Healthcare Fraud FAQs

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Brian Kuester
Attorney Brian Kuester
Healthcare Fraud Defense Team Lead
Former US Attorney
Former District Attorney
Ellen Comley
Attorney Ellen Comley
Defense Team Lead
Senior Counsel
Roger Bach
Roger Bach
Team Consultant
Former Special Agent (OIG)

Q: What is health care fraud?

The term “health care fraud” is used to refer to a broad range of civil and criminal offenses that primarily involve illegally obtaining funds through a government benefit program such as Medicare, Medicaid, or Tricare. From submitting “false and fraudulent claims” for Medicare reimbursement, to relying on falsified physician certifications and accepting unlawful referral fees, there are numerous offenses that the government investigates and prosecutes as forms of health care fraud.

Q: How common is it for providers to face health care fraud investigations?

With the federal government’s laser focus on fighting waste and abuse affecting Medicare, Medicaid, and Tricare, it is becoming increasingly common for providers in all sectors of the health care industry to face fraud investigations. In fact, all health care providers should be prepared to respond to a potential investigation. While the high-profile health investigations commonly involve organized fraud schemes, it is legitimate providers who most often find themselves facing health care fraud investigations.

Q: Can physicians, pharmacists, executives, and company owners face personal liability for health care fraud?

Yes. State and federal law enforcement agencies can pursue civil and criminal cases against health care entities as well as individuals. This includes physicians, pharmacists, executives, other key personnel, and company owners. We have significant experience representing both individual and corporate clients in health care fraud investigations, litigation, and appeals.

Q: What are the statistics on Medicare and Medicaid fraud?

By conservative estimates, Medicare fraud costs taxpayers and the federal government in excess of $60 billion each year. Over the past ten years, the Medicare Fraud Strike Force which is just one of numerous federal authorities that targets Medicare fraud, waste, and abuse has obtained more than 2,300 indictments, initiated nearly 1,800 criminal actions, and recovered more than $2.5 billion in financial recoveries. In 2016, Medicaid Fraud Control Unit (MFCU) investigations resulted in 1,160 fraud convictions and over $1.8 billion in recoveries.

Q: What statutes establish the offenses and penalties for health care fraud?

Health care fraud can be prosecuted under a wide range of state and federal statutes. This includes health care-specific statutes, as well as more general statutes that apply to fraud and other related offenses such as theft and conspiracy. Some of the federal statutes most commonly used to prosecute health care fraud include:

  • Anti-Kickback Statute
  • Civil Monetary Penalties Law
  • False Claims Act
  • Health Care Fraud Statute
  • Stark Law

Q: Which federal agencies investigate and prosecute cases involving allegations of health care fraud?

Several different federal agencies are involved in health care fraud investigations and prosecutions. Similar to the statutes that apply to health care fraud, some of these agencies are focused exclusively on health care, while others are general law enforcement agencies:

  • Centers for Medicare and Medicaid Services (CMS)
  • Department of Health and Human Services (HHS)
  • Department of Defense (DOD)
  • Department of Justice (DOJ)
  • Department of Labor (DOL)
  • Drug Enforcement Administration (DEA)
  • Federal Bureau of Investigation (FBI)
  • Office of Inspector General (OIG)

Q: What is the Medicare Fraud Strike Force?

The Medicare Fraud Strike Force is a joint effort of the OIG, DOJ, FBI, and other state and federal authorities that is exclusively focused on identifying and prosecuting health care providers suspected of Medicare fraud. The Strike Force has been in operation since 2007 and currently has field locations in nine regions around the country.

Q: What are Medicaid Fraud Control Units (MFCUs)?

Medicaid Fraud Control Units are entities that investigate and prosecute Medicaid fraud under the oversight of the OIG. There are 50 MFCUs around the country, and they collectively spend hundreds of millions of dollars each year to pursue investigations and charges against providers suspected of Medicaid fraud.

Q: What is the Opioid Fraud and Abuse Detection Unit?

The Opioid Fraud and Abuse Detection Unit is a new program initiated by the DOJ to specifically target fraud involving prescription opioid medications. The Unit is comprised of federal prosecutors who work with agents at the DEA, FBI, HHS, and local law enforcement to pursue charges against physicians, pharmacists, and other medical providers who prescribe and dispense opioid medications.

Q: How does the federal government identify targets for health care fraud investigations?

Federal authorities rely on two primary resources to identify targets for health care fraud investigations. The first is data analytics. By comparing and contrasting providers’ program billings, federal agencies identify “outliers” and “anomalies” that appear to reflect fraudulent billing practices.

The second is qui tam (or “whistleblower”) litigation. When whistleblowers file claims that appear to be substantiated, the OIG and DOJ can intervene in the litigation in order to pursue civil or criminal penalties.

Q: What do I need to know if my health care business or practice has been named in a qui tam lawsuit?

Whistleblower cases are unique, and they require the execution of a unique defense strategy that is custom-tailored to the circumstances at hand. For more information about what you need to know when facing a qui tam lawsuit, you can read: What You Should Do When Someone Files a Qui Tam Lawsuit Against Your Business.

Q: Can a ZPIC or RAC audit result in a federal health care fraud investigation?

Yes. Among the many potential consequences of a Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) audit is the potential for your case to be referred to the DOJ for federal prosecution. These “audits” can actually be invasive investigations, and providers must be diligent to ensure that the auditors do not reach unjustified conclusions.

Q: What types of health care providers and companies are most likely to face health care fraud investigations?

