Federal healthcare fraud is the intentional deception or misrepresentation to secure an unauthorized benefit or payment from any healthcare program.
18 U.S.C. § 24(b) defines a healthcare program as “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.”
The government generally prosecutes healthcare fraud under 18 U.S.C. § 1347, but it can also bring charges in conjunction with the following laws:
- Stark Law (also known as the Physicians Self-Referral Law), 42 U.S.C. § 1395nn, which prohibits a physician referring a patient to a medical facility in which they or a family member hold a financial interest.
- Anti-Kickbacks Statute, 42 U.S.C. § 1320(a)-7(b)(b), which prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or healthcare services for Medicare or Medicaid patients).
- False Claims Act, 31 U.S.C. §§ 3729-3733, which makes it illegal to submit claims for payment to Medicare or Medicaid that a provider knows or should know are false or fraudulent.
- Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a, which gives the Office of Inspector General the authority to seek civil monetary penalties (CMPs), assessments, and exclusion against an individual or entity based on a wide variety of prohibited conduct in Federal healthcare programs.
To secure a conviction under 18 U.S.C. § 1347, the government must prove beyond a reasonable doubt that in the defendant knowingly and willfully engaged in, or attempted to engage in, a fraudulent healthcare scheme. Attempt is punishable to the same extent as the completed offense, but it requires proof of a “substantial step” taken toward committing the fraud.
When a healthcare fraud investigation doesn’t produce sufficient evidence of actual fraud under § 1347, the government will often charge attempt and/or conspiracy instead under 18 U.S.C. § 1349 and § 371.
ELEMENTS OF A § 1347 OFFENSE
To convict, the government must prove beyond a reasonable doubt that the defendant:
- Knowingly and willfully executed, or attempted to execute, a scheme or artifice to defraud a healthcare benefit program, or to obtain money or property under the program’s custody or control through false or fraudulent pretenses, representations, or promises.
- Did so in connection with the delivery of, or payment for, healthcare benefits, items, or services.
- Acted with the requisite fraudulent intent.
- Involved a public or private program that is covered by the statute.
WHAT § 1347(b) ELIMINATES
- 1347(b) provides that an individual need not have actual knowledge of the statute itself or a specific intent to commit a violation of the statute. Thus, a charged defendant need not know:
- The statute number, § 1347;
- The precise legal elements of federal healthcare fraud.
- That the conduct is charged under this particular provision.
However, § 1347(b) does not eliminate the government’s burden to prove knowing, willful engagement in a fraudulent scheme and intent to defraud. The core requirement remains intact: the defendant must have “knowingly and willfully” executed or attempted to execute the scheme.
TYPES OF HEALTHCARE FRAUD CHARGES
The government usually brings healthcare fraud charges for conduct such as:
- Billing for services not provided.
- Billing at a higher level than the service actually rendered (called “upcoding”).
- Duplicate or double billing.
- Upcoding services or equipment.
- Excessive or inflated services.
- Falsifying patient records.
- Prescription fraud.
- Using false diagnoses or medical-necessity certifications.
- Billing for medically unnecessary tests, prescriptions, therapy, DME, or procedures.
- Submitting claims under another provider’s identifier.
- Paying or receiving illegal remuneration for referrals.
- Concealing ownership, conflicts, exclusion, or other enrollment facts.
- Falsifying records to support submitted claims.
PENALTY EXPOSURE
Penalties for convictions obtained under § 1347 are severe:
- Base maximum sentence of 10 years in prison.
- Increases to 20 years if the fraud results in serious bodily injury (such as a patient overdose caused by unnecessary prescription).
- Increases to life imprisonment if the fraud results in death (such as a fatal overdose caused by an unnecessary prescription).
- Fines up to $250,000 for individuals per count (or twice the gross gain/loss under 18 U.S.C. § 3571 and fine up to $500,000 for organizations per count (or twice gain/loss).
In practice, the actual sentence is determined by the U.S. Sentencing Guidelines (mainly §2B1.1) which consider:
- Loss amount: the single biggest driver in white collar crime sentencing.
- Number of victims and sophistication of the scheme: more victims and greater complexity typically increase the sentence.
- Role in the offense: organizer/leader vs. minor participant.
- Acceptance of responsibility: guilty plea, cooperation, restitution.
DEFENDING AGAINST A HEALTHCARE FRAUD CHARGE
An experienced criminal defense attorney understands that preparing a defense against any healthcare fraud charge requires investigating and analyzing:
- The actual claims forms, billing data, remittance records, and payment history.
- Medical charts, orders, test results, treatment notes, and patient interviews.
- Coding manuals, payer policies, coverage determinations, and provider agreement in place at the relevant time.
- Emails, texts, compliance materials, training records, audits, and internal warnings.
- The defendant’s role and authority, if any, over staffing, documentation, coding, and claim submissions.
- Financial tracing, specifically including where payments went and whether money movements demonstrate intent, ordinary business operations, or something else.
- Secure expert assistance, and possible testimony, from qualified physicians, coders, reimbursement specialists, or forensic accountants.
A strong defense in a criminal case begins with the pretrial investigation.
POTENTIAL CORE DEFENSES
Each healthcare fraud case is different, and the right defense strategy depends on the specific prosecutorial theory and the strength of the evidence behind it. Core defenses include:
- Lack of knowledge or willfulness: the defendant was unaware of false submissions; relied in good faith on staff or professional advice; or simply made unintended errors.
- Good-faith belief: direct evidence that the defendant genuinely believed the claim was proper, the service was covered, or the coding was justified, which undercuts the claim of fraudulent intent.
- No false statement: the coding, diagnosis, service, or certification was correct under governing rules and clinical record.
- Lack of materiality: the charged inaccuracies were not capable of affecting the insurer’s payment decision.
- Clinical judgment/medical necessity: the service provided was appropriate and the prosecution’s case is nothing more than a difference of medical opinion rather than intentional deception.
- Reliance on billing personnel or experts: the defendant did not knowingly direct or adopt false claims, rather depended upon billing personnel, an outside billing company, coder, consultant, or attorney to make the proper decision.
- No execution of scheme: for defendants who are employees, nominal owners, or clinicians with limited administrative role, they did not submit, authorize, cause, or knowingly participate in the alleged fraudulent billing.
- Attack on sufficiency of evidence and attribution: prosecution failed to show a reliable nexus of a specific false claim, record alteration, signature, communication or payment to the defendant.
- Ambiguous rules or coding guidance: unclear governing rules or coding guidance can undermine the claim that the defendant knowingly violated them.
- Pretrial statutory and constitutional issues: challenges to unlawfully obtained evidence, defective search and seizure procedures, overbroad subpoenas, tainted custodial interviews, and/or official misconduct through police and/or prosecutors failing to disclose requested discovery or concealing exculpatory discovery materials.
CONCLUSION
Choosing an attorney to handle a criminal appeal is a critical decision. That attorney should have experience in handling appeals at both the federal and state levels. The John T. Floyd Law Firm has that experience. Our attorneys stand ready to provide you with representation should you so choose.
