Like any other business involving insurance, healthcare is a common target for fraud. Healthcare fraud may involve individuals making false claims, making multiple claims, or even doctors billing insurance companies for care that was never provided. The penalties for healthcare fraud can include serious jail time and fines.
Under California Penal Code 550, it is unlawful to:
- Knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss or injury, including payment of a loss or injury under a contract of insurance.
- Knowingly present multiple claims for the same loss or injury, including presentation of multiple claims to more than one insurer, with an intent to defraud.
- Knowingly prepare, make, or subscribe any writing, with the intent to present or use it, or to allow it to be presented, in support of any false or fraudulent claim.
- Knowingly make or cause to be made any false or fraudulent claim for payment of a health care benefit.
- Knowingly submit a claim for a health care benefit that was not used by, or on behalf of, the claimant.
- Knowingly present multiple claims for payment of the same health care benefit with an intent to defraud.
- Knowingly present for payment any undercharges for health care benefits on behalf of a specific claimant unless any known overcharges for health care benefits for that claimant are presented for reconciliation at that same time.
Healthcare Fraud in California
There are many forms of healthcare fraud in California. This includes defrauding insurance companies, government healthcare agencies, and identity theft. Examples of healthcare fraud may include:
- Billing for services never performed
- Misclassifying non-covered services as covered services
- Duplicate claims
- Overcharging for services
- Identity theft to charge services to another
- Taking kickbacks for referrals
- Prescribing prescriptions for illegal sale
- Performing unnecessary procedures
- Falsifying a diagnosis
- Unbundling to bill as separate procedures
- Falsely diagnosing injuries for injury or disability claims
Healthcare fraud often involves other criminal offenses, including identity theft, check or credit card fraud, unemployment insurance fraud, disability fraud, insurance fraud, motor vehicle violations, and theft.
In some cases, health care fraud may involve a single individual conducting a single act of fraud. However, health care fraud often involves multiple parties involved in a criminal enterprise to fraudulently obtain millions of dollars.
Healthcare Fraud Penalties
The penalties for healthcare fraud depend on the type of fraud involved, the scope of the fraud, the value of fraud involved, whether anyone was injured in the fraud, and the defendant's criminal history.
If health care fraud involves a small amount of money, valued at $950 or less, it may be charged as a misdemeanor, punishable by up to 6 months in jail and a fine of up to $1,000. However, most healthcare fraud involves larger amounts of money and may be charged as a felony.
As a felony, healthcare fraud includes penalties of 2, 3, or 5 years in prison, and a fine of up to $50,000. However, when the fraud involves more than $50,000, a conviction may result in a fine of double the amount of fraud.
Certain factors may result in a sentencing enhancement, or additional prison time added to their sentence. If health care fraud results in serious bodily injury, the defendant may receive a 2-year sentencing enhancement. A third felony conviction for healthcare fraud may result in an additional 5-year enhancement in prison sentencing.
In addition to prison time and fines, the defendant may be ordered to pay restitution for any medical evaluation or treatment service obtained or provided. It is up to the court to determine the amount of restitution and to whom the restitution will be paid.
Medicare or Medi-Cal Fraud
Medicare and Medicaid are federal healthcare programs for individuals who are 65 or older, are disabled, or have end-stage renal disease. Medi-Cal is California's government health insurance program for low-income, disabled, and elderly individuals. Both of these programs are common targets of healthcare fraud.
Medicare or Medicaid fraud may result in federal criminal charges and civil penalties. Under the False Claims Act, any healthcare provider who presents a false claim to the government for reimbursement may face up to 5 years in prison and up to $250,000 in fines. Additionally, the healthcare provider may face up to $10,000 in civil penalties, plus three times the amount of damages to the government.
Healthcare Fraud by Patients
Individuals may be committing health care fraud by seeking treatment using another individual's name, identifying information, or insurance coverage. This could involve identity theft of another person's insurance information or using a family member's insurance because the individual seeking treatment does not have insurance.
Insurance companies may conduct their own investigations into health care fraud before referring the case to law enforcement. In addition to insurance fraud charges, this type of fraud may also result in identity theft charges in California.
Healthcare Fraud by Doctors
Healthcare fraud often involves claims for the payment of services submitted to health insurance companies or government insurance programs by doctors, dentists, or other healthcare providers. In many cases, a provider may begin with small amounts of fraud then gradually increase the level of fraud.
Under California law, it is illegal for a healthcare provider to submit a claim for any service that was not performed. It may also illegal to perform an unnecessary service or procedure on a patient for reimbursement by the insurance company.
In addition to the criminal and civil penalties for healthcare fraud by doctors or healthcare providers, a doctor may lose their job and lose their license to practice medicine.
Healthcare Fraud Defenses
Many healthcare providers are falsely accused of healthcare fraud for simply providing treatment to their patients. Allegations of healthcare fraud may make the doctor or dentist second guess their professional decisions on how to treat patients because they are concerned about how the insurance company will perceive the bill.
There are a number of possible defenses available to individuals facing health care fraud charges. Fraud crimes generally require an intent to defraud. Without the intent to defraud, the defendant should not be found guilty of committing fraud.
Experienced Criminal Defense Attorney Representation
Lynn Gorelick has more than 30 years of criminal defense experience and understands the penalties involved with healthcare fraud. She understands how to approach the individual facts of each case for the greatest chance of success, keeping her clients out of jail with a clean record. If you are facing a health care fraud investigation anywhere in the East Bay, contact Lynn Gorelick understands you do not have to plead guilty just because you were arrested.