At a forum on Medicare, Dr. Mehmet Oz held up a chart with staggering figures: Over six years, spending on a specialized skin grafting treatment for older adult patients climbed from less than $200 million annually to an astonishing $14.4 billion in 2025, a 7,100% increase.
The money didn’t contribute to better health. It funded kickback schemes across the U.S. that paid for fraudsters’ luxury lifestyles, including Ferraris, Bulgari diamond necklaces, gold bars and beachfront mansions.
Medicare payments for skin grafting were slated to rise to a staggering $25 billion this year, but the Trump administration cracked down on what turned out to be billions of dollars in fraudulent charges and unnecessary uses of the procedure.
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Medicare expenditures on skin grafting procedures in 2026 are now expected to plummet to less than $100 million.
Slashing rampant fraud in Medicare is part of the Trump administration’s plan to help extend the life of the program. The 2026 Medicare trustees report projected the Medicare hospital program will run out of money by 2033, but Dr. Oz, a heart surgeon who serves as the administrator for the Centers for Medicare and Medicaid Services, said ending fraud alone will extend it far beyond that.
“We would be able to double the life expectancy of the Medicare trust fund if we could deal with the fraud issues just in Medicare,” Dr. Oz said at a healthcare fraud press conference.
The skin grafting fraud is part of $100 billion in estimated annual theft from the Medicare and Medicaid programs.
Dr. Oz said CMS set up a fraud “war room” to uncover fraudulent billing schemes and services, including the proliferation of wound graft companies.
The Justice Department recently won convictions against Alexandra Gehrke, 40, and her husband, 47-year-old Jeffrey King, for filing $1.2 billion in fake and fraudulent claims to Medicare and other health insurance programs for wound grafts for terminally ill patients.
Gehrke hunted down older adult patients with skin wounds and ordered sales representatives who lacked medical training to order the largest, most expensive bioengineered substitutes to be placed on the wounds, even when the treatment was deemed inappropriate or unnecessary.
Some of the patients were terminally ill and died shortly after the procedures, or even the same day. Many received large skin grafts for small wounds or were treated unnecessarily with several skin grafts for a single wound.
Gehrke collected $279 million in kickbacks from the skin graft distributor. King co-owned a similar company with Gehrke and collected $130 million in kickbacks. They spent the money on a Ferrari 488 Spider convertible and other luxury vehicles, $21 million in life insurance annuities and gold and silver bars and coins.
Gehrke was sentenced to 15.5 years in federal prison. King was sentenced to 14 years.
In another case, the Justice Department indicted Marizel Yukee, a 49-year-old nurse practitioner from Las Vegas. Prosecutors said she, through wound clinics in four states, targeted older adult patients, many terminally ill. She is accused of filing $906 million in fraudulent claims for skin grafts, of which nearly $300 million was paid by the government. The feds seized assets worth more than $35 million, including a $594,000 Ferrari 296 GTS and an $865,000 Bulgari necklace.
Ms. Yukee pleaded not guilty. Her trial is slated for February 2027.
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