What is Healthcare Fraud?

The Health Insurance Portability and Accountability Act (HIPAA), which was signed into law by President Bill Clinton in August 1996, established the Health Care Fraud and Abuse Program which was formed to combat misconduct in both the public and private sectors.  Since its enactment, the law has brought together federal, state and local law enforcement to investigate and combat health care fraud.  Following the initial passage of HIPAA in 1996, the federal government has become much more vigilant and aggressive when it comes to pursuing health care fraud (defined as conduct or schemes designed to cheat private or government health insurance programs) prosecutions.      

Healthcare fraud in the eyes of the government is no different than most other types of fraud.  At its core, it involves allegations of deceit and manipulation.  However, the difference in these types of cases is that prosecutions will often be more document intensive and proving intent will often turn on intricacies involving provision of healthcare services.  Given the significance of what is at risk for a physician or other licensed professional, the stakes are always high in these types of cases.

These are some of the most common schemes prosecuted by the government in healthcare fraud cases:

  • Government Health Insurance Fraud:  Medicare and Medicaid are both government administered health insurance programs.  Medicare provides health insurance for age eligible individuals while Medicare provides health insurance coverage for income eligible individuals. Allegations of fraud involving these programs generally take the form of claims that medical equipment manufacturers push their products on individuals who either do not need the products or never receive them.  Also, physicians are often accused of fraudulently billing these government programs by exaggerating services rendered (“upcoding”) or for services that were never actually rendered at all.  
  • Prescription Drug Fraud:  These types of schemes involve physicians overprescribing pain medications (“pill mills”) or, in more brazen cases, simply selling drugs on the open market for profit. 
  • Medical Equipment Fraud:  In these types of schemes, “free” products are offered to individuals.  The insurers are then billed for products that were not needed or never delivered.         
  • Rolling Lab Schemes:  Unnecessary and sometimes outright fake tests are given to individuals and then those tests are billed to insurers.    

How Is Healthcare Fraud Prosecuted?

As mentioned above, healthcare fraud is generally considered conduct or a scheme that is designed to cheat a government or private health insurance program.  There are a number of federal laws that target healthcare fraud which the government relies upon with regularity to pursue criminal charges. 

The main law which the government relies upon to pursue healthcare fraud charges is codified at 18 U.S.C. § 1347 and is plainly entitled “Health care fraud.”  Under this federal statute, a person that makes a false statement or a promise to defraud a health care program and who does so “knowingly or willfully” shall be guilty of a federal felony and can be punished by imprisonment of up to 10 years.  This is the most commonly used statute by federal prosecutors in pursuing healthcare fraud charges. 

When there are two or more defendants involved in a healthcare violation, the government can, and usually does, bring conspiracy charges under 18 U.S.C. § 1349. A conspiracy does not need to be successful nor does the goal of the conspiracy need to have been accomplished in order for the government to obtain a conviction.  The essence of a conspiracy charge is the agreement itself.  Thus, all the government needs to do to win a conspiracy charge is to prove there was an agreement to violate a healthcare fraud law.  A conviction under this statute can lead to a sentence of up to 10 years in prison. 

The government can also prosecute healthcare fraud under traditional mail and wire fraud statutes which are found at 18 U.S.C. § 1341 and 1343.  When a person uses the mails or some electronic means to further a fraud, including healthcare fraud, then the government can prosecute under these traditional statutes.  Each of these statutes carries penalties of up t0 20 years in prison which is far greater than the penalties under the specific healthcare fraud statute at 18 U.S.C. § 1347. 

Another commonly utilized federal statute is 18 U.S.C. § 287.  Under this law, a person can be prosecuted and imprisoned up to 5 years for making a false claim (e.g. invoice) for services to a government agency.  This statute is very commonly used in fraudulent billing cases where invoices are submitted for medical services never rendered or where the services rendered are exaggerated. 

Finally, under 42 U.S.C. § 1320a-7b, also known as the Anti-Kickback Law, it is illegal for a person to pay or receive a “kickback” (e.g. bribe, payoff, gratuity or other benefit) in relation to medical services or equipment paid for by a government sponsored health care program.  Stated another way, the law makes it illegal to knowingly and willfully offer, pay, solicit, or receive anything of value directly or indirectly to reward patient referrals for any item or service reimbursable by the federal health care program. The criminal penalties for violating this law include fines, imprisonment (up to 5 years), and exclusion from being able to further participate in the federal health care system. 

The Importance Of Having The Right Lawyers

The government has many tools in its arsenal to fight healthcare fraud.  Some of the statutes are written broadly enough to ensnare the unwary who might not even realize they’re committing a federal crime.  For this reason, having an attorney that is knowledgeable about federal healthcare fraud laws is extremely important. 

This is one area of federal criminal law where having the right attorney with the right knowledge is crucial.  Additionally, engaging an attorney at the commencement of an investigation before charges are even filed can yield significant benefits, including talking prosecutors out of bringing charges or re-examining the charges that are contemplated. 

If you’re a health care provider accused of health care fraud, you have a lot to lose.  Having a legal team in your corner comprised of former federal prosecutors and investigators can give you the advantage you need when dealing with the federal authorities.  You need an experienced federal defense lawyer who has the resources to help you navigate the federal system and prepare a proper legal defense.

If you’re a physician, having the right team representing you is even more important because a conviction can affect your ability to continue to practice medicine. The attorneys at The Federal Defenders are experienced in federal litigation, have the knowledge and skills to give you five star representation. 


The law is very nuanced. Federal prosecutors have almost unlimited advantages and resources at their disposal. Having attorneys on your team that understand the law, keep abreast of legal developments in the law, have the experience dealing with the complexities of federal statutes and, finally, possess the skills to stand before a jury to make a compelling case on behalf of a client are not just important qualities, they’re critical. At The Federal Defenders. we pride ourselves on being advocates for our clients. With decades of experience with all variety and manner of federal criminal issues and defenses, we understand what it takes to put our clients in a winning position. For a free and confidential consultation, call us today at (800) 712-0000. Just like our toll-free number, we operate nationwide.