Criminal Defense Lawyers

18 U.S.C. § 1347 – Health care fraud

What is 18 U.S.C. § 1347 – The Federal Health Care Fraud Statute?

So, you‘ve been accused of health care fraud. Take a deep breath – it‘s going to be okay. We get it, this is scary stuff. But we‘re here to guide you through it.18 U.S.C. § 1347 is the federal statute that criminalizes health care fraud. It makes it illegal to knowingly execute, or attempt to execute, a scheme to defraud any health care benefit program.Now, what does that actually mean? Let’s break it down.

What Qualifies as a “Health Care Benefit Program”?

Under the law, a “health care benefit program” is defined pretty broadly. It covers any public or private plan that provides medical benefits, items or services. 3 So we’re talking:

• Medicare
• Medicaid
• TRICARE (military health care)
• Private health insurance plans
• Employer or union health plans
• And more

Basically, if it’s a program that pays out health care claims, it’s covered under § 1347.

What is Considered “Fraud”?

Fraud boils down to any intentional deception or misrepresentation made to obtain payment or benefits to which you’re not entitled. 2 Common examples include:

• Billing for services that were never actually provided (“phantom billing”)
• Billing for more expensive services than what was provided (“upcoding”)
• Ordering unnecessary tests or procedures
• Paying kickbacks for patient referrals
• Using another person’s insurance information

The key is that you knowingly engaged in deceptive conduct to get money or benefits you didn’t legitimately deserve.Now, you don‘t need some evil, malicious intent for it to be fraud. Willful ignorance or reckless disregard for the truth is enough. 3 So if you stuck your head in the sand about shady billing practices, that‘s still fraud.

What are the Penalties for Violating 18 U.S.C. § 1347?

Okay, so those are the basics of what constitutes health care fraud under § 1347. Now the scary part – the penalties.For a standard violation with no aggravating factors, you could face:

• Up to 10 years in federal prison
• Fines up to $250,000 for individuals (or $500,000+ for organizations) 3

But it gets worse if the fraud results in serious bodily injury or death. If serious injury occurs, you’re looking at up to 20 years behind bars. And if someone dies, you could get life in prison. 3On top of that, you‘ll likely face exclusion from federal health care programs, which is basically a career death sentence for medical professionals. And the government can also try to claw back any illegally obtained funds through civil penalties and asset forfeiture.So in summary – health care fraud charges are no joke. The feds really crack down on this stuff.

Common Health Care Fraud Schemes

Okay, now that we’ve covered the basics of § 1347, let’s dive into some of the most common types of health care fraud schemes that can land you in hot water:

1. Phantom Billing

This is probably the most straightforward type of fraud – simply billing for services, tests, or equipment that were never actually provided or rendered to the patient. 2 It‘s fraudulent billing, plain and simple.

2. Upcoding

We touched on this earlier, but upcoding means billing for a more expensive service than what was actually provided. For example, billing for a higher-level office visit code when the patient just had a basic check-up. 5

3. Unbundling

The opposite of upcoding – this is when you improperly “unbundle” services that are supposed to be billed together under a single code. By billing each component separately, you can inflate the total charges. 5

4. Unnecessary Services

Ordering tests, procedures, or services that aren’t actually medically necessary is also considered fraud. Maybe you’re running every possible test to maximize billing. Or pushing expensive procedures that aren’t warranted. It’s all fraud if you‘re doing it just to make money rather than for legitimate patient care reasons. 5

5. Kickbacks

Offering or receiving kickbacks or bribes of any kind in exchange for patient referrals is a huge no-no. Even something as simple as paying for patient leads can be considered an illegal kickback. 5

6. Falsifying Records or Credentials

Creating fake patient records to support fraudulent billing is fraud. As is falsifying credentials, certifications or ownership information to circumvent rules and regulations. Basically, any intentional dishonesty in your paperwork can spell trouble. 2The bottom line? If you‘re being shady or deceptive in your billing and documentation practices to make more money, you’re committing health care fraud under § 1347. It’s that simple.

