Health Care Fraud

Healthcare fraud is a serious offense prosecuted at the federal and state levels. It involves deliberate actions to gain improper financial gain through healthcare programs. Authorities prioritize these cases because of their effect on public trust and the use of critical resources. Convictions often carry steep fines, mandatory restitution, and prison terms, underscoring the need for a robust legal defense strategy.

If you are charged with healthcare fraud, you should move quickly to protect your rights and effectively fight the charges. At Pasadena Criminal Attorney, we will help you navigate the legal challenges of the charges and develop a defense strategy tailored to your circumstances.

An Overview of Healthcare Fraud

Healthcare fraud occurs when you falsify or deliberately misrepresent information on the bills you submit for payment, intending to be reimbursed for services that were not provided, when they were not necessary, or when they were overvalued. This deceptive behavior includes inflating charges, billing for services never rendered, falsifying medical records, or manipulating documentation to bill for higher amounts from insurers.

California Penal Code Section 550(a) addresses these fraudulent practices. This law makes it illegal to:

• Submit false or fraudulent claims for reimbursement with the knowledge that your claim is false or fraudulent

• Submit a false statement or misrepresent facts to an insurer to obtain payment on a claim

• Conspiring with others to commit these deceptive actions

People commonly commit health care fraud through several schemes, particularly:

• When you bill for services and treatments that never took place, or you submit claims for benefits never delivered

• You change or falsify information to receive payments illegally

• You make multiple claims by sending duplicate requests for the same service to secure extra reimbursement

• You manipulate billings through undercharges without overcharges to create inconsistencies or hide fraudulent actions

• You prepare writings to support fraudulent claims, creating documents to justify improper payments

Let us take a closer look at these fraud schemes in greater detail.

Submitting Fraudulent or False Claims

Submitting fraudulent or false claims is probably the most common and serious healthcare fraud. It involves several unfair practices used to earn financial gains from health care providers and insurers illegally. One way is to charge insurance companies for services that are not billed to out-of-pocket patients. In this case, you would file claims for the treatments or procedures you provide to out-of-pocket patients and only bill the insurance for those same services, taking advantage of the difference.

Upcoding is another common fraudulent act in which you bill for more expensive services or procedures than those performed. The higher costs are inflated, meaning you receive an increased reimbursement, and the insurance provider is defrauded in the process. It is also a serious issue to bill for unnecessary services. This involves treating or performing procedures that patients do not need and billing the insurance provider as if they do.

Furthermore, healthcare fraud also involves unbundling. This deceptive practice involves separating services or procedures that should be billed together to pay more than you should for each separately.

Claiming Undelivered Benefits

You engage in deceptive practice when you request payment for treatments or procedures you did not provide. This fraudulent practice targets insurance companies or Medicare and Medi-Cal insurance programs, aiming to receive reimbursement for care that never occurred.

In this case, you may have billed for a service you did not provide or misrepresented the type of care given so that it appears you gave legitimate care. This misleads the insurers into paying you for undelivered services. By doing so, you exploit the system to divert funds that should have been used to help with real medical needs.

Fraud of this type harms both patients and providers. Providers risk losing credibility with insurers, being fined, or perhaps even penalized for not providing patients the care they have been charged for. The broader impact also diminishes the effectiveness of healthcare programs. It makes it harder to ensure that legitimate claims are processed promptly and accurately.

Filing Multiple Claims

Submitting multiple claims for the same service is a clear act of healthcare fraud. This means you file duplicate requests for identical services to receive excessive reimbursement. Furthermore, providers will submit the same claim to multiple insurers or create numerous claims for one procedure to inflate reimbursement amounts.

This deceptive practice undermines the integrity of the healthcare billing system and sets off alarm bells during audits. Programs, including Medicare, Medicaid, and private insurers, use sophisticated tracking systems to flag suspicious billing patterns, like multiple claims for the same service. When these duplicates surface, they point to fraud and will inform the authorities for prosecution.

Duplicate billing harms healthcare systems' financial stability by moving resources that should go to actual claims. It also increases healthcare costs and hurts insurers, patients, and providers. Furthermore, the healthcare system loses the trust of patients and insurers since both depend on trustworthy and honest billing practices.

Billing Manipulation Through Undercharging Without Overcharging

When you undercharge for your services, you bill less than what is due to make it seem cheaper. It may seem harmless, but when done intentionally, it is a tactic to mask overcharges. Instead, overcharging is when you charge more for a service than was provided in the hopes of getting more money than you are owed.

If undercharged and overcharged, this results in a deceptive billing pattern that can go unnoticed initially but is still fraud. For example, if you undercharge for some services but fail to submit corresponding overcharges, you might believe you are covering your tracks. However, these actions continue to mess with the billing system, harming insurers or government health programs and damaging the integrity of the healthcare system.

This manipulation is not a mere error. It is a calculated way to fake billing records to get an unjust reimbursement. If you undercharge without offsetting the overcharges, you have a hidden discrepancy that regulators and insurance companies will not initially detect.

