It's estimated that as much as 10% of all the money spent on health care every year is paid out on fraudulent claims. Health care fraud is a crime in which someone uses lies, deceptions, or falsehoods when filing a health care claim in an effort to make a profit or to gain some type of benefit. There is no single type of health care fraud, and health care providers, patients, and even health insurers can commit this crime. Health care fraud is a crime addressed by both state and federal laws, and one that has significant potential penalties.
It's important to distinguish health care fraud from mere mistakes, omissions, or improper payments. To commit fraud, a person must knowingly engage in a plan, scheme, or activity to provide falsehoods, with the intent to achieve some financial gain. Fraud is not the same as, for example, making a mistake that results in a patient being billed for a treatment he or she did not receive. By contrast, when a health care provider knowingly provides unnecessary treatments or procedures and bills an insurer for those procedures in order to make a profit, such conduct is health care fraud.
Although anyone involved in the health care process can commit health care fraud, it is most commonly committed by providers in an attempt to obtain more money from insurers. Common fraud schemes involve double-billing or filing duplicate claims for the same service, filing claims for services never provided, billing for services not covered by an insurer's policy, and even providing kickbacks for referrals.
Common fraud schemes perpetrated by patients include faking a medical condition in order to receive medications that the patient then sells, falsifying medical claim information, or using someone else's insurance information to receive health care services.
State laws on healthcare fraud differ considerably. State healthcare fraud laws typically fall into one of three types: false claims laws, self-referral laws, and anti-kickback laws. Some states have laws that address all three types of activity, while others may have only one or two, and some may have none at all.
In addition to any state prohibitions against health care fraud, federal health fraud law will apply in most situations. This law is very broad, applying when anyone makes an attempt to defraud any health care benefits program with the intent to gain control of money or property. The federal law applies in all states regardless of whether state law punishes health care fraud as a crime.
(18 U.S.C. § 1347.)
The health care system has both private and public health insurers, and healthcare fraud can involve either of them. The two public health care insurers—Medicaid and Medicare—have long been targets of fraudulent claims, and there are a number of federal laws which apply to such situations. Specific federal laws provide felony penalties for health care providers who make false claims or statements to the federal government, such as those seeking false reimbursement claims. It's also a crime to make any false statements or representations in connection with the delivery or payment of health care benefits. (18 U.S.C. §§ 287, 1001, 1035.)
Federal law provides for both civil and criminal penalties for health care fraud. The difference between a civil penalty and a criminal one is that criminal penalties allow for fines, prison, and an order to pay restitution (compensate the victim for any money lost as a result of the fraud). Civil penalties result in an order to pay restitution (but no jail time or fine).
Criminal health care fraud charges, both at the state and federal level, can lead to serious consequences for anyone convicted.
Health care fraud can seem like a minor crime, especially when an individual commits an act that seems like it has little impact and doesn't really "hurt anyone." But a conviction for health care fraud, especially when the defendant is a professional who depends on a license to practice, can irreparably change the course of that professional's life. Even being investigated for health care fraud can ruin one's professional reputation and make life incredibly difficult.
The moment you are approached by investigators about a potential fraud case, you need to contact a criminal defense attorney. You can unknowingly incriminate yourself anytime you speak to an investigator if you don't have legal advice. Local criminal defense attorneys are the only people capable of providing you with legal advice in light of their knowledge of the law, as well as their experience with local prosecutors, courts, and criminal investigations.
If you're being investigated for breaking a federal law, your case will be handled in the federal court system. Be sure that the lawyer you choose has experience handling federal cases.