and payment for skin substitutes. How much money is involved? David Tawes, MA, regional inspector general in the Baltimore, Maryland, HHS-OIG Office of Evaluation and Inspections, describes a case involving a huge amount of Medicare money. Tawes spoke with Medical Economics in September 2025, days before Alexandra Gehrke was sentenced to 15 ½ years in prison for health care fraud.

Medical Economics: Can you comment on whether there have been any criminal criminal charges, say, or civil filings for recovery based on this report and investigation?

David Tawes, MA: Yes, there’s been several cases, but I'll hit the biggest one. Earlier this year, the Department of Justice publicized the case involving an Arizona couple that pled guilty to health care fraud. Alexandra Gehrke and Jeffrey King pled guilty for causing over $1.2 billion dollars of false and fraudulent claims to be submitted in Medicare and other health insurance companies for skin substitutes over just a period of around 12 to 18 months. They weren't even medical professionals. She had run an art studio and works in real estate. He was a DJ, a producer. They started a wound care company, hired a bunch of marketers, supposedly from the solar panel industry, and they scoured nursing homes, hospices, and other settings to find patients with wounds. And then they offered to pay health care professionals, usually nurse practitioners, a flat fee to apply and bill for the maximum amount of product. So, if it comes in an eight centimeter by eight centimeter sheet, that's what you're supposed to bill, 64 square centimeters, even if the wound is tiny, even if the wound is healed. They were actually arrested at Phoenix Sky Harbor Airport preparing to leave country. They said it was for a honeymoon, we'll never know. In their plea agreements, the couple did admit to targeting elderly Medicare patients, many of whom were in hospice care, for medically unnecessary skin substitutes. And along with more than $1 billion of restitution, they face up to 20 years in prison.
Medical Economics: When you're talking about that figure, just to emphasize for our audience, that's billion, with a B. This is a lot of money involved.

David Tawes, MA: Yes, that is a lot of money and obviously that's a huge case. There are other many smaller cases out there, but I mean, it was a billion dollars, again, in just 12 to 18 months, so that shows you how much money is to be made on this by unscrupulous actors.