Review of Medicare Fraud Charges, Penalties, and Defenses
Federal Medicare fraud charges are defined under 18 U.S.C. § 1347 and occur when someone willfully executes, or makes an attempt, to defraud any healthcare benefit program by false pretenses, representations, or promises in order to obtain money or property controlled by the program.
Put simply, this statute makes it a federal crime to commit fraud against a federally operated healthcare benefit program.
Just like most all fraud offenses, the primary element of the crime in Medicare fraud charges is the intent to defraud.
Typically, a federal prosecutor will attempt to prove this crucial factor of intent to defraud by showing the defendant used false pretenses in order to obtain money or property they were not entitled to receive.
The seriousness of a federal Medicare fraud investigation cannot be overstated.
When a healthcare practitioner is accused of defrauding patients, or the federal government, the penalties can be swift and severe.
For more detailed information, our Los Angeles criminal defense lawyers are reviewing the laws below.
What Constitutes Medicare Fraud?
The definition of Medicare fraud at the federal level is contained in 18 U.S.C. § 1347, which refers to the following illegal conduct:
- “When an individual knowingly executes, or makes an attempt to execute a scheme, that defrauds any healthcare benefit program by use of false pretenses, representations, or promises, commit a federal offense.”
As noted above, it can't be overstated integral qualifying factors of Medicare fraud is that the defendant has the intent to defraud.
Health care providers, such as doctors, nurses, clinics, hospitals, and physical therapists are all common defendants in federal Medicare fraud cases.
This type of fraud is a serious issue in the United States, and Federal Bureau of Investigation (FBI) has stated it cost the healthcare programs billions of dollars annually.
There are other similar statues that could fall under the umbrella of Medicare fraud, including the following:
- 18 U.S.C. § 1033 – insurance fraud,
- 18 U.S.C. § 287 – false claims act,
- 42 U.S.C. § 1320a-7b – anti-kickback statute,
- Patient Access and Medicare Protection Act.
Federal law allows the Office of the Inspector General to exclude people at their discretion from participating in a federal health care program.
The Civil Monetary Penalties Law has provisions that allow civil penalties for any violations of the Anti-Kickback statute.
Common Forms of Medicare fraud
Medicare fraud takes a variety of forms. Importantly, fraud can be distinguished from Medicare abuse in that a fraud accusation requires the intent of defrauding, whereas abuse involves activity that directly or indirectly results in costs that are unnecessary without the specific intent of fraud.
Common instances of Medicare fraud may include:
- billing for services that aren't necessary simply means charging for services that the patient didn't actually need, or providing excessive services.
- billing for services that weren't rendered means to charge for medical services that that were never actually provided.
- billing for duplicate services means charging Medicare twice for the same or similar services by slightly modifying bills and invoices.
- unbundling services meant to be bundled together to receive additional reimbursement from the federal healthcare program.
- overcharging medical suppliers means a deliberate act of charging more necessary with an intent to defraud the Medicare program.
- upcoding patient billing in a manner that results in greater than necessary Medicare reimbursement they are entitled to receive.
- working with patients to defraud Medicare by offering them an incentive to commit fraud in cahoots with the medical professional.
Healthcare Fraud Conspiracy - 18 U.S.C. § 1349
Under Title 18 of the United States Code, Section 1349, the crime of federal healthcare fraud can be charged as a conspiracy when one or more defendants make an agreement to commit healthcare fraud together
The primary factors in a conspiracy can occur in many forms.
For example, a group of people might agree they will all recruit people in their neighborhood to claim eligibility for some federal healthcare program benefits.
Then, the conspirators will send these recruits to a doctor who is also part of the overall conspiracy.
In exchange, the recruits will receive a payment, commonly called a “kickback,” while the doctor's office will get reimbursement from a federal benefits program for allegedly providing medical services they never performed.
Further, the people who recruited the alleged new patients, known as “cappers,” will also receive a kickback for their part in the conspiracy.
As you can see, this common Medicare fraud conspiracy operates by paying the members within the conspiracy with fraudulently obtained federal healthcare benefit dollars.
