Healthcare fraud is the submission of false claims or the misrepresentation to healthcare insurers about care or services regarding services or care that may or may not have been provided or in the manner billed. These offenses include unlawful acts against public insurers such as Medicare and Medi-Cal as well as those against private insurers including workers’ compensation carriers. The code section that generally applies to this type of fraud is Penal Code 550.
These types of offenses are committed by health care providers including nurses, nurse practitioners, chiropractors, dentists, physical therapists and administrators.
Health care fraud occurs in various ways:
- Claims for services or care that were not provided
- Claims for services that a patient did not need
- Billing for more expensive procedures than were actually performed (upcoding)
- Submitting multiple claims for the same service
- Submitting undercharges without overcharges
- Preparing and submitting documents in support of a false health care claim
- Conspiring with or being complicit in the fraud
Undercharging refers to a situation where you charged a patient less than the procedure cost, usually by mistake. You are not permitted to “make up” for the undercharge by overcharging the patient in the future or billing for some other nonexistent procedure or visit.
Some healthcare providers are aware that billing procedures and reviews are complex and that often false claims can be presented without the insurer’s knowledge since it would entail a costly investigation.
For example, patients are usually unaware of what care or services are being billed since they do not review the billing statements or do not understand the procedure being billed. They also are unaware if their doctor is double billing. Further, patients generally trust their doctors regarding procedures that they advise their patients to undergo. The insurance company that covers the procedures would have to question the procedure and patient and have a patient’s records reviewed for unnecessary treatments.
To Prove health care fraud, the prosecutor must prove you engaged in any of the above practices along with the following elements:
- Knowledge that the claim was false or fraudulent and,
- With the intent to defraud a medical insurance company or healthcare insurance program
Healthcare fraud can also be charged to unwary secretaries or assistants who prepare medical reports or billing statements that contain false data, though a district attorney would have to show more to demonstrate knowledge that the claim was false. For example, if the individual assists the practitioner in the patient’s care and is aware of what tests were performed or care provided and now prepares the billing statement that bills for tests or care not provided, this is probably sufficient for criminal liability.
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The penalties and sentences for healthcare fraud turn on the dollar value of the fraud. If it is $950 or less, it is a misdemeanor. The penalties for a misdemeanor conviction include:
- Up to 6 months in county jail
- A fine of up to $1000
If the fraud was more than $950, it is a “wobbler” so that the DA has the discretion to charge you with ether a misdemeanor or a felony. Under this criteria, the penalties for a misdemeanor are harsher:
- Up to one year in county jail
- A fine up to $10,000
If the district attorney decides to charge you with a felony, you face:
- Probation and up to one year in county jail
- Or, 2,3 or 5 years in county jail
- And/or be fined up to $50,000 or double the amount of the fraud, whichever is larger
Health care professionals also risk censure, suspension, or revocation of their professional licenses if convicted of health care fraud.
If any of the above practices were done, law enforcement may charge you with fraud. You can defend yourself with the help of an experienced criminal defense lawyer by using these common defenses:
Lack of Knowledge or Mistake
A practitioner or assistant who is charged still has to demonstrate knowledge that the fraudulent act was committed. If a doctor forgot that a procedure was already billed out or mistakenly coded the procedure, this shows lack of knowledge and innocent mistake of fact.
If the medical assistant was not involved in the care of the patient and merely billed what the practitioner said to do, then lack of knowledge may be apparent here as well.
Lack of Intent
Lack of intent to defraud may be a part of lack of knowledge since you are unaware of the unlawful billing practice so naturally there is no intent. You may also show lack of intent to defraud if you intended to alert the insurer of the error or authorities that the doctor was engaged in unlawful billing practices.
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Any health care conviction under PC 550 is eligible for expungement since it does not require that any time served be in state prison. The criteria for eligibility includes the following:
- You served no time in state prison
- You completed all terms and conditions of your probation
- You did not commit a subsequent felony
- No criminal charges are pending
Reducing a Wobbler Felony
If you were convicted of felony healthcare fraud under any of the code sections that are wobbler offenses, you can petition the court to reduce it to a misdemeanor before having it expunged under PC 17(b)(3). The benefit of reducing it is that it restores your 2nd Amendment right to own and possess firearms, the right to run for public office, serve in the military and to receive certain public benefits in some cases. For medical professionals who lost their license, they can use this to support a petition for reinstatement.
Regarding loss of license for physicians, the offense must have been substantially related to the qualifications, functions or duties of a doctor to warrant any form of discipline.
Since you have to wait until your probation has been served, you can ask the court to reduce your probation under PC 1203.4 so you can request an expungement sooner.
Medi-Cal Fraud-14014 WIS, 14107 WIS, 14107.2 WIS
Medi-Cal is a state-run program for low income individuals, seniors, disabled, pregnant women and people with specific diseases. Patients can also be charged and convicted for fraud for lying about their conditions and finances when applying for eligibility.
This is a wobbler offense and depends on the dollar amount of the fraud as whether to charge as a misdemeanor if the fraud is $950 or less, or either as a felony or misdemeanor if the fraud exceeds that amount. If a felony, you face 16 months, 2 or 3 years and a fine up to $10,000 as well as restitution.
This is an offense committed mainly by patients who may doctor-shop and get multiple prescriptions. Physicians may also commit this offense by prescribing unnecessary medication. As felony, you face 16 months, 2 or 3 years and possible loss of your professional license if a health care provider.
This type of fraud may be committed by the worker, health care provider, employer or anyone else who participates in the illegal conduct. Workers commit fraud by alleging injuries that did not occur on the job or faking or exaggerating their condition. Employers commit fraud by providing false information to employees to dissuade from applying for benefits. A health care provider who provides false medical reports so the worker can obtain benefits or who submits false or fraudulent bills is also guilty of the offense.