Writing Down Corroboration of Fraudulent Claims In Healthcare

Writing supporting fraudulent claims means you act deliberately, intending to alter or fabricate documentation to back up false billing. Healthcare providers could, instead, create or change diagnosis or treatment plans to make it seem like services were rendered when they were not or to inflate the complexity of the care they were providing. The deceit can be as simple as changing dates and medical codes to falsifying test results or procedure notes to secure higher reimbursement.

When you misrepresent facts supporting a claim, you defraud insurers and mislead patients regarding the quality of care they receive. Whether you adjust patient histories, exaggerate diagnoses, or alter treatment plans, you create a false narrative that leads both payers and recipients to gain unjust profit.

How Will You Know That You Are Under Investigations for Healthcare Fraud?

You can receive several legal documents notifying you that you are under investigation for healthcare fraud, each signifying a different stage in the investigation. The documents include the following:

• Civil Investigative Demand (CID) — This is a formal request from the Department of Justice or other government agencies like the state Medicaid programs that requests you to produce documents, answer questions, or testify in a civil investigation of possible fraud. Receiving a CID means that authorities examine your practices, especially regarding billing or other healthcare activity.

• A grand jury subpoena — This document is a written order from a grand jury that requires you to appear and testify or to produce documents. If you receive this, you are either a witness or a potential defendant in an inquiry into healthcare fraud. The grand jury’s role is to hear the evidence and decide whether or not to charge you.

• A search warrant — This warrant allows law enforcement to search your premises for evidence of fraud. A judge issues a search warrant based on probable cause. The authorities seek a search warrant when they believe there is evidence of criminal activity to be found at your location. The search warrant indicates that the investigation has gone far enough so that physical evidence can support criminal charges.

• A grand jury target letter — This letter from the government indicates that the government considers you the primary focus of the investigation. It lets you respond before the grand jury decides whether to indict you on criminal healthcare fraud charges.

• A grand jury subject letter — If you are not the target but are under investigation, you will receive a grand jury subject letter. This letter informs you that the grand jury is investigating your involvement in the fraud but has not yet decided if it will bring charges.

Penalties For Engaging In Health Care Fraud

Under California law, the value of fraudulent activity will determine whether healthcare fraud is a misdemeanor or a felony. Most frauds valued at $950 or less are charged as a misdemeanor. A conviction for a misdemeanor violation could result in:

• Up to 6 months in jail

• A fine of no more than $1,000

Charges for fraud exceeding $950 are more serious. The offense is a ‘wobbler,’ meaning it can be charged as either a misdemeanor or a felony. Felony convictions carry harsher penalties, including:

• Up to 5 years in state prison

• Jail time of up to 10 years, or a fine of up to $50,000 or double the amount of the fraud, whichever is greater

Federal Health Care Fraud Charges

Serious federal charges can result from healthcare fraud, particularly:

• Insurance fraud

• False claims

• Kickbacks

• Patient access violations

• Healthcare fraud conspiracies

Federal authorities, specifically the FBI and the Department of Justice (DOJ), investigate these offenses. Federal charges often carry significant penalties. Federal authorities would instead bring federal charges if the fraudulent activity affected a federal program like Medicare or Medicaid, crossed state lines, or if the defendant or defendants were part of a conspiracy to defraud the government. Federal charges are usually filed when the scope and impact of the fraud and its harm to national programs are great.

Federal False Claims

Submitting false claims to government programs is one of the primary areas of concern in healthcare fraud. Healthcare providers and organizations under the Federal False Claims Act (FCA) must avoid submitting false information for reimbursement.

Filing false claims will result in a maximum imprisonment of 5 years and substantial fines. In addition to imprisonment, civil penalties are imposed, up to $10,000 for each false claim. You may have to pay back three times the amount the government spent to address and resolve the fraudulent claims.

The government aggressively enforces the False Claims Act because it protects the integrity of programs like Medicare and Medicaid. These programs are essential to accessing healthcare for vulnerable populations, and any fraudulent billing harms taxpayers and beneficiaries. Federal authorities consider violations serious because they erode the public’s trust in these programs and divert needed resources away from people who need them.

Kickback Violations

An aspect of healthcare fraud is being involved in kickbacks. Kickbacks involve the exchange of money or other incentives for patient referrals. Inflated costs, unnecessary procedures, and manipulation of medical decisions that can hurt patients and the healthcare system result from kickbacks.

The penalties for participating in kickback schemes are profound. If convicted of a felony relating to kickbacks, you would be fined up to $10,000 and imprisoned for up to ten years. The penalties are still substantial, even for a misdemeanor kickback offense, with fines of up to $20,000 and up to one year in prison.

Many kickbacks are hidden in what appear to be legitimate transactions. The people involved in kickback schemes include:

• Healthcare providers or organizations

• Pharmaceutical companies

• Suppliers

• Other healthcare professionals

Fraudulent practices caused by kickbacks inflate healthcare costs and distort medical decision-making. The government enforces anti-kickback laws to preserve the integrity of the healthcare system by protecting against conflicts of interest and making sure that providers make decisions based on what is best for the patients and not the financial incentives.

