What Constitutes Healthcare Fraud? Common Examples and Legal Consequences

Spencer & Associates | Experienced White Collar Legal Defense in Dallas, TX

If you’ve been accused of or charged with healthcare fraud, you’re facing serious and far-reaching repercussions in both your professional and personal life. In fact, if fraud is proven, you could be looking at incarceration, fines, professional sanctions and reputational damage, the effects of which linger long after litigation has ended.

Perhaps you have already been the subject of a federal probe, where investigators spent months gathering compelling evidence against you from your billing records or communications. This unsettling scrutiny is all the more stressful because you may not even have known it was happening.

The results of that thorough investigation could mean the government has a significant advantage over you in court, allowing them to frame a narrative that you had the intent to defraud or did so with reckless disregard.

With an accusation or charge of this magnitude, you’ll need guidance and support. Arnold Spencer has decades of experience helping clients address fraud allegations to minimize legal consequences and avoid conviction.

What You Need To Know About Healthcare Fraud

Healthcare fraud occurs when medical providers or individuals knowingly and willingly submit false information to insurance companies or government programs, such as Medicare or Medicaid, to obtain payment or services.

Healthcare fraud is both a federal and state crime. As such, it is frequently investigated and prosecuted by:

• Department of Justice and the US Attorney’s Office (investigates and prosecutes)
• Medicaid Fraud Control Units of the US Department of Health and Human Services (investigates and prosecutes)
• Federal Bureau of Investigation (investigates)

To understand what’s at stake, let’s examine some of the different types of healthcare fraud and their potential consequences:

False Claims Or Phantom Billing

False claims occur when medical providers or equipment suppliers submit claims for services (office visits, therapy sessions or tests) or durable medical equipment (e.g., wheelchairs, ventilators or braces) that were never delivered.

Knowingly and intentionally submitting false claims is a violation of the False Claims Act. If convicted, you could face:

• Criminal healthcare fraud charges
• Treble damages (damages equal to 3x the damages sustained by the government)
• Penalties of $14,000 to $28,000+ per claim
• Five to 20+ years in prison in major cases

Upcoding

Upcoding occurs when a medical service provider charges for more complex or expensive medical services or procedures than were actually delivered. Examples include billing for 60 minutes of therapy when only 30 minutes were delivered, billing a routine check-up as a more involved first-patient visit or billing a minor procedure as major surgery.

Upcoding carries the following penalties:

• Recoupment — federal payers or insurance companies reclaim overpayments following an audit
• Criminal charges for repeated and intentional violations
• Federal program exclusion
• The same civil penalties you’d face for false claims

Kickbacks And Bribes

Kickbacks and bribes involve offering anything of value — cash, fees, promotions or expensive gifts — in exchange for referrals. Common examples include:

• Pharmaceutical companies financially rewarding physicians for prescribing their products
• Medical testing laboratories paying doctors for referrals
• Medical doctors receiving free or discounted rent in exchange for using a company’s services

Legal consequences include:

• Potential federal felony charges
• Imprisonment for up to 10 years
• Heavy fines and damages in the tens of thousands per incidence of kickback
• Professional discipline in the form of license suspension or revocation

Self-Referral

Self-referral, a violation of the Stark Law, is the act of referring patients for designated health services or entities paid for by Medicare or Medicaid, where the referring medical professional has a financial interest.

Penalties include:

• Mandatory repayment
• Treble damages
• Civil financial penalties
• Exclusion from federal programs

Unbundling Or Fragmented Billing

Unbundling is the act of billing components of a procedure separately that were previously grouped to increase payments from Medicare, Medicaid or private insurers. The motivation for doing this is that revenue from the unbundled procedures exceeds the bundled rate.

Penalties for unbundling include:

• Mandatory restitution of the overpayment
• Civil fines
• Criminal prosecution
• Exclusion from federal programs
• Potential imprisonment

Other Forms Of Health Care Fraud

In addition to the offenses listed above, there are a number of other forms of health care fraud:

• Impersonating a medical professional in an effort to submit fraudulent claims for reimbursement
• Providing unnecessary treatment to maximize reimbursement
• Prescription fraud — issuing medically unnecessary prescriptions or falsifying prescriptions
• Patient Fraud — billing services to stolen identities, fake beneficiaries or deceased individuals
• Falsifying cost reports or financial statements to inflate reimbursements
• And more . . .

Want To Know More About Defending Against Health Care Fraud?

In a healthcare fraud case, the prosecution must either prove you knowingly and willingly defrauded a health care program (in a criminal case) or did so with reckless disregard (in a civil case). Your defense against these charges depends on demonstrating that you lacked the intent to commit fraud or the knowledge that your actions were fraudulent.

Arnold Spencer has more than three decades of experience successfully defending clients against fraud charges. If you’re wondering if you can avoid conviction or have your charges or penalties reduced, call him today at (214) 376-4441 for an initial consultation and a review of your case.