Readers should note that everyone who had knowledge of the 18 U.S.C. § 1349 conspiracy could face federal charges under this statute.
Medicare Fraud Federal Penalties
As noted above, Medicare fraud falls under an array of federal statutes, and as such, those accused may face a variety of federal criminal charges.
Some of the more common statutes invoked are the criminal Healthcare Fraud statute, the False Claims Act, and the Anti-Kickback statute.
18 U.S.C. § 1347— Healthcare Fraud penalties include:
- “Fines or imprisonment not exceeding 10 years, or both. If the violation caused serious bodily injury, defendant will be fined or imprisoned over 20 years, or both; if the violation resulted in death, defendant face fines, or imprisoned for any term of years or for life, or both.”
18 U.S.C. § 287—False Claims Act penalties include:
- “A defendant who was convicted will be facing imprisonment not exceeding five years and a fine.”
While 18 U.S.C. § 1287 outlines the criminal penalties associated with making false claims to a person or agency in service of the United States, 31 U.S.C. § 3729 dictates the civil penalties for such an act.
Civil penalties, which will generally accompany the criminal charges, may result in a fine of up to $10,000 in addition to a penalty three times the costs incurred by the government due to the false claim or claims.
42 U.S.C. § 1320a-7b: Anti-Kickback Statute penalties include:
- “(i) A felony conviction and a fine not exceeding $100,000 or imprisonment for not over 10 years or both, or (ii) a misdemeanor conviction and a fine not over $20,000 or imprisoned for not more than one year, or both.”
Under the Anti-Kickback statute, the degree of closeness to the crime will be a deciding factor in whether the charge levied is considered a felony or a misdemeanor offense.
The repercussions associated with Medicare fraud don't stop at fines and jail time; they also include excluding those accused and convicted from future Medicare participation opportunities.
Collateral Consequences of a Medicare Fraud Conviction
In addition to legal penalties listed above, a Medicare fraud conviction will normally result in harsh collateral consequences as well.
For example, a conviction will likely result in the loss of a medical license, and make it very difficult for a defendant to find work in the health care profession again
Further, a conviction will become a public record, meaning it could cause problems with your ability to find work or even rent an apartment.
Under 42 U.S.C. 1320a-7, those barred from participation in federal programs will include:
- “Any person or entity convicted for an offense under Federal or State law, relating with delivery of a health care item or service or any act or omission in a health care program operated by or financed by any local government agency, of a felony offense that is related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”
Defending a 18 U.S.C. § 1347 Medicare Fraud Charge
The defense of these charges requires a skilled understanding of each statute violation.
The harsh penalties associated with Medicare fraud warrant a sophisticated and sincere understanding of the defense process when you're accused of criminal behavior.
Defenses of Medicare fraud often hinge on the intent of the accused.
The charge of Medicare fraud requires specific intent, defined as an act committed both knowingly and willingly.
While you may still face civil penalties if the act was committed without specific intent, the consequences won't be as severe.
Another prong of healthcare fraud defense is the prosecutorial burden of proving the defendant engaged in an act of fraud.
If or when you receive an official letter advising you of a federal healthcare fraud investigation against you, you should comply with search warrants and avoid altering any records.
That said, you should ensure that those conducting the investigation have the proper authority to do so. Contact a defense attorney right away, and certainly before you enter into any plea negotiations.
Plea agreements are a formal deal between defendant and federal prosecutor where the defendant will plead guilty in exchange for reduced charges, or to receive a lighter sentence.
Further, be advised that in addition to criminal penalties, you're also likely to face federal civil penalties and repercussions from your state licensing board.
We can protect your legal rights during the investigative stage of the Medicare fraud case before a formal filing.
We could also possibly negotiate a pre-indictment resolution with the government prosecution, or litigate the matter in federal court, including through a federal jury trial.
Eisner Gorin LLP has two office locations in Los Angeles County. Call us (877) 781-1570 for an initial consultation, or you can fill out our contact form.