Philadelphia Federal Healthcare Fraud Charges: Investigation to Indictment

Philadelphia Federal Healthcare Fraud Charges: From Investigation to Indictment

Healthcare fraud—it sounds bad. And it is. But what exactly constitutes healthcare fraud, and what happens when someone gets charged with it? This article breaks down the step-by-step process, from investigation to indictment.

Let’s start at the beginning: how does a healthcare fraud investigation even begin? Well, federal agencies like the FBI, HHS-OIG, DEA, and IRS often rely on whistleblowers to initiate cases. These can be current or former employees of a healthcare company who notice shady billing practices or unnecessary medical procedures being performed. Healthcare fraud can also be detected through data analysis by CMS Medicare contractors who identify aberrant billing patterns.

Once a potential case of fraud is identified, the appropriate federal agency opens an investigation. This usually begins with a subpoena for medical records, billing records, emails, corporate minutes, etc. Investigators review these documents plus interview witnesses to determine if fraud actually occurred—and to what extent.

Some common schemes they look for include:

• Billing for services that were never performed
• Billing for unnecessary tests or procedures
• Upcoding services (billing for more expensive procedures than were actually done)
• Paying kickbacks for patient referrals
• Misrepresenting diagnoses to justify tests or procedures

If fraud is confirmed, the agency involved calculates the financial loss to government healthcare programs like Medicare. The total fraud amount often reaches into the multi-millions.

At this point the agency generally coordinates with the local U.S. Attorney’s Office to pursue criminal charges. This leads us into the indictment phase.

What does it mean to be indicted? Well an indictment is when a federal grand jury hands down a formal criminal charge. Defendants are often indicted on multiple felony counts per the specific healthcare fraud schemes uncovered. Some laws frequently cited include:

• False Claims Act – prohibits knowingly submitting false claims for payment to the government
• Anti-Kickback Statute – prohibits paying kickbacks for federal healthcare program referrals
• Stark Law – prohibits physician self-referrals
• Health Care Fraud Statute – prohibits healthcare fraud schemes to defraud any healthcare benefit program

Penalties are based on the total fraud loss amount and can include hefty fines and many years in prison.

Prosecutors typically offer a plea deal to defendants who agree to cooperate. This usually involves pleading guilty to certain charges in exchange for dropping others. Defendants may also be asked to testify against co-conspirators.

Of course defendants can fight charges by going to trial. Possible defenses include arguing the billing errors were accidental or blaming subordinates. But given the resources federal agencies devote to these investigations, building an effective defense is challenging. Healthcare fraud trials often result in convictions and stiff sentences.

As we can see, healthcare fraud is not taken lightly. Significant penalties apply to those who try to cheat Medicare, Medicaid, or other government healthcare programs. And with whistleblowers and data analysis programs on patrol, it’s getting harder than ever to hide fraudulent schemes. For medical companies in Philadelphia and beyond, compliance is critical.