A Guide for Physicians, Medical Business Owners, and Other Health Care Professionals
It can happen when Cigna, Blue Cross, Aetna, or some other health insurance provider declines to pay for one of your services.
It can happen when your office sends a bill to Medicare and they send notice of an audit back.
It can happen when a disgruntled former employee (or angry ex-patient) realizes they can make big bucks by filing a qui tam lawsuit against you.
It can even happen because of an anonymous tip.
We’re talking about a federal criminal charge against a doctor, nurse, pharmacist, medical executive, or virtually anyone else working in (or in proximity to) the health care industry.
These charges build up quickly, they often come in situations you never imagined could have federal felony implications (starting with something so small as a routine billing dispute or denial of coverage), and they can utterly ruin your reputation and career even put you in prison with drug dealers and conmen, your hard-earned M.D. be damned.
It happens more often than you might think…and it’s happening more now than ever before.
In a series of articles, we’re looking at some of the most common health care fraud charges in the United States and how to avoid them. Today, we start with a biggie: the federal health care fraud statute, found in Title 18, Section 1347 of the United States Code (18 USC 1347).
What Is 18 USC 1347 and How Does It Work?
Health care fraud is a big problem in this country. It costs the government a lot of money, which during campaign season, gets framed as costing taxpayers and becomes a hot-button issue accordingly. This leads to political fervor for crackdowns, which have ramped up steadily since 1993 (and especially in the last five to ten years).
Federal agents have a bevy of statutes and regulations available to them. In most cases, these are used to initiate civil enforcement proceedings. But more and more often, we’re seeing civil investigations referred to law enforcement offices for criminal prosecution too. There’s more than one way to be prosecuted for health care fraud. Option #1 for prosecutors comes from 18 USC 1347, which reads in part:
(A) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice?
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program,
in connection with the delivery of or payment for health care benefits, items, or services…
(B) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.
To break 18 USC 1347 down in simpler, pertinent terms: Part A tells us about the mental state required for conviction (the defendant must have committed fraud on purpose).
Within Part A, Subsections 1 and 2 tell us which kinds of conduct qualify as fraud under this statute. It’s a broad description any false representation to any health care program will do. So 18 USC 1347 can be used to prosecute patients and providers alike, and it can apply in cases involving federal programs like Medicare or in commercial insurance disputes.
Part B merely tells us the defendant need not intend to violate this specific section of the US Code to be convicted. But that doesn’t change the fact that 18 USC 1347 is an intent crime. You can only be convicted under the federal health care fraud statute if the government can prove you knowingly and willfully committed fraud. (In other words, if you knew you were making false representations to defraud the government, but you didn’t know about 18 USC 1347 in particular, you could still be convicted under this statute.)
Penalties for Conviction Under 18 USC 1347
The penalties are hefty, and we find them in the remaining provision of Part A:
… shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.
In other words, if you’re convicted, you’re looking at:
- A fine, or
- 10 years in prison, or
If the serious bodily injury is involved (e.g., a surgeon who performs an unnecessary procedure on a patient just to collect the money for it), 10 years becomes 20. And if somebody dies, you could be looking at life in prison.
How to Keep 18 USC 1347 from Happening to You: Prevention and Defenses
The single most important thing health care providers can take away from this is that all health care audits, billing disputes, and investigations are serious matters. It’s dangerous to think of them as “small matters” or “routine,” because that’s exactly how so many federal trials begin. Even if you didn’t intend to defraud, investigators can’t read your mind and they have an incentive to assume criminal intent.
If you’re already facing charges or a civil proceeding that might become a criminal case you should contact an experienced federal criminal defense attorney as early in the process as possible.
There are many defenses available, most notably the intent defense as discussed above, but you should take urgent action to start protecting your legal interests right away.
Facing Federal Health Care Fraud Charges? Call Oberheiden, P.C. to Talk About Your Options
Oberheiden, P.C. is pleased to offer free and confidential consultations.
Our federal criminal defense attorneys are here to talk about your legal situation, including your options for protecting your freedom and future. Please contact us online or call 866-603-4540 today.
Compliance Litigation – Defense
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.