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What Makes Health Care Fraud a Federal Crime?

November 2, 2021 Federal Criminal Attorneys
What Makes Health Care Fraud a Federal Crime?
Healthcare fraud is a type of white collar crime. The federal government takes this type of crime seriously, and it prosecutes convictions to the fullest extent of the law. Although some people argue that healthcare fraud is a victimless crime, it impacts individuals as well as society. The Federal Bureau of Investigation is the federal agency tasked with investigating healthcare fraud. An individual or business may be investigated for healthcare fraud. United States Code Title 18, Chapter 63 line 1347 stipulates that healthcare fraud is a federal crime, even if no activity crosses state borders.

Definition of Healthcare Fraud

According to Cornell Law School, anyone who knowingly, willfully or attempts to execute a scheme to defraud any healthcare program or falsely represents themselves in order to gain access to the benefits of a healthcare program is committing healthcare fraud. The fraud may include money, the delivery of services or the delivery of healthcare products. It may also involve healthcare payments.

Intent to Defraud

When investigating healthcare fraud, the FBI focuses on the perpetrator’s intent. A single or occasional accidental omission or error should not lead to a conviction of healthcare fraud. For example, a large health system may have hundreds of billing errors every year out of tens of thousands of processed transactions. A pattern of willful or purposeful submissions or applications for healthcare payments, products or services could result in a conviction.

Common Types of Healthcare Fraud

The FBI notes that the most common types of healthcare fraud committed by medical providers include double billing, phantom billing, unbundled billing and upcoding. Unbundled billing involves billing for the same healthcare service several times. Individuals may commit healthcare fraud through identity theft, impersonating a healthcare professional or convincing other people to provide their healthcare benefits information to bill for services that were never provided or to enroll them in a fake health insurance plan.

Prescription Fraud

Prescription fraud is one of the fastest-growing forms of healthcare fraud. It may involve forgery of prescriptions, the diversion of legally prescribed drugs for illegal purposes or doctor shopping. The FBI states that doctor shopping also includes doctors and clinics that engage in unethical and sometimes illegal prescribing practices. According to the Department of Justice, the opioid epidemic has led to convictions for illegal opioid distribution schemes across the United States.

Receipt of Unlawful Payments

One type of healthcare fraud that frequently results in conviction is the receipt of unlawful payments. For example, a physician, clinic or hospital may submit fraudulent bills to a health insurance company, Medicare or Medicaid. When they receive the payment for those fraudulent charges, they could face federal criminal charges. This practice may occur in a few ways. One example is billing for a more complicated or longer procedure than what was actually provided to the patient. Another method of receiving fraudulent healthcare payments involves billing for visits that never took place. A clinic or hospital might bill for products that were never used on or given to the patient.

Misrepresentation to Obtain Money

In order for a healthcare provider to receive payment for services, they must be licensed and approved to deliver that type of service. For example, in Ohio, a nurse practitioner may write a prescription for antidepressant medication, but a registered nurse may not. False representation of qualifications in order to obtain payment for services is a type of healthcare fraud.

False Representation to Receive Healthcare

Individuals, including healthcare patients, may also use false representation as a means of committing healthcare fraud. Many healthcare benefits programs are income-based. A person may under-report their income in order to qualify for low-cost or free healthcare services. As soon as they sign the paperwork and receive a service, they have committed healthcare fraud.

Requirements for Healthcare Fraud Conviction

A person who knows they’re falsely representing themselves in order to receive payments or healthcare benefits can be convicted of healthcare fraud. An individual or business doesn’t have to know that fraudulent activity is illegal under the United States code. The court focuses on the intent of the person’s actions as well as the dollar amount of the fraud and patterns of activity.

Sentencing for a Healthcare Fraud Conviction

The sentencing guidelines for a healthcare fraud conviction vary based on the amount of the fraud, whether an individual or a business committed the fraud and whether or not the fraud caused the serious bodily injury or death of an individual. Individuals and businesses may face fines and a prison term of up to 10 years for healthcare fraud. If the fraud caused serious bodily injury to a person, the prison term may be up to 20 years. If healthcare fraud results in the death of a person, the responsible individuals may face 20 years to a life sentence in prison.

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