Health care fraud has always been a problem for the nation’s health care system, and it isn’t going away. According to the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Spring 2026 Semiannual Report to Congress, covering the six-month period from October 1, 2025 through March 31, 2026, the agency’s health care fraud investigations led to 317 criminal actions and 287 civil False Claims Act actions, and it excluded 1,212 individuals and entities from participating in federal health care programs. For every dollar Congress invests in OIG, the agency’s work returns $12.70 in expected recoveries, a return on investment that underscores just how much fraud is actually out there to recover. Those numbers alone tell you this isn’t a fringe issue: it’s a systemic one, and the government is treating it that way.
It was exactly this kind of long-standing abuse that led Congress to make health care fraud a federal crime through the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Today, 18 U.S.C. § 1347 makes health care fraud punishable by up to 10 years in federal prison. If the fraud results in a patient’s injury, that maximum jumps to 20 years, and if it results in a patient’s death, the penalty can be life imprisonment without parole.
What Typical Medicare Fraud Looks Like
Medicare fraud generally involves:
- Knowingly submitting false statements or misrepresenting facts to obtain a federal health care payment the person or entity wouldn’t otherwise be entitled to;
- Knowingly soliciting, paying, or accepting kickbacks to induce or reward referrals for items or services reimbursed by federal health care programs; or
- Making certain prohibited referrals for designated health services.
Medicare fraud has grown into a sophisticated criminal enterprise. Organized groups have gone so far as to impersonate legitimate Medicare providers and suppliers to infiltrate the program. Common examples include:
- Billing for phantom services or supplies: for instance, charging Medicare for appointments the patient never kept, or for supplies that were never delivered; and
- Upcoding: billing for a higher level of service or complexity than what was actually provided.
Where Fraud Ends and Abuse Begins
Medicare abuse is a lesser offense than fraud, but it’s still costly. HHS defines abuse as any practice inconsistent with providing medically necessary, professionally recognized, and fairly priced care. In practice, that includes:
- Billing for services that weren’t medically necessary,
- Overcharging for services or supplies, and
- Misusing billing codes to inflate reimbursements.
The Broader Legal Framework
Section 1347 isn’t the only law in play. Several other federal statutes govern Medicare fraud and abuse:
- False Claims Act (FCA)
- Anti-Kickback Statute (AKS)
- Physician Self-Referral Law (Stark Law)
- Social Security Act
One important distinction: unlike criminal prosecution, civil liability under these statutes doesn’t require the government to prove actual knowledge or specific intent to violate the law.
Section 1347 specifically criminalizes knowingly and willfully executing (or attempting to execute) a scheme to defraud a health care benefit program, or to obtain money or property from one through false pretenses.
The FCA applies when the government is overcharged or sold substandard goods or services; for example, a physician billing Medicare for a higher level of service than was actually provided. It carries civil penalties ranging from roughly $5,500 to $11,000 per false claim, plus up to three times the government’s actual damages.
The AKS makes it a crime to knowingly offer, pay, solicit, or receive anything of value in exchange for referrals reimbursed by federal health care programs; for example, a provider receiving free or below-market office rent in exchange for patient referrals. Beyond criminal penalties, violations can also trigger civil penalties of up to three times the kickback amount.
The Stark Law prohibits physicians from referring patients for certain health services to an entity in which they, or an immediate family member, hold a financial interest, unless a recognized exception applies. Penalties can include fines, repayment of claims, and exclusion from federal health care programs.
Beyond these criminal and civil tools, Medicare has its own administrative sanctions. Under the Exclusion Statute, HHS-OIG is required to exclude from all federal health care programs any provider or supplier convicted of Medicare fraud, patient abuse or neglect, a felony involving fraud or financial misconduct connected to a health care item or service, or a felony related to the unlawful manufacture or distribution of controlled substances, among other grounds. Excluded providers can’t bill Medicare, Medicaid, or the Children’s Health Insurance Program for a set period, and reinstatement afterward is never automatic.
Enforcement Is Ramping Up
The government isn’t just writing new rules, it’s actively going after violators, and at a scale not seen before.
On June 30, 2025, the Department of Justice announced its 2025 National Health Care Fraud Takedown, resulting in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, across 50 federal districts and 12 state attorneys general’s offices, involving more than $14.6 billion in alleged fraud. It was, by a wide margin, the largest health care fraud takedown in DOJ history: more than double the previous record of $6 billion. As part of the same action, the government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets, while CMS reported preventing more than $4 billion in fraudulent payments in the months leading up to the takedown.
The cases coming out of these efforts are striking. In one of the largest telemarketing Medicare fraud cases on record, the CEO of a health care software company was sentenced to 15 years in prison and ordered to pay $452 million in restitution after running a telemedicine and durable medical equipment scheme worth more than $1 billion, built on misleading mailers, offshore call centers, and sham telehealth consults designed to generate medically unnecessary orders. In a separate case, an insurance broker and a marketing executive were each sentenced to 20 years in prison and ordered to pay $180 million in restitution for enrolling tens of thousands of vulnerable individuals, many experiencing homelessness or struggling with mental health or substance abuse issues, into fully subsidized Affordable Care Act plans without their knowledge or consent.
That same day, the DOJ also announced it would launch a Health Care Fraud Data Fusion Center, a joint effort with the FBI and HHS-OIG designed to break down information silos and use coordinated data analysis to identify and dismantle emerging fraud schemes more quickly.
Two days later, on July 2, 2025, the DOJ announced the formation of a new FCA Working Group, a task force focused on identifying and addressing fraud across federally funded health programs, with particular attention to Medicare Advantage and Medicaid managed care. The Working Group is also expected to focus scrutiny on:
- Drug, device, and biologic pricing or rebate schemes;
- Barriers to patient access, including network adequacy violations;
- Kickbacks tied to federally funded health products;
- Defective medical devices that could compromise patient safety; and
- Manipulation of electronic health records to drive unnecessary Medicare utilization.
Why This Matters If You’re Under Investigation
Given how aggressively regulators and prosecutors are pursuing these cases, and how much bigger these enforcement actions have become, anyone facing a federal investigation or indictment for a health care violation needs to take it seriously from day one. If you or a family member finds yourselves in this position, you need experienced legal counsel who understands the full landscape of health care fraud law and has the resources to mount an effective defense.