Healthcare Fraud Conspiracy

Healthcare fraud conspiracies are also targeted by federal law. A healthcare fraud conspiracy involves cases where more than one person conspires with someone else to defraud the government. Since the crime is done in collaboration, you could face harsher penalties if convicted. Healthcare fraud conspiracies involve hospitals, physicians, pharmaceutical companies, and even patients conspiring with each other to introduce fraudulent claims, kickbacks, and bills for unnecessary service. Participating in a healthcare fraud conspiracy is punishable by imprisonment, fines, and restitution. The longer the scheme goes on, the more people are involved, and the more serious the consequences.

When more than one party is linked in a coordinated way to defraud a Medicare or Medicaid program, the charge is known as conspiracy. If federal authorities can prove a conspiracy, those involved will face substantial criminal penalties, including the potential for lengthy prison sentences and restitution owed to the government.

Moreover, if you are convicted of healthcare fraud, it does not matter whether the charges are state or federal. Your medical license will be revoked. This is one of the most serious consequences healthcare professionals face because it robs them of the ability to practice in the field. Losing your medical license can effectively end your career and significantly taint your professional reputation. It may also prevent you from securing a job in any healthcare-related field in the future.

Defenses You Could Use in Your Healthcare Fraud Case

There are several defenses to healthcare fraud charges you can challenge. These defenses question the allegations' validity or reduce the charges' severity. Common strategies include:

Lack of Intent

You can challenge the healthcare fraud charges by showing that you had no intent to commit fraud. This often includes showing a mistake of fact. A mistake of fact occurs when you make an honest error in understanding the situation, leading you to submit claims without knowing that they were wrong or fraudulent. You can argue that you did not realize the fraudulent claims and submitted them unintentionally.

Say, for instance, that you misinterpreted the facts of a claim or were unaware of billing discrepancies. You can argue that the errors were unintentional. This argument highlights the lack of deceptive intent, crucial for establishing healthcare fraud. In fraud charges, prosecutors must prove that you knowingly and intentionally submitted false claims for reimbursement. If you show that you made an honest mistake, you can challenge the prosecution’s case and undermine their fraud claims.

You may be spared a conviction if you can prove that any errors were due to mistake and not intentional deception.

Lack of Knowledge

If you are charged with healthcare fraud, arguing that you did not know what you were doing can be a good defense. Most healthcare fraud requires intent. It could undermine the prosecution case if you can show the court that you were unaware of the fraudulent nature of the claims. Fraud is not an isolated act but a pattern of deliberate attempts to deceive. Without this intent, the charges lose their foundation.

One way to establish this defense is to show that you did not know the claims were false. For example, you might contend that you were misled by incorrect information from others in your office or practice. If someone else submitted fraudulent claims unknown to you or without your permission, you can argue that they did so because they believed you would not notice. If you can prove you did not know about the fraudulent activity, you can prove you did not act with the intent to deceive.

Healthcare fraud can also arise from an error in the billing, miscode, or misunderstanding of an insurance policy. If you were unaware of these errors and trusted someone else to handle billing and coding, you assert the no-knowledge defense to challenge the charges. This would involve showing that you did not actively participate in the fraudulent conduct and that any mistakes were unintentional.

This defense is supported by providing evidence. In this case, you may have to show that you did not know the fraudulent claims existed, for example, through documentation, including emails or statements of colleagues or staff. Another way to establish that you did not know of any wrongdoing is by testimonials from individuals involved, which can also help prove that you did not know of any wrongdoing.

If you can prove that you did not know and did not intentionally file false claims, the courts could dismiss the charges or reduce the penalties.

You Were Entrapped

You can argue that law enforcement officers entrapped you if they played a pivotal part in forcing or pressuring you to commit fraud. Entrapment occurs when government agents induce you to commit a crime they would not have otherwise done. When asserting this defense, you will argue that you would not have acted fraudulently if law enforcement officers were not involved.

To prove entrapment, you must show two key elements:

• Government involvement — You must prove that law enforcement or some other government agent played a significant role in persuading or coercing you to commit the fraudulent act. It is insufficient for them to provide an opportunity. Their actions must have extended beyond that to induce the criminal act.

• Lack of predisposition — You must show that you were not already predisposed to commit fraud. If law enforcement's actions were the primary reason you engaged in fraudulent behavior, this could support your defense. For example, if you were pressured into making false claims because law enforcement used deceptive tactics or offered rewards.

Find a Fraud Crimes Defense Attorney Near Me

Fraudulent billing for inflated services, phantom services, or false claims of medical necessity has a far-reaching impact on the system beyond the financial losses they inflict. For those accused, the personal repercussions are severe, including the risk of fines, prison, and loss of professional credentials.

If you are accused of healthcare fraud, contact an experienced healthcare fraud defense attorney at Pasadena Criminal Attorney to review the facts of your case, develop a tactical defense, and fight for your rights. We will walk you through the process, explain your legal options, and fight for the best result. Contact us at 626-689-2277.