17 Oct 23

What Constitutes Medicaid or Medicare Fraud? | Orlando Healthcare Fraud Attorney

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Last Updated on: 3rd November 2023, 07:11 pm

What Constitutes Medicaid or Medicare Fraud? | Orlando Healthcare Fraud Attorney

Medicaid and Medicare fraud is a big deal. As an Orlando healthcare fraud attorney, I see it all the time. People make mistakes, and sometimes those mistakes cross the line into fraud. But what exactly constitutes fraud when it comes to Medicaid and Medicare? Let’s break it down.

Basics of Medicaid and Medicare

First, let’s cover the basics. Medicaid is the government health program for low-income people. Medicare is the government health program for seniors 65 and older. Both programs are administered by the Centers for Medicare and Medicaid Services (CMS).

To participate in Medicaid, healthcare providers must enroll with state Medicaid programs. For Medicare, providers enroll with CMS directly. By enrolling, providers agree to comply with all applicable laws and regulations. If they don’t, they could face allegations of fraud.

Common Types of Fraud

Some of the most common Medicaid and Medicare fraud schemes include:

  • Billing for services not provided – This is straight up fraud. Billing for ghost patients or fake services.
  • Billing for unnecessary services – Ordering tests or procedures patients don’t need to pad the bill.
  • Billing for incorrect or upcoded services – Billing for more expensive services than were actually provided.
  • Kickbacks – Getting paid to refer patients to a certain healthcare provider.
  • Stark Law violations – Referring patients to other providers you have a financial relationship with.

Let’s go through these in more detail…

Billing for Services Not Provided

This type of fraud is often blatant and easy to prove. Examples include:

  • Billing for patients that don’t exist.
  • Billing for appointments that never happened.
  • Billing for procedures that were never performed.

In cases like these, prosecutors can show the services billed for never occurred. The provider can’t produce any records to justify the charges. It’s fraud, plain and simple.

Billing for Unnecessary Services

Proving “medically unnecessary” services can be trickier. There is often a gray area between appropriate and inappropriate care. Examples include:

  • Ordering excessive lab tests that have no clear purpose.
  • Prescribing treatments that are not clinically indicated.
  • Admitting patients to hospitals or nursing homes when it’s not needed.

Prosecutors typically rely on expert testimony to show these services were not medically necessary. But providers can argue it was simply a matter of professional judgment. This area gets muddy at times.

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Billing for Incorrect or Upcoded Services

Upcoding is a common scheme:

  • Billing for a more expensive service than was provided.
  • Using an inaccurate billing code to maximize reimbursement.

For example, billing a 30 minute psychotherapy session as 45 minutes. Or billing a basic office visit as a more complex visit. Prosecutors dig into medical records to reveal the true level of service.


The Anti-Kickback Statute prohibits paying for patient referrals. For example, a hospital can’t pay a doctor to send patients there. Common schemes include:

  • Paying recruiters to find Medicare/Medicaid patients.
  • Waiving patient copays to induce referrals.
  • Giving doctors free rent to send patients to a healthcare facility.

These arrangements undermine impartial medical decision making. Patients may receive unnecessary or poor quality care. The Office of Inspector General (OIG) treats kickbacks as a top enforcement priority.

Stark Law Violations

The Stark Law prohibits referrals between providers with financial ties. For instance:

  • A doctor refers patients to an imaging center he owns.
  • A hospital sends patients to a home health agency it has invested in.

These relationships can influence medical decisions. The Stark Law aims to avoid that conflict of interest. But there are exceptions in some cases.

Penalties for Healthcare Fraud

The penalties for Medicaid/Medicare fraud depend on the specifics of each case. But they can include:

  • Civil monetary penalties up to $100,000 per false claim.
  • Triple damages based on the amount claimed falsely.
  • Criminal fines up to $250,000 per false claim.
  • Up to 10 years in prison for healthcare fraud convictions.
  • Exclusion from Medicaid and Medicare programs.

These are severe sanctions. But prosecutors take healthcare fraud very seriously. The stakes are high given the costs involved.

How Investigations Begin

Healthcare fraud investigations can start in many ways. Here are some of the most common:

  • Whistleblower complaints – Disgruntled employees reporting misconduct.
  • Audits – Routine CMS audits detecting irregularities.
  • Data mining – Identifying outlier billing patterns through data analysis.
  • Patient complaints – Beneficiaries reporting suspect claims.

In most cases, a complaint or red flag leads to a deeper dive. Investigators dig into medical records, talk to witnesses, and trace billing records. If they find substantive evidence of fraud, the case escalates.

Proving Criminal Intent

To convict someone of healthcare fraud, prosecutors must prove intent to defraud. This means knowingly deceiving or misrepresenting. Sometimes intent is obvious (like billing for fake patients). Other times, it’s ambiguous. Defendants often claim the billing errors were innocent mistakes.

Warning signs of intent include:

  • A pattern of improper billing rather than isolated incidents.
  • Steps taken to conceal the conduct.
  • Ignoring warnings or failing audits.
  • A past history of fraud allegations.

These types of red flags help establish the billing issues were no accident. The defendant knew their actions were wrong yet persisted anyway.

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Parallel Civil and Criminal Cases

Healthcare fraud cases often have dual criminal and civil components. For example:

  • Federal prosecutors pursue criminal Medicare/Medicaid fraud charges.
  • Meanwhile, the Department of Justice files a civil False Claims Act lawsuit.

The civil case seeks financial damages and penalties. The criminal case seeks fines and jail time. Defendants have to fight the battle on two fronts.

Common Defenses in Fraud Cases

Some defenses I commonly see in healthcare fraud cases include:

  • Lack of intent – Claiming any rule violations were accidental or negligent rather than intentional.
  • Improper coding – Blaming billing errors on confusion over complex coding and documentation rules.
  • Reliance on staff – Contending they delegated coding/billing duties and were unaware of any improprieties.
  • Medical necessity – Asserting their medical judgment justified the treatment in question.

Poking holes in these defenses is a big part of proving fraud. Prosecutors dig for evidence showing the violations were no mistake.

Seeking Dismissal of Fraud Charges

As a defense attorney, my job is to protect my clients’ rights and seek dismissal of unjust charges. I carefully examine the evidence and look for weaknesses in the government’s case. For instance:

  • Lack of proof of intent to defraud.
  • Errors or omissions in the government’s audit methodology.
  • Exculpatory evidence not presented to the grand jury.
  • Procedural issues like statute of limitations or immunity agreements.

I’ve had charges dismissed pre-trial by persuading prosecutors they overreached. Thorough pre-trial investigation is key.

Negotiating Settlements in Fraud Cases

If charges cannot be dismissed pre-trial, my goal is negotiating an acceptable settlement. The government is often open to resolving cases without trial if it avoids litigation costs. Settlement options can include:

  • Repayment plans – Agreeing to repay overpayments over an extended time period.
  • Corporate integrity agreements – Implementing tighter compliance programs and outside monitoring.
  • Lesser charges – Pleading to reduced charges in exchange for cooperation.
  • Pre-trial diversion – Charges dismissed following a probationary period.

Avoiding the uncertainty of trial through settlement is often in my clients’ best interests. But I only recommend settlement if the terms are reasonable.

Bottom Line

Healthcare fraud allegations must be taken seriously. But not all billing errors amount to fraud. We carefully examine the evidence to build the strongest defense. For providers under investigation, experienced legal counsel is essential. I aim to resolve these cases fairly and efficiently. If you face Medicaid/Medicare fraud accusations in Central Florida, I encourage you to contact me for a free consultation. I’ll fight to protect your rights and your reputation.