Healthcare Fraud: White-Collar Crime and Federal Penalties

What is Healthcare Fraud?

Healthcare fraud is considered a white-collar crime. It consists of filing illegitimate health care claims to make profits. The fraudulent activity can be committed by either a healthcare practitioner or a consumer. Statistics show that healthcare fraud costs the United States government approximately $70 billion every year. The figure accounts for about 3% of the annual healthcare budget. Other statistics approximate the amount lost due to healthcare fraud to about $230 billion every year. This is why the federal government has increased efforts meant to reduce healthcare fraud in the country. Several task forces, teams, and programs have been formed to deal with the abuse of Medicaid and Medicare health programs.

Common Forms of Healthcare Fraud Charges

The following is a list of common forms of healthcare fraud charges:

• Billing Medicaid and Medicare for services never rendered
• Changing of medical records
• Billing for services that are not covered as if they are covered
• Intentionally reporting improper diagnoses to inflate payments from state and federal government programs
• Selling or forging prescription medications
• Receiving kickbacks for patient referrals
• Billing for services that cost more than the intended one
• Waiving deductions or copays
• Practicing without a proper license

Examples of Healthcare Fraud by Consumers

Examples of health frauds done by consumers include:

• Altering of bills or receipts
• Filing of claims for medications never received
• Use of another person's coverage or their insurance card

Federal Laws Governing Healthcare Fraud

Below are popular federal laws meant to curb healthcare fraud:

• Anti-Kickback Statute – This law prohibits individuals or companies from soliciting for or receiving money in exchange for getting patient referrals.
• False Claims Act – The act is meant to deter the public from submitting a fraudulent or false claim to the federal government.
• Physician Self-Referral Act (also referred to as Stark Law) – This act involves the practice of referring patients to acquire services in facilities or hospitals where the doctor has a financial interest.
• Exclusion Statute – This law calls for the banning of medical practitioners from practice if they are proved to have committed a criminal offense.
• Civil Monetary Penalty Law – The Department of Health can pursue monetary penalties as well as exclusions for different behaviors that concern cases of defrauding the United States government money.

The statutes above are the ones that sum up the federal Medicare fraud and abuse laws. The United States Department of Health and Human Services, the Office of the Inspectors General, and the US Department of Justice are the ones responsible for enacting the above laws.

Penalties and Punishment for Healthcare Fraud

If you are accused of a healthcare fraud crime, your lawyer will definitely give you a rough idea of what to expect as a sentence. Health fraud crimes are often informed by the dollar value of the illegitimate claims involved in the case. Generally speaking, healthcare fraud can get an accused person a maximum prison term of 5 years. This can still be extended up to 20 years in case a minor is involved or where there is serious bodily injury.

Specific Statute Penalties

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If a person is convicted of the False Claims Act, then they might get up to five years in prison together with a fine of $250,000. Those who are found guilty under the Anti-Kickback Statute may receive a prison sentence of five years and a fine of $25,000.

Professional License and Medicare Exclusion

Other than the jail term and fines, health practitioners who are found guilty of healthcare fraud crimes are also banned from working with all future federal healthcare programs. An exclusion will prohibit individuals and companies from working with Medicare. This will have far-reaching effects for the accused person considering the fact that they won't even be able to attend to patients who benefit from federal healthcare programs. Penalties can even get harsher if a person fails to comply with the exclusion terms. A fine of $10,000 is imposed for every service or item the accused person has been excluded from.

Complexities in Healthcare Fraud Cases

The sad part is that some healthcare practitioners might be falsely or mistakenly accused of healthcare fraud. There are several cases where doctors have been charged with healthcare fraud as a result of administrative errors. Errors may happen due to carelessness or unintentionally.

What to Do If Accused

If you are accused of a healthcare fraud crime, the first thing you should do is to contact an experienced lawyer. He or she will guide you on the appropriate steps to take.