Federal prosecutors on Tuesday moved in on a Pasadena wound care outfit, seizing more than $2 million from a clinic accused of billing Medicare for pricey skin graft procedures that investigators say never actually happened. A federal magistrate signed off on taking about $2,039,792 from an account linked to Expert Wound Care PC, a move folded into a wider Southern California crackdown on suspected abuses tied to skin substitute billing.
According to a press release from the U.S. Attorney's Office, Central District of California, court filings say Expert Wound Care submitted around $46.6 million in Medicare claims for skin substitute products and wound care services for 78 beneficiaries between September 2025 and April 2026. Medicare paid roughly $34,031,382 on those claims. The filings also say the clinic’s average allowed amount per claim for substitute skin grafts was about $37,449, more than double the national average. United States Magistrate Judge Alicia G. Rosenberg approved the seizure to hold on to funds prosecutors argue are tied to alleged fraud.
Allegations of Phantom Treatments
Investigators say some of those eye popping bills did not match real world care. The Los Angeles Times reports that court affidavits describe one beneficiary who was billed for more than $6.2 million in services. For that patient alone, the clinic allegedly billed Medicare about $2.6 million between October 2025 and February 2026 and was paid roughly $2,039,792 for skin substitute grafts and 52 graft application services, procedures that agents say the patient never received. Officials also say that during surveillance the clinic’s listed Altadena Drive office was found locked, and that several patients had little or no record of getting the services Medicare was charged for.
How the Probe Began
Court documents and local coverage say the whole thing began when a Wells Fargo employee spotted suspicious activity on the clinic’s account and alerted bank investigators, who then temporarily froze the account. NBC Los Angeles noted that the seizure came on the heels of other recent takedowns, and that federal officials have labeled Southern California a "high-risk environment" for health care fraud amid stepped up enforcement this spring.
Why Regulators Are Watching Skin Substitute Billing
Federal agencies say the money pouring into skin substitutes has exploded, rising from about $256 million in 2019 to more than $10 billion by 2024. That surge helped trigger new rules and tighter oversight. The Centers for Medicare & Medicaid Services locked in changes to its 2026 physician fee schedule that will shift most skin substitutes to an "incident-to" flat rate payment, an effort to curb what officials describe as runaway reimbursement costs.
Investigators and Next Steps
The Justice Department says Homeland Security Investigations and the HHS Office of Inspector General are helping drive the probe, and that an assistant U.S. attorney in the Central District is handling the asset forfeiture case. The Los Angeles Times reports that no criminal charges have been filed so far, and that the seizure is meant to preserve the funds while investigators continue to build their case.
What This Means for Patients
For patients in the area, the move could disrupt care if appointments or billing get thrown into limbo, and it underscores how closely federal authorities are now watching home based wound care providers that depend on high dollar skin substitute payments. Officials say anyone with information about the clinic should reach out to investigators, and Medicare beneficiaries who spot questionable bills are urged to contact their health plan or federal watchdog agencies for help.
