Justice Department Charges Doctor in Medicare Skin Substitute Fraud Scheme

By the Editorial Team · Thursday, August 6, 2026

The Justice Department charged Dr. Stephen Dubin with orchestrating a $95 million Medicare fraud scheme by fraudulently billing for costly and unnecessary skin substitute wound coverings in elderly patients. This case highlights ongoing concerns about wasteful Medicare spending, as officials seek to hold providers accountable amid efforts to curb excessive claims for these expensive products.

The Justice Department announced charges on Tuesday against Dr. Stephen Dubin of Nevada, accusing him of orchestrating a $95 million Medicare fraud scheme involving the use of expensive and medically unnecessary wound coverings on elderly patients. The charges allege that Dr. Dubin submitted false invoices to Medicare and improperly profited from kickbacks linked to the distribution of skin substitutes.

Skin substitutes are specialized bandages manufactured from dehydrated placentas that can cost thousands of dollars per square inch. Despite their high cost, they have not been shown to promote wound healing more effectively than standard dressings. Medicare’s spending on these products surged dramatically to nearly $15 billion in 2025, a figure experts consider to be among the largest instances of waste in the federal health program’s history.

Following media investigations into the widespread use and cost of skin substitutes, the previous administration reduced reimbursement rates significantly, causing Medicare spending on these products to drop to approximately $100 million so far this year.

Dr. Dubin was previously featured in a 2025 report detailing the skin substitute industry. At that time, he explained that he acquired the bandages from Legacy Medical Consultants, a major manufacturer, at a substantial discount. He also described a financial arrangement that split Medicare reimbursements between providers and the manufacturer, typically 60 percent to the manufacturer and 40 percent to the provider. The new charges claim that Dr. Dubin’s submitted invoices did not accurately represent the kickback portions.

The Justice Department further alleges that Dr. Dubin applied skin substitutes to patients for whom the treatment was inappropriate, including those with infected wounds or individuals unlikely to benefit based on prior therapies. These unnecessary applications contributed to inflated Medicare claims.

Separately, a Legacy Medical Consultants executive was charged in June with offering illegal kickbacks, bribes, and rebates to healthcare providers using the company’s skin substitutes. Authorities estimate the executive personally earned $24 million from the scheme.

The Justice Department stated that Dr. Dubin used proceeds from Medicare fraud to fund a lavish lifestyle, including the purchase of several multimillion-dollar yachts.

In prior comments, Dr. Dubin defended his practices, stating that skin substitutes were used only when necessary but acknowledged the financial pressures contributing to increased utilization. He retired in 2024, citing a saturated wound care market in Las Vegas. He also noted the practice’s appeal due to its low legal risk and profitability.

Dr. Dubin did not respond immediately to requests for comment on the new charges.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.