Healthcare Fraud - 18 U.S.C. § 1347 Sentencing Guidelines.

Thanks for visiting Federal Lawyers, a second-generation firm managed by our lead attorney with over 40 years of combined experience defending healthcare professionals and business owners against federal fraud charges. Section 1347 criminalizes schemes to defraud healthcare benefit programs or to obtain money or property from those programs by false pretenses. Maximum sentence: 10 years imprisonment, or 20 years if violations result in serious bodily injury, or life imprisonment if violations result in death. The statute targets Medicare and Medicaid fraud but extends to any healthcare benefit program whether government or private.

Healthcare fraud prosecutions have exploded over the past two decades. The federal government loses tens of billions annually to fraudulent Medicare and Medicaid claims. Prosecutors view healthcare fraud as epidemic requiring aggressive enforcement. That enforcement targets everyone from executives running sophisticated billing schemes to individual providers who make occasional coding errors. The line between fraud and billing mistakes often gets drawn after the fact based on whether government auditors find patterns they deem suspicious.

What Qualifies as Healthcare Fraud

Knowingly executing or attempting to execute a scheme to defraud healthcare benefit programs or to obtain money from such programs through false statements or pretenses. The elements are similar to wire and mail fraud: a scheme to defraud, intent to defraud, and materiality of false statements.

Common healthcare fraud schemes include: billing for services never provided, upcoding procedures to receive higher reimbursement, unbundling services that should be billed together, performing medically unnecessary procedures solely to generate billings, kickback arrangements where providers pay for patient referrals, marketing off-label uses of drugs while billing as on-label.

But determining what's fraud versus aggressive billing or genuine coding errors requires expertise most prosecutors lack. Medical coding is enormously complex. Thousands of billing codes exist, many with subtle distinctions. Providers routinely make mistakes selecting codes without intending fraud. When do those mistakes become criminal?

The Intent Requirement Prosecutors Ignore

Section 1347 requires knowing execution of fraudulent schemes. Negligent coding errors, misunderstandings about billing requirements, and disputes about medical necessity shouldn't constitute criminal fraud. Yet prosecutors often charge healthcare fraud based solely on billing patterns showing higher-level codes than government auditors believe were justified.

A physician bills level 5 evaluation codes more frequently than peers in the same specialty. Government auditors review medical records and conclude level 3 codes were appropriate for many visits. They calculate "overpayment" based on the difference between what was billed and what they believe should have been billed. Prosecutors charge fraud, arguing the pattern proves intent to defraud.

Defense must show the physician genuinely believed level 5 codes were appropriate based on time spent, complexity of patients' conditions, and medical judgment. Coding level disagreements shouldn't become criminal prosecutions absent evidence of intentional overbilling rather than medical judgment differences.

Sentencing Based on Fraudulent Billings