With the federal government’s data-driven enforcement strategy, all health care providers that bill Medicare, Medicaid, Tricare, and other benefit programs are potential targets for fraud investigations. In recent years, however, federal authorities have undertaken initiatives that specifically focus on:

  • Compound pharmacies
  • Hospices and home health agencies
  • Providers that prescribe and dispense opioid medications

Q: What regions of the country are hotspots for health care fraud enforcement?

In addition to placing additional emphasis on targeting certain types of providers, federal authorities have identified a number of health care fraud “hot spots” around the country where they are focusing their efforts as well. For example, the Medicare Fraud Strike Force’s nine offices are located in:

  • Brooklyn, New York
  • Chicago, Illinois
  • Dallas, Texas
  • Detroit, Michigan
  • Los Angeles, California
  • Miami, Florida
  • Southern Louisiana
  • Southern Texas
  • Tampa, Florida

Q: What should I do if I have received an OIG or grand jury subpoena?

If you or someone in your business or practice has received an OIG or grand jury subpoena, it is critical that you seek legal representation promptly. You need to submit a timely response (either providing responsive information or asserting valid objections to the subpoena), and you also need to be extremely careful to avoid unnecessarily disclosing any potentially-damaging information. Learn more: OIG Subpoena or Grand Jury Subpoena.

Q: What is the process involved in defending against a health care fraud investigation?

With any type of health care fraud investigation, early intervention is critical. You need to find out the nature of the investigation (whether it is civil or criminal), and you need to find out the specific allegations against you. At The Criminal Defense Firm, when we take a new case, we seek to make contact with the prosecutor’s office as quickly as possible so that we can gather the information we need to develop an efficient and custom-tailored defense strategy.

Q: What are some potential defenses against health care fraud allegations?

The defenses that will be available in any particular case depend on the specific statutes and allegations involved. However, broadly speaking, defenses we are commonly able to assert on behalf of our clients include safe harbor protections, statutory exceptions, lack of evidence to prove the alleged offense, and Constitutional violations.

Q: Are their differences between Medicare, Medicaid, and Tricare fraud?

Yes and no. In many cases, different agencies will be involved in investigations involving different benefit programs. For example, the DOD is most-typically involved in Tricare investigations. There are also different billing rules and regulations that apply to each program. On the other hand, federal authorities can rely on many of the same statutes to prosecute Medicare, Medicaid, and Tricare fraud, and providers’ potential exposure is often similar.

Q: When is it time to hire a health care fraud defense lawyer?

Since early intervention and a proactive approach to addressing any known violations are the best ways to avoid civil or criminal enforcement, it is important to hire experienced legal representation as early as possible. It is imperative that you promptly speak with an attorney if you:

(i) are aware of a possible health care law violation in your business or practice,

(ii) have been contacted by federal agents or state law enforcement officers,

(iii) have received a subpoena, or

(iv) have been arrested.

Q: What factors should be considered when choosing an attorney for a health care fraud case?

Health care fraud cases are complex, and they require a difficult to achieve blend of knowledge and skill in federal litigation and health care law compliance. As a result, you need to choose an attorney who has specific and extensive experience in health care fraud defense. Ideally, he or she will have a proven track record of successful representation in federal health care fraud investigations, with the majority of their cases resulting in no civil or criminal charges. For more tips on choosing a health care fraud defense lawyer, we encourage you to read: How to Choose the Best Attorney for Your Case.

Q: What can I expect from my investigation if I hire a skilled attorney?

Each case is unique, and the potential outcomes in your case will depend on the specific facts and laws involved. However, at The Criminal Defense Firm, we approach every case with the singular goal of closing our client’s investigation without the government filing civil or criminal charges. Once again, early intervention is critical; and, the sooner we get involved, the better we are able to fully-execute a defense strategy designed to keep your case from going to trial.

Q: What are the potential penalties if my health care fraud case goes to trial?

If your case goes to trial, the potential penalties will depend upon (i) the statute(s) under which you are being prosecuted, and (ii) whether your case is civil or criminal in nature. For example, in a civil False Claims Act (FCA) case, the penalties can include fines, treble (triple) damages, recoupments, and benefit program exclusion. In a criminal FCA case, providers can face financial penalties, exclusion, and federal imprisonment. Providers can face collateral consequences as well, including loss of licensure.

Q: What if I receive an unfavorable audit determination or lose my health care fraud case at trial?

If you receive an unfavorable audit determination or you are found responsible at trial, you may have grounds to file an appeal. There are five stages of appeal for ZPIC and RAC audits, and federal health care fraud cases can be appealed as high as the U.S. Supreme Court. At The Criminal Defense Firm, we represent clients at all stages of the audit appeals process, and the attorneys in our Appellate Practice have significant experience in federal health care fraud appeals.

Q: What can I do to reduce my risk of facing a health care fraud investigation?

The best way to reduce your chances of facing a health care fraud investigation is to adopt and implement a comprehensive compliance program focused on avoiding any billing violations. This means making sure your employees understand their obligations under the law, as well as the applicable benefit program rules and regulations. You must also continually update your compliance program as the billing requirements change over time.

Q: Where can I learn more about defending against allegations of health care fraud?

Our firm’s website provides a wealth of information for providers facing health care fraud investigations and prosecutions. For more information, we encourage you to read:

Not all attorneys of The Criminal Defense Firm are licensed in California and nothing contained in here is meant to constitute the unauthorized practice of law.

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