The United States government has enacted stringent penalties for individuals convicted of healthcare fraud. In this article, we explain what constitutes federal healthcare fraud and the potential criminal penalties that may be imposed following a federal indictment and conviction.
Stechschulte Nell, Attorneys at Law in Tampa represents a wide variety of healthcare professionals who have been charged with violating the federal laws prohibiting healthcare fraud. Aggressive criminal defense of federal indictments requires a deep knowledge of the substantive law and an ability to conduct a strategic pretrial strategy that best serves each client’s individual interests.
Healthcare professionals facing federal prosecution are at risk of losing not only their liberty but their hard-earned career and social standing. Healthcare fraud is a serious criminal offense requiring experienced federal criminal defense attorneys. Stechschulte Nell provides qualified, skilled, and experienced criminal defense representation to healthcare professionals.
Federal Healthcare Fraud Laws
Federal healthcare fraud is governed by several main statutes, including the False Claims Act (FCA), the Anti-Kickback Statute (AKS), and the Health Insurance Portability and Accountability Act (HIPAA). Additionally, the Social Security Act and the Affordable Care Act (ACA) contain provisions specifically addressing fraud in Medicare and Medicaid.
- False Claims Act (FCA): The FCA is one of the government’s primary tools in combating healthcare fraud. Under the FCA, any individual or company that knowingly submits false claims to obtain a federal healthcare payment to which they are not entitled is liable for a civil penalty of not less than $5,000 and not more than $10,000 plus three times the damages sustained by the government as a result of the person’s action.
- Anti-Kickback Statute (AKS): The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration as inducement or reward for referrals to services that are reimbursable by a Federal healthcare program like Medicaid and Medicare. This statute is often used with the Stark Law which prohibits such referrals by healthcare professionals to service providers in which they have a financial interest or from which they are receiving payments.
- Health Insurance Portability and Accountability Act (HIPAA): While most people understand that HIPPA provides extensive protections for patient health information, HIPAA includes provisions that combat healthcare fraud and abuse. Under these terms, healthcare providers are authorized to share patient information with the Office of Inspector General and other law enforcement agencies when required to prosecute healthcare fraud.
- Wire Fraud: Using interstate communications or transmission equipment in the course of or in furtherance of a fraudulent healthcare scheme can result in a federal wire fraud conviction. This includes the use of email, online billing submission software or programs, telephone, text, or other means of interstate communications. The penalty for each conviction includes up to 20 years in federal prison.
- Money Laundering: Similarly, a related money laundering conviction can result in up to 10 years in prison. In the context of healthcare fraud, money laundering could include moving or disguising funds received as reimbursement for fraudulent claims in another person’s account with the intent to obscure their criminal origin.
Read More > What Types of Crimes are Considered Money Laundering?
Penalties for Healthcare Fraud
The penalties for federal healthcare fraud are severe and multifaceted, including criminal, civil, and administrative consequences. They are designed not only to punish wrongdoing but also to deter future violations.
Criminal Penalties
Conviction on criminal healthcare fraud charges can result in expensive fines and long years of imprisonment. These penalties typically depend on the fraud and the amount of money involved.
- Imprisonment: A person convicted of healthcare fraud under 18 USC §1357 for “knowingly and willfully executing or attempting to execute a scheme or artifice” to defraud a healthcare or any healthcare benefit program faces up to 10 years in prison per offense. If the fraud involves an injury to a patient, the person convicted faces up to 20 years in prison. In the case of a patient’s death from the convicted person’s actions, the penalty may include life in federal prison.
The AKS can impose up to 10 years of imprisonment for each violation in addition to fines.
- Fines: The financial penalties can be substantial. Under the FCA, fines can amount to up to three times the program’s loss plus $11,000 to $22,000 per claim. The AKS penalties can include fines of up to $100,000 per violation.
Civil Penalties
In addition to criminal penalties, individuals and entities found liable for healthcare fraud may face civil penalties, including substantial fines and the potential for treble damages under the FCA.
- Monetary Penalties: Civil fines under the FCA can reach up to $23,331 per false claim, adjusted for inflation, in addition to three times the amount of damages sustained by the government.
- Exclusion from Federal Healthcare Programs: Convicted entities and individuals can be excluded from participating in Medicare, Medicaid, and other federal healthcare programs, effectively barring them from practicing in their field.
Administrative Penalties
Administrative sanctions may also be imposed, including the revocation of medical licenses, loss of board certifications, and the imposition of corrective action plans to prevent future violations.
Examples of Healthcare Fraud
The ways in which a healthcare professional or related service provider can defraud Medicaid, Medicare, or other federal healthcare programs are almost innumerable. Some of the illegal activities most often cited in federal healthcare fraud indictments are these:
- Billing for services not provided,
- Falsifying patient diagnoses to conduct medically unnecessary surgery, procedures, tests, or other services,
- Falsely characterizing services performed to obtain higher reimbursement for services not performed,
- Taking or paying kickbacks for patient referrals,
- Upcoding (billing for more expensive procedure than was performed),
- Using another person’s identification to obtain federally paid healthcare,
- Permitting or conspiring with healthcare providers to bill for services you never received in exchange for receiving some benefit.
Defenses to Healthcare Fraud Charges
As with all criminal charges, the government is required to prove the defendant’s guilt beyond a reasonable doubt on every element of each offense. One of the most important and necessary elements of healthcare fraud is the defendant’s intent to defraud.
Experienced healthcare fraud defense lawyers at Stechschulte Nell, Attorneys at Law in Tampa will effectively represent defendants in healthcare fraud indictments by challenging the credibility and reliability of the government’s evidence. Among the successful defenses in healthcare fraud cases are the following:
No Intent to Defraud – Fraud is a specific intent crime, meaning that no conviction may occur unless the government proves the defendant knowingly and willfully acted to deceive the victim, in this case, the government’s Medicaid and Medicare programs.
If a healthcare provider’s billing practices are disorganized, sloppily maintained records, overbilling or incorrect billing may occur without the specific intent to defraud. However, government auditing programs using algorithms designed to identify incorrect billing patterns may flag such activity as healthcare fraud.
Skilled and knowledgeable healthcare fraud defense lawyers can successfully expose the lack of criminal intent and defeat the charges.
Mistake of Fact – Complications in the medical billing process can result in simple errors of miscoding a bill. For example, a billing clerk may mistake what procedure was performed and bill for a more extensive and expensive procedure. No crime is committed. However, if discovered by federal auditors and criminal investigators, the innocence of the mistake may not be immediately evident.
Read More> What are the Penalties for Healthcare Kickbacks?
Healthcare Fraud Defense
If you are charged with federal healthcare fraud in any circumstances, contact Stechschulte Nell today. We will review your case and will work tirelessly to mitigate the charges you may face.
