Review of Federal Health Care Fraud Laws, Penalties, and Defenses
18 U.S.C. § 1347 makes it a federal offense to defraud a health care benefit program. The primary factor in prosecuting any federal health care fraud case is the “intent to defraud.”
This crucial element of the crime is usually demonstrated when someone uses false pretenses, promises, or misrepresentations to acquire services or money they are not entitled to receive.
The type of fraud crime will generally vary depending on the type of benefit program or the target of the fraud, whether to obtain cash or expensive health services.
For example, a typical health care fraud case involves intentionally making false claims that you are eligible for a specific healthcare benefit program when you don't qualify.
Some programs require people who receive benefits to fall below a specific income level, called “means testing,” which is routine in many federal benefit programs.
Put simply, you know your income is too high to be eligible for a health care benefits program. Still, when you complete the registration paperwork, you deliberately make false statements to be accepted.
If you're facing federal medical insurance fraud charges, such as Medicare fraud, you're undoubtedly worried about what will happen next and the possible repercussions of a conviction.
While it may seem like insurance fraud is a victimless crime, it does increase insurance and medical costs for everyone.
As a result, the FBI, the primary agency for investigating these crimes, and the United States Department of Justice prosecute health care fraud charges zealously. Our Los Angeles criminal defense lawyers will review below.
What is Insurance Fraud?
Federal legislation requires insurance companies to pay legitimate health insurance claims within 30 days.
The FBI, U.S. Postal Service, and Office of the Inspector General, tasked with investigating health care fraud, can't possibly adequately investigate every possible claim before an insurance company must pay it.
As a result, 18 U.S.C. § 1347 prohibits health care fraud broadly, prohibiting anyone from knowingly or willfully attempting “to execute, a scheme or artifice” to defraud any health care benefit program or obtain money in connection with delivery or payment of health care benefits, items, or services.
The person charged doesn't need to know that what they're doing is illegal or that there's legislation prohibiting their actions.
Instead, simply knowingly or intentionally providing incorrect information that leads to obtaining health care benefits is enough to show intent under the law.
When you receive either subsidized medical treatment or a cash benefit, you committed health care benefits fraud because you knowingly and willingly gave false representation to defraud medical programs to provide you with service or payment that you knew you should not receive. 18 U.S. Code 1033 defines federal insurance fraud.
Medical Providers
Types of medical fraud committed by health care providers can include:
- Double billing involves submitting multiple claims for the same service;
- Unbundling breaks one service into multiple services and bills instead of billing once for the entire service;
- Upbilling is billing for a more complex procedure than the one performed;
- Phantom billing is shadow billing that involves billing for a service or a visit that the patient never actually received.
Medical providers can often find themselves the target of a medical fraud investigation without knowing why.
Federal agencies don't just pursue large, complex medical fraud schemes. Instead, several practices, no matter how small, can result in a federal investigation, including:
- Providing false information to Medicare or other federal agencies;
- Soliciting or accepting “referral fees” or kickbacks;
- Prescribing unnecessary medications;
- Falsifying patient records or prescriptions, and
- Billing for unnecessary medical services.
Patients and Other Individuals
Some types of medical fraud committed by patients and others may include:
- Identity or insurance theft: Using someone else's health insurance information or allowing someone else to use your health insurance information;
- Fake insurance: Convincing people to give you their health insurance and personal information to bill bogus charges or enroll them in a fictitious health plan;
- Impersonating a health care professional: Providing health care services or billing for health care services without a license.
Prescriptions
Health care fraud involving prescription medications often includes:
- Doctor or prescription shopping: Doctor shopping involves visiting multiple health care professionals to receive multiple prescriptions for controlled substances or using medical offices that engage in unethical prescription medication practices;
- Forgery: Prescription forgery involves using or creating forged prescriptions;
- Diversion: Prescription diversion is reselling or redistributing medications you received through a legitimate prescription.
Medical fraud involving prescription medications can lead to severe injury or death and contributes to the opioid addiction epidemic.
Health Care Fraud Conspiracy - 18 U.S.C. § 1349
18 U.S.C. § 1349 federal healthcare fraud can be charged by prosecutors as a conspiracy when two or more people agree to commit healthcare fraud, which can occur in many different ways.
For example, a group of people agrees to recruit others to claim eligibility for some federal healthcare program benefits. They will send these individuals to a doctor who participates in the illegal conspiracy.
The co-conspirators recruited will receive a “kickback,” while the doctor will receive reimbursement from the federal benefits program for allegedly providing medical services to recruits.
In reality, the doctor did not provide the services they are claiming from the government. The people who recruited the patients, called “cappers,” also receive a kickback.
The conspiracy operates by paying numerous members through fraudulently obtained federal healthcare benefit money.
In other words, under the health care fraud conspiracy statute, 18 U.S.C. § 1349, when multiple people agree to commit or attempt health care fraud, they can also face charges for health care fraud, even if the attempt was unsuccessful.
If the attempted fraud is successful, the individuals involved can face separate charges and penalties for both health care fraud and conspiracy.
Consequences of Health Care Fraud Convictions
If convicted of health care fraud under 18 U.S.C. § 1347, you can face a fine and up to ten years in prison.
If the fraud results in serious bodily injury, you can face a fine and up to 20 years in prison, along with huge fines. If someone dies due to health care fraud, you could face up to life in prison.
Similarly, a conviction for health care fraud conspiracy has serious consequences, including fines and up to ten years in prison.
If you're accused of medical insurance fraud, you could also face charges of:
- Medicare or Medicaid fraud,
- Medical billing fraud,
- Federal health insurance fraud,
- Anti-kickback statute violations,
- False Claims Act violations,
- Stark law violations, and
- Violations under the Controlled Substance Act.
Contact our criminal defense lawyers for an initial consultation if you or a family member is under investigation or is charged with committing federal health care fraud under 18 U.S.C. § 1347 or § 1349.
We can protect your legal rights in the investigative stage of the case before a formal filing and possibly negotiate a pre-indictment resolution with the prosecutor or litigate your case in a federal courtroom, including through a federal jury trial.
Eisner Gorin LLP is based in Los Angeles County, and you can reach our office for a case review at (877) 781-1570 or by filling out our contact form.
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