How to Avoid Health Care Fraud Charges

Okay, so those are some of the most common fraud schemes to watch out for. But what can you actually do to protect yourself and your practice? Here are some tips:

1. Implement a Robust Compliance Program

Having detailed policies, procedures and regular training in place is crucial. Your staff needs to understand what constitutes fraud, how to properly document and bill for services, and the severe penalties for non-compliance. An ounce of prevention is worth a pound of cure.

2. Conduct Regular Audits

Don’t just set it and forget it with your compliance program. You need to routinely audit your billing, coding and documentation to identify and correct any errors or potential fraud risks. Bring in outside experts if needed.

3. Maintain Detailed Patient Records

Sloppy or incomplete medical records make you an easy target for accusations of fraud. Be meticulous in documenting every service provided, the medical necessity, and any supporting diagnostic information.

4. Carefully Screen Employees and Contractors

Dishonest individuals are often the root cause of fraud schemes. Thoroughly vet all staff, contractors and vendors who will have access to patient data or billing information. Check credentials, references and prior disciplinary history.

5. Implement Strict Privacy Safeguards

Protect patient data like it‘s gold. Tighten access controls, encrypt files, and train staff on privacy protocols. Data breaches can enable identity theft and fraudulent billing schemes.

6. Respond Quickly to Complaints or Red Flags

If an employee, patient or auditor raises concerns about potential fraud – don’t ignore it or sweep it under the rug. Investigate promptly and take corrective action if warranted. Covering things up will only make it worse.

7. Consult a Health Care Fraud Attorney

Let’s be real – health care fraud laws are incredibly complex. When in doubt, get advice from an experienced attorney who specializes in this area. It could save you from making an innocent mistake that leads to disastrous consequences.At the end of the day, an ounce of prevention through robust compliance efforts is worth a pound of cure when it comes to avoiding crippling health care fraud charges and penalties.

What to Do If You’re Accused of Health Care Fraud

Okay, but what if it’s already too late for prevention? What if you or your practice is already under investigation for alleged health care fraud violations? Here’s what you need to do:

1. Don’t Panic, But Act Fast

Take a deep breath. Getting that target letter from the FBI, OIG, or other investigators is terrifying, we know. But panicking won’t help.You do need to act quickly though. The longer potential fraud goes unaddressed, the worse it can get. Hire an experienced health care fraud defense attorney immediately to protect your rights.

2. Don’t Speak to Investigators Without a Lawyer

Look, we get it – you may think you can just explain the situation and clear things up. But anything you say can and will be used against you. Politely refuse to answer questions until you have legal representation.Even if you‘re completely innocent, speaking without a lawyer present is a huge risk. You could inadvertently make statements that seem incriminating out of context.

3. Don’t Try to Alter or Destroy Any Records

As soon as you become aware of an investigation, ensure all potentially relevant records are preserved and untouched. Deleting or altering documents is a surefire way to turn a bad situation into an obstruction of justice charge.Your lawyer can determine what records may be relevant and ensure they are properly collected and maintained as evidence.

4. Conduct an Internal Investigation and Audit

Don’t stick your head in the sand. If there are any potential compliance issues, you need to get to the bottom of it and correct it immediately. Hire outside auditors and counsel to thoroughly investigate.Being proactive about identifying and remediating issues can potentially mitigate penalties down the road. It shows good faith and willingness to cooperate.

5. Negotiate With Prosecutors If Appropriate

Depending on the circumstances, your attorney may advise trying to negotiate a settlement or deferred prosecution agreement with the government. This could allow you to avoid criminal charges if you take remedial actions and pay fines/penalties.But the key is having skilled legal representation to negotiate from a position of strength. You don’t want to make admissions or concessions that undermine your ability to mount a vigorous defense if needed.

6. Mount an Aggressive Defense Strategy

If negotiating isn‘t an option or fails, you need to prepare for battle. Your lawyer will develop a comprehensive defense strategy tailored to the specific allegations against you.This could involve challenging the legal interpretation of laws and regulations, poking holes in the prosecution‘s evidence and theory, or asserting legal defenses like lack of criminal intent.The bottom line? Being accused of federal health care fraud is one of the most serious situations a medical professional can face. You need to take it seriously and have an experienced defense attorney in your corner from day one.