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How Lawyers Challenge Improper Healthcare Fraud Investigations

How Lawyers Challenge Improper Healthcare Fraud Investigations

Healthcare fraud investigations have become increasingly common in recent years, as government agencies crack down on perceived abuses of federal healthcare programs like Medicare and Medicaid. However, not all healthcare fraud investigations are justified, and many healthcare providers feel unfairly targeted by overzealous investigators. In these cases, experienced legal counsel is essential to protect the rights of healthcare providers.

Understanding Healthcare Fraud Investigations

Healthcare fraud investigations are usually initiated by one of several government agencies, including:

  • The FBI
  • The Department of Justice (DOJ)
  • The Department of Health and Human Services (HHS)
  • State Medicaid Fraud Control Units

These agencies have teams of investigators and auditors who review Medicare and Medicaid claims data to identify anomalies that may indicate fraudulent billing practices. Common targets of investigations include hospitals, nursing homes, hospices, home health agencies, clinical laboratories, durable medical equipment suppliers, and physicians’ practices.Investigators use data analytics to identify outliers in billing patterns and unusual spikes in reimbursements. Any findings of potential fraud can trigger audits, document requests, interviews, site visits, and even raids of healthcare facilities.If fraud is substantiated, the consequences can be severe. Healthcare providers may face civil fines and penalties, criminal prosecution, exclusion from federal healthcare programs, and loss of licensure. The stakes are high, so it’s critical for providers to take investigations seriously and protect their rights.

Challenging the Basis for Investigations

Skilled healthcare fraud defense attorneys can challenge the very basis for an investigation. In some cases, the data analytics used to “identify” potential fraud may be flawed. Billing outliers or spikes in reimbursements do not necessarily indicate wrongdoing.Defense lawyers can scrutinize the investigators’ methodology and conclusions. If the data analysis is found to be unreliable or the conclusions are unsupported by facts, the investigation can potentially be halted in its tracks.For example, in one case, a home health agency was accused of overbilling Medicare based on a supposed spike in reimbursements. However, defense attorneys demonstrated that the agency’s patient census had increased significantly due to the opening of a new branch office – a perfectly legitimate reason for higher billing. The prosecution’s case collapsed when the flawed analytics were exposed.

Contesting Audits and Interviews

Investigators typically start by issuing audit requests and conducting interviews of physicians, administrators, coding staff, and other personnel. However, healthcare providers have certain rights in this process.In responding to audits, attorneys can argue that the requests are overly broad or unduly burdensome. They may negotiate to narrow the scope or extend the timeline for responding. Providers should not simply turn over volumes of documents and records without objection.Attorneys also represent clients during interviews with investigators. They ensure that questions stay within reasonable bounds and that interviews do not turn into de facto interrogations. In some cases, they may argue that certain employees should not be interviewed at all if it could compromise their Fifth Amendment rights.For instance, in one case, investigators wanted to interview a healthcare provider’s entire billing department – nearly 50 employees. The defense team maintained that such broad interviews were unwarranted and limited the scope to only a handful of key employees.

Protecting Against Inappropriate Raids

A particularly aggressive tactic sometimes used in healthcare fraud investigations is the “raid” – when agents literally raid a facility to seize documents and interview employees onsite. As one might imagine, these raids can be extremely disruptive to operations.Defense lawyers can fight against raids that are uncalled for or overly broad. In some cases, they have succeeded in prohibiting raids altogether and requiring investigators to use less intrusive means like formal document requests. The threat of an imminent raid can be leverage in negotiating reasonable parameters.In one recent case, attorneys were able to prevent a planned raid of a community mental health center accused of Medicaid fraud. They demonstrated that a raid was unnecessary since the agency was willing to voluntarily cooperate. The tactic worked – no raid occurred, and the investigation proceeded civilly.

Negotiating Favorable Settlements

If defense efforts during the investigative process fall short, experienced attorneys can still help secure favorable settlements and avoid the harshest penalties. Counsel intimately familiar with healthcare law are in the best position to negotiate with prosecutors and regulators.Of course, if the evidence clearly indicates fraudulent activity, then accepting responsibility and cooperating with the investigation might be the wisest approach. But for many providers accused of technical billing violations or unintentional errors, skilled attorneys can argue for leniency and make a strong case against excessive fines.In one recent Medicare fraud case, prosecutors initially sought exclusion of a cardiology group from all federal healthcare programs. However, defense lawyers were able to negotiate a $100,000 settlement and no exclusion – allowing the practice to continue caring for Medicare patients.

Avoiding Criminal Prosecution

Perhaps one of the biggest fears for healthcare providers accused of fraud is the threat of criminal prosecution. The prospect of jail time is terrifying. However, experienced counsel can often prevent matters from ever getting to that point.In cases where fraud suspicions are unfounded or unsupported by evidence, attorneys can put a stop to the criminal investigation before charges are ever filed. Even when wrongdoing may have occurred, skilled negotiation can frequently result in misdemeanor pleas or deferred prosecution in lieu of felony indictments.For instance, in one case involving a physician accused of illegal kickbacks, the defense team convinced prosecutors to offer pretrial diversion rather than pursuing jail time. The doctor agreed to increased compliance oversight in exchange for avoiding any criminal record.

Defending Providers’ Licenses

Healthcare fraud convictions can also threaten professional licensure. However, attorneys routinely defend doctors, nurses, pharmacists, and other licensees against disciplinary actions by state medical boards and other regulators.By demonstrating compliance with all applicable standards of care, attorneys can help licensees avoid probation, suspension, revocation, or other disciplinary measures. In many cases, they can resolve matters through agreements and voluntary corrective action plans without any formal discipline.In one recent case, a physical therapist’s license was threatened due to alleged Medicare fraud. However, counsel was able to prove to the licensing board that the billing errors were unintentional and that the therapist’s documentation met professional requirements. No license restrictions resulted.


  • Government scrutiny of healthcare providers for fraud and abuse has expanded considerably. However, not all investigations are warranted or supported by the facts.
  • Experienced healthcare fraud defense attorneys know how to challenge flawed analytics and conclusions that underpin many investigations.
  • Counsel can fight against unduly broad and burdensome audits and interviews, protecting providers’ rights in the process.
  • Defense lawyers are often able to prevent or limit disruptive raids, arguing for less aggressive investigative tactics.
  • Even when fraud exists, skilled attorneys negotiate to minimize penalties, avoid program exclusion, and prevent criminal prosecution and loss of licensure.
  • With an experienced legal team, healthcare providers can avoid the most severe consequences of fraud investigations – even if some technical violations occurred.

Vigorous representation by knowledgeable counsel makes all the difference in how healthcare fraud investigations play out. Providers should not hesitate to call on experienced attorneys to protect their interests, reputations, and ability to continue caring for patients.

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