Medicaid is unique in many ways. From a legal perspective, one of the most notable differences about Medicaid when compared to Medicare, Tricare, and other health care benefit programs is that providers will often face prosecution at both the state and federal levels when suspected of engaging in practices that constitute Medicaid fraud.
Unlike Medicare and Tricare, which are administered by the Centers for Medicare and Medicaid Services (CMS) and the Department of Defense (DOD), Medicaid is administered by state agencies that receive federal funding. As a result, both state and federal authorities have a vested interest in combating Medicaid fraud and abuse, and providers convicted of fraud can face penalties under both state and federal law.
Many Medicaid fraud prosecutions start at the state level. Medicaid Fraud Control Units (MFCUs) are state authorities that have a mandate to investigate health care providers suspected of Medicaid fraud, and these MFCUs often vigorously pursue charges once evidence of fraud has been uncovered. However, federal authorities can prosecute Medicaid fraud cases as well. Therefore, it is possible for providers to face both state and federal charges for:
- health care fraud,
- false claims,
- conspiracy,
- mail and wire fraud,
- prescription drug offenses, and
- a wide range of other offenses that carry the potential for life-changing (and business-ending) civil and criminal penalties.
State Penalties for Medicaid Fraud
At the state level, the penalties for Medicaid fraud vary from one jurisdiction to the next. Most states have enacted laws that are substantially analogous to the federal False Claims Act, though the specific language and penalties are not uniform across state lines. Different states also classify different levels of Medicaid fraud typically classified by the amount of billings at issue as misdemeanors or felonies. Likewise, misdemeanor and felony sentencing guidelines also vary from one state to the next.
That said, it is fair to say that the state penalties for Medicaid fraud are severe. For example, in Texas and Louisiana two of the states with the most aggressive and highly-active MFCUs the penalties for Medicaid fraud can include the following.
Medicaid Fraud Penalties in Texas
- Tens or hundreds of thousands of dollars in fines plus five years of imprisonment for each felony count of Medicaid fraud
- Tens or hundreds of thousands of dollars in fines for each misdemeanor count of Medicaid fraud.
- Civil monetary penalties
- Exclusion from Medicaid program eligibility
Medicaid Fraud Penalties in Louisiana
- Tens or hundreds of thousands of dollars in fines plus five years of imprisonment for criminal Medicaid fraud
- Civil penalties of $2,000 per false claim for civil Medicaid fraud
- Exclusion from Medicaid program eligibility
Federal Penalties for Medicaid Fraud
At the federal level, one of the government’s most-potent tools for combating Medicaid fraud is the False Claims Act. This Act provides for both civil and criminal penalties. Its extraordinarily-broad scope means that even providers who unknowingly commit administrative mistakes that amount to technical violations of the law can face severe penalties. Medicaid fraud can implicate federal statutes such as the Anti-Kickback Statute and Stark Law as well and each of these laws imposes additional penalties for Medicaid fraud-related offenses.
Potential penalties under the False Claims Act include:
- Treble (triple) damages for fraudulent billings
- Recoupments
- Fines of roughly $21,500 per false claim
- Pre-payment review and non-payment of future claims
- Exclusion from Medicaid program eligibility
- Up to five years of federal incarceration and hundreds of thousands of dollars in fines for criminal violations
Potential penalties under the Anti-Kickback Statute include:
- Treble (triple) damages for illegal kickbacks
- Fines of nearly $75,000 per violation
- Up to five years of federal imprisonment
- Exclusion from Medicaid program eligibility
Potential penalties under the Stark Law include:
- Treble (triple) damages for illegal billings
- Refunding overpayments to Medicaid
- Fines of $15,000 per violation
- Additional penalties of $100,000 for illegal “circumvention schemes”
In addition to these and other health care-specific statutes, providers accused of Medicaid fraud can face criminal charges under a variety of other statutes as well. Charges for crimes such as conspiracy, mail fraud, wire fraud, bank fraud, drug diversion, and money laundering are all common, and each carries the potential for substantial fines and years behind bars.
Learn more about potential penalties for Medicaid fraud under federal law.
Meet Our Health Care Fraud Defense Lawyers
If you or your business is under investigation for Medicaid fraud, it is important that you seek experienced legal representation as soon as possible. At The Criminal Defense Firm, we are a team of experienced defense attorneys and former federal prosecutors who are dedicated to helping health care providers across the nation to protect their finances, their freedom, and their reputations.
Schedule a Free Case Evaluation With The Trusted Medicaid Fraud Defense Team At The Criminal Defense Firm
Are you under investigation for Medicaid fraud? If so, we urge you to contact us promptly so that we can intervene in the investigation and help you avoid the severe penalties imposed under state and federal law. To get started with a free case evaluation, call (888) 452-2503 or inquire online now.
Brian Kuester offers his extensive experience to counsel companies and individuals under civil or criminal government investigation. When resolution requires litigation, clients choose Mr. Kuester’s proven court and litigation experience.