As the United States moves toward a healthcare system that is profit seeking and funded by private insurance companies, it is natural for clinics, hospitals, and doctors to want to make a profit too. In their zeal to make a profit healthcare providers may step outside the bounds of honesty and commit fraud, even against public programs like Medicare and Medicaid.

Healthcare fraud occurs when a healthcare provider tries to defraud the insurance company in order to receive more profit than they actually provided services for. Healthcare fraud can also be done by the patient if the patient provides false and misleading information to the health insurance company to receive health care benefits.

These fraudulent activities by health care providers is a federal criminal offense and can result in various criminal and/or civil consequences.

Is Healthcare Fraud a Criminal Offense?

Healthcare fraud is a federal criminal offense addressed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) with stiff penalties. Violators of this prohibition against healthcare fraud can end up in federal prison for white-collar offenses. If found guilty of healthcare fraud, penalties may include: 

  • Civil fines of up to $10,000 per false claim;
  • Repayment of false charges;
  • Criminal charges;
  • Criminal fines;
  • Prison;
  • Repayment of attorney fees to plaintiff;
  • Punitive damages;
  • Asset Forfeiture and Seizure;
  • Loss of State Medical License;
  • Probation;
  • Restitution; and/or
  • Denial of Insurance Billing Privileges.

What are Some Common Types of Healthcare Fraud?

Healthcare fraud can be committed both by the patient and the provider. Healthcare fraud may sometimes involve illegal conduct such as:

  • Filing Duplicate Claims: An applicant may file a duplicate claim, or a claim that is only slightly different, in order to reap dual benefits. They may then turn around and sell the additional medicine and equipment they receive in the black market.
  • “Kickback” Schemes: This is where the applicant is illegally rewarded for using or endorsing a particular type of medical treatment, drug, equipment, or service, or for providing illegal referrals.
  • Fraudulent Medical Billing Scams: For instance, overcharging or filing for excess services.
  • Providing False Information: Making false statements on a healthcare application or claim is generally considered a violation and can lead to both private and criminal consequences.
  • Illegal Resale: Selling medicines or equipment’s through a black medical market is very risky and can lead to legal consequences, as well as injuries to innocent persons.
  • Billing for Services Not Actually Performed: When a medical provider bills for medical procedures not performed on patient.
  • Upcoding: Billing for more costly services than the one actually performed.
  • Prescription Drug Fraud: Prescribing medication without an in-person exam.

Due to these types of healthcare fraud, the healthcare industry is highly regulated and is subject to some very strict laws. Violating healthcare fraud laws can have far-reaching consequences for individuals and businesses.

What are the Defenses to Healthcare Fraud Charges?

Healthcare fraud charges are sometimes associated with certain defenses. These include:

  • No Knowledge: Healthcare fraud generally must be intentional, and the defendant must have intended to deceive the other party in order to be found guilty.
  • Coercion: It can sometimes be a defense if the person was coerced (forced) to engage in fraud, for instance under threat of physical harm.
  • Unclean Hands: Recovery may be barred if the party seeking a remedy has engaged in the same conduct, such as if the plaintiff also engaged in fraud. This is often a remedy in cases where the party is seeking equitable relief.
  • No Intent: The medical provider or patient did not have intent to defraud the plaintiff or other party.

How Can Health Care Fraud Be Avoided?

Health care fraud can be prevented or avoided by the patient by doing the following:

  1. Protect your Healthcare ID: Protect your health insurance card and make sure that no one takes your identity or healthcare insurance card. These insurance cards can be used over the Internet to buy online prescription drugs or seek medical services without your consent.
  2. Report Fraud: If you suspect that your medical provider is defrauding your health insurance or billing you excessive charges or procedures that you never did, contact your health insurance company.
  3. Be Informed: Be informed of all the medical procedures that you receive from the medical provider and make sure you consented in writing to have the procedure done.
  4. Read your Policy and Benefits Statement: Read your policy statement from your insurance company and make sure which treatments your insurance covers and if the charges made by the medical provider is accurate.

Do I Need a Lawyer?

Healthcare fraud schemes can be very complex and may not be readily apparent.  If you think that you have been the victim of healthcare fraud, an experienced personal injury attorney can help you figure out how to best pursue a remedy for the harm you suffered. 

Alternatively, if you believe that you have been wrongly accused of committing healthcare fraud, an experienced criminal defense lawyer can represent you in court and help you to defend yourself against false accusations.