A large amount of money spent on health care every year is paid out in fraudulent claims. How much? About 10 percent they say. Health care fraud is a crime in which somebody uses lies, deceptions, or schemes when filing a health care claim in an effort to make a profit or to gain some type of benefit. Typical examples include pill mills (where the doctor, or someone else) writes scripts at large for narcotics, ordering top of the line wheelchairs and only delivering the base model to the customer, and getting home health care providers to basically “reverse” the order and get a doctor (or someone in the office) to sign an order for home health care. Of course, there are many variations. I’ve been to trial on these kinds of cases in federal court, and it is a very intense, paper rich and usually video and photo extensive prosecution. When your practice (and your life really) are on the line, you need an attorney with experience.
Fraud vs. Mistake:
One line of defense is trying to demonstrate the actions were a mistake and not based in fraud. If one makes a mistake, or an omission, or improper payment, that is not necessarily fraud. For instance, if a health care provider mistakenly bills a patient for a procedure that the patient did not receive, that is a mistake and not fraud. 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. Thus, if a health care provider knowingly provides treatments or procedures that the provider knows patients do not need, and then bills an insurer for those procedures in order to make a profit, then the health care provider has committed fraud.
The feds can prosecute anyone in the health care process that commits health care fraud. It is most commonly committed by providers in an attempt to obtain more money from insurance carriers and/or Medicare or Medicaid. 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 enacted 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.
Medicare and Medicaid Fraud:
As I mentioned, the health care system has private and public health insurers, and healthcare fraud can involve either of them. The two public health care insurers, Medicaid and Medicare, are traditional targets of fraudulent claims, and there are a number of federal laws which apply to such situations. Specific federal laws criminalize making false claims in a Medicaid or Medicare claim (18U.S.C. section 287), making false statements (18U.S.C. section 1001), as well as related activity.
Federal law affords for both civil and criminal penalties for health care fraud. Criminal health care fraud charges, both at the state and federal level, can lead to solemn consequences for anybody convicted.
Health care fraud is a serious offense, and can lead to lengthy prison sentences. Making a false claim or false statement in relation to a Medicaid or Medicare claim can result in a 5 year prison sentence per offense, while a conviction for federal health care fraud can result in a 10 year sentence for each offense. If the health care fraud results in serious bodily injury to someone there is a potential sentence of up to 20 years in prison, while an act of health care fraud that results in someone's death has a potential life sentence.
A judge can order a defendant to pay back the amount of money it wrongly obtained as a product of the fraudulent act. Restitution is in addition to a fine, which is paid to the government.
As you can imagine, anyone convicted of health care fraud will likely face substantial fines. An individual who makes a false statement in a Medicaid or Medicare claim is looking at a fine of up to $250,000 per offense. If an organization that make false claims, it can result in up to $500,000 per offense. Again, that’s per offense.