Federal Healthcare Fraud Charges Under 18 USC 1347: When Billing Becomes Criminal

Federal Healthcare Fraud Charges Under 18 USC 1347: When Billing Becomes Criminal

So your probably facing federal healthcare fraud charges and your ABSOLUTELY TERRIFIED because you thought billing issues were civil matters. Maybe there’s allegations you submitted false claims to Medicare. Maybe prosecutors claim you received kickbacks for patient referrals. Or maybe your just accused of “upcoding” or billing for services that weren’t medically necessary. Look, we get it. Your COMPLETELY OVERWHELMED by these charges. And you should be! Because healthcare fraud under 18 USC 1347 carries 10 YEARS in federal prison (or life if someone dies) and prosecutors treat healthcare fraud as top priority generating billions in settlements annually!

What Is Federal Healthcare Fraud Under 18 USC 1347?

Let me explain the prosecutorial weapon destroying medical practices. Section 1347 enacted in 1996 and criminalizes knowingly executing scheme to defraud healthcare benefit program or obtain money by false pretenses! Applies to Medicare, Medicaid, TRICARE, and ALL federal healthcare programs!

The statute requires TWO elements: (1) knowingly executed or attempted to execute scheme to defraud healthcare benefit program, (2) with intent to defraud! Prosecutors don’t need to prove actual loss to government – attempted fraud is same crime! Claim denied but you submitted it? Still 10 years!

Here’s what’s really scary – EACH false claim is separate count! Submitted 100 Medicare claims prosecutors say were fraudulent? That’s 100 healthcare fraud counts! Each carrying 10 years! We’ve seen indictments with 500+ counts from routine medical billing!

Penalties ESCALATE if harm results! Serious bodily injury increases maximum to 20 years! Death increases to life imprisonment! Prescribed unnecessary opioids and patient overdosed? LIFE! Performed medically unnecessary surgery with complications? 20 years!

What Are the Key Healthcare Fraud Laws?

Multiple overlapping statutes create minefield for healthcare providers!

Section 1347 is primary healthcare fraud statute! But prosecutors also charge False Claims Act, Anti-Kickback Statute, and Stark Law violations! Five major federal fraud and abuse laws apply to physicians and healthcare providers!

False Claims Act (31 USC 3729-3733) is civil statute with criminal penalties! Filing false claims may result in fines up to three times government’s loss PLUS $11,000 per claim! One claim with minor error? $11,000 penalty! 1,000 claims? $11 MILLION!

Anti-Kickback Statute (42 USC 1320a-7b) prohibits paying or receiving remuneration for patient referrals! Criminal penalties include 10 years prison and $100,000 fine! PLUS civil penalties of $50,000 per violation plus 3X remuneration amount!

Stark Law (42 USC 1395nn) prohibits physician self-referrals for designated health services! Civil statute only – no criminal penalties! But violations can be $15,000 per service plus exclusion from Medicare! Stark Law is strict liability – don’t need intent to violate!

Prosecutors charge ALL statutes for same conduct! One kickback arrangement? Healthcare fraud (1347), Anti-Kickback Statute, False Claims Act, wire fraud, mail fraud! Five federal felonies for one arrangement!

What Are Common Healthcare Fraud Types?

Prosecutions follow predictable patterns!

Upcoding is MOST common charge! Billing for higher-level service than actually provided – using 99215 code when visit was 99213! Using more expensive diagnosis codes to increase reimbursement! Each upcoded claim is separate fraud count!

Unbundling violations everywhere! Billing separately for services that should be bundled! Submitting multiple codes instead of one comprehensive code to increase payment! Lab tests, surgical procedures, diagnostic services – all have bundling requirements!

Phantom billing is easiest to prove! Billing for services never rendered – patient never showed up but provider bills anyway! Billing for dead patients! Billing after provider left practice! Prosecutors love these cases because fraud is obvious!

Medically unnecessary services prosecutions EXPLODING! Ordering tests, procedures, prescriptions that aren’t medically indicated! Medicare only pays for services that are reasonable and necessary! Prosecutors claim routine tests were unnecessary! Second opinions dispute medical judgment!

Kickback schemes destroy practices! Paying for patient referrals, receiving payments from labs or suppliers, equipment lease kickbacks! Even indirect remuneration can violate Anti-Kickback Statute! We’ve seen prosecutions for free meals to referring doctors!

What Is the Anti-Kickback Statute?

AKS creates criminal liability for routine business arrangements!

Prohibits knowingly and willfully paying or receiving remuneration to induce referrals of items or services payable by federal healthcare programs! “Remuneration” means ANYTHING of value – cash, gifts, discounts, free services, favorable lease terms!

One purpose test makes prosecution easy! If ONE purpose of payment is to induce referrals, violates AKS – even if there are other legitimate purposes! Don’t need to prove referrals were ONLY reason for payment!

Criminal penalties are HARSH! 10 years prison and $100,000 fine! PLUS civil penalties of $50,000 per violation plus 3X remuneration! PLUS mandatory exclusion from Medicare/Medicaid! One kickback arrangement can destroy entire practice through exclusion!

Safe harbors protect certain arrangements! If arrangement fits COMPLETELY within safe harbor, protected from prosecution! Safe harbors include employment relationships, personal services contracts, investment interests, rental agreements! But must satisfy ALL requirements – partial compliance doesn’t help!

Safe harbors are NARROW and technical! Employee safe harbor requires W-2 employment and reasonable compensation! Personal services safe harbor requires written contract, specified services, fair market value compensation! Miss one requirement? Lose protection!

What’s the Difference Between Stark Law and Anti-Kickback Statute?

Both regulate referrals but have DIFFERENT requirements!

Stark Law applies ONLY to physicians referring for designated health services – imaging, lab tests, physical therapy, home health, DME! AKS applies to ANYONE referring ANY Medicare/Medicaid services!

Stark Law is strict liability civil statute! Don’t need to prove intent – if financial relationship exists and physician refers, automatic violation! No criminal penalties but civil penalties are $15,000 per service!

AKS is criminal statute requiring intent! Must prove knowing and willful violation! Higher burden of proof but criminal penalties including prison! Most arrangements violating AKS also violate Stark – get both civil AND criminal exposure!

Stark exceptions vs. AKS safe harbors! Stark has exceptions that if met, no violation! AKS has safe harbors that protect from prosecution! Similar but not identical! Arrangement can satisfy Stark exception but still violate AKS!

Penalties stack! Violate both Stark and AKS? Civil penalties for Stark PLUS criminal prosecution for AKS PLUS False Claims Act penalties! Same referral arrangement creates multiple violations!

What Are 2024 Enforcement Trends?

DOJ making healthcare fraud TOP priority!

2024 False Claims Act settlements exceeded $2.9 BILLION – highest amount in years! Government recovering massive amounts from healthcare fraud! Every case sends message about enforcement priority!

Telemedicine fraud prosecutions EXPLODING after COVID-19! Remote prescribing, unnecessary durable medical equipment, phantom telehealth visits! Government charging providers for exploiting pandemic telemedicine flexibilities!

Opioid-related healthcare fraud cases increasing! Pill mills, medically unnecessary prescriptions, kickbacks from pharmacies! Prescription fraud causing overdose deaths prosecuted as healthcare fraud resulting in death – life imprisonment exposure!

Laboratory billing fraud continues! Genetic testing fraud, unnecessary lab panels, kickbacks to referring physicians! Labs paying doctors for referrals through various disguised arrangements!

Whistleblower (qui tam) cases driving enforcement! Disgruntled employees, billing staff, compliance officers filing False Claims Act lawsuits! Whistleblowers get 15-30% of government recovery – incentive to report!

What Are Defenses to Healthcare Fraud?

Several defenses exist but require immediate healthcare fraud expertise!

Medical necessity is complete defense! If services were medically appropriate and reasonably necessary, not fraud! We prove clinical justification through medical records, expert testimony, treatment standards!

Coding errors vs. fraud! Honest mistakes in billing codes aren’t criminal! Must prove intentional pattern of fraudulent billing! One-off errors? Not fraud! We show errors were random, not systematic!

Lack of intent to defraud! If you believed billing was proper or relied on advice of billing staff, no criminal intent! Negligent billing isn’t criminal! We demonstrate good faith compliance efforts!

Safe harbor compliance for AKS! If arrangement fits within safe harbor, protected from prosecution! We show employment agreements, personal services contracts, fair market value compensation all satisfy safe harbor requirements!

Stark Law exceptions! If physician referral arrangement satisfies exception, no Stark violation! In-office ancillary services exception protects many arrangements! We prove exception requirements met!

Reliance on counsel! If healthcare attorney advised arrangement was compliant and you relied in good faith, negates willfulness! Must show full disclosure to attorney and reasonable reliance!

Why Healthcare Fraud Defense Requires Specialized Medical Fraud Attorneys

Look, we’re not your typical lawyers who don’t understand medical billing and healthcare regulations. We’re former federal prosecutors who CHARGED healthcare fraud with HHS-OIG and DOJ and know EXACTLY what government must prove – especially medical necessity and intent!

We understand complex safe harbor requirements and Stark exceptions! We know how to prove coding errors were innocent mistakes not fraudulent schemes! We can establish medical necessity through expert witnesses! Most importantly, we prevent billing disputes from becoming criminal prosecutions!

Other lawyers don’t challenge government’s medical necessity determinations! They accept billing audits as proof of fraud! Their ignorance leads to convictions for legitimate medical practice!

Call us RIGHT NOW at 212-300-5196
Healthcare fraud investigations start with billing audits – act NOW!
Former federal prosecutors – Healthcare fraud specialists – Available 24/7!

Don’t cooperate with Medicare audits or HHS-OIG investigations without experienced healthcare fraud counsel! Audits turn into criminal investigations! Statements to auditors become prosecution evidence! Every billing explanation can be twisted as admission! Assert your rights and call us IMMEDIATELY!

Remember – federal healthcare fraud isn’t about intentional criminals, its about prosecutors interpreting billing errors and medical judgment as fraud. One coding mistake, one medically-debatable service, one business arrangement can mean 10 years in federal prison plus exclusion from Medicare. You need someone who understands both medical billing AND criminal defense. Call us NOW before billing issue becomes federal prosecution!