9 Things You Need To Know About Medi-Cal Fraud

Fraud in obtaining medical benefits under Medi-Cal, a state run program for certain categories of mostly low income individuals1, is prosecuted under a number of California statutes.

The offense combines welfare and healthcare fraud. Since only certain individuals are eligible for its low cost or free benefits. Along with low income individuals, seniors, pregnant women, foster children and seniors are eligible.

Overview of Medi-Cal Fraud

Medi-Cal fraud can be committed by individuals who lie about their eligibility and by healthcare providers who submit false or fraudulent bills, information or statements to obtain payments2.

Individuals may commit Medi-Cal fraud by committing any of the following acts:

  • Making false declarations so you or another person can obtain Medi-Cal benefits
  • Knowingly making a false statement for payment of a Medi-Cal benefit
  • Knowingly submitting a claim for a Medi-Cal benefit that was not used

Healthcare providers may commit Medi-Cal fraud by committing any of these acts:

  • Presenting a false or fraudulent claim for the furnishing of services or merchandising of products with the intent to defraud the program
  • Knowingly presenting false information for the purpose of obtaining greater compensation than otherwise entitled from the program
  • Using false representations to obtain money or property from Medi-Cal or executing or attempting to execute a scheme to defraud Medi-Cal
  • Soliciting, receiving, offering or giving a commercial bribe or kickback for the purpose of obtaining referrals for services or products covered under Medi-Cal

Medi-Cal Fraud – Individuals

You commit Medi-Cal fraud under 14014 WIS by lying about your eligibility. This includes:

  1. Receiving Medi-Cal benefits based upon false declarations you made regarding eligibility3
  2. Another person receives Medi-Cal benefits based on false declarations you made regarding that person’s eligibility

In both cases, you and the person for whom you made a false declaration would not have been eligible to receive the benefits but for your false statements4.

The penalties for violating this code section depends on the amount of the fraud pursuant to California’s theft statute. If the fraud was $950 or less, the violation is a misdemeanor, with the following sentence:

If the amount exceeds $950, the offense becomes a wobbler so that the DA has discretion to charge a misdemeanor or felony. If a misdemeanor, the jail sentence is up to one year.

If a felony, you face:

  • 16 months, 2 or 3 years in county jail
  • Formal probation
  • Fine up to $10,000
  • Repayment to the California Department of Health Care Services

The DA will look at your criminal history for past convictions of any felonies or even misdemeanors if including welfare or healthcare fraud as well as the circumstances of the fraud, its duration and the amount.

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Medi-Cal Fraud – Medical Professionals

As indicated, health care providers and professionals also commit Medi-Cal fraud, mostly by making false declarations or submitting false billing statements or overinflated ones. A medical professional commits fraud under this code section by engaging in any of the following acts:

  1. Presenting a false claim for payment for providing services or merchandise that Medi-Cal covers
  2. Knowingly presenting false information to obtain more compensation than what the provider would legally be entitled to under Medi-Cal guidelines
  3. Knowingly submitting false information to obtain authorization to provide healthcare services or merchandise to Medi-Cal patients
  4. Knowingly engaging in or executing a scheme or artifice to defraud the Medi-Cal program or using false pretenses to obtain money or property owned or controlled by Medi-Cal in connection with the delivery of or payment for healthcare services or goods

An example might be a doctor who has his medical assistant see patients and hand out prescriptions while charging Medi-Cal at a higher rate that is reflective of him having seen the patient and not the assistant.

This is a wobbler offense as well. If the provider is convicted of a misdemeanor, the penalties are:

  • Summary probation
  • Up to one year in county jail
  • And/or a fine up to 3 times the fraud amount

If convicted of a felony, the health care provider faces:

  • Formal probation
  • 2, 3 or 5 years in state prison
  • A fine up to 3 times the amount of fraud

A sentence under this code section can be enhanced if you were engaged in a scheme to defraud Medi-Cal under circumstances that did or was likely to cause great bodily injury to 2 or more persons. This will lead to an additional 4 years in prison for each person who did suffer great bodily injury as a result.

An example is allowing an untrained or unlicensed assistant to diagnose patients and then charging Medi-Cal as if the licensed physician was doing the diagnosing and treating. If a patient is misdiagnosed or not treated by the unlicensed assistant, then the physician is guilty of fraud and faces an enhanced sentence.

Medi-Cal Fraud – Kickbacks And Bribes

Salespeople, owners of merchandise and health care providers sometimes offer incentives to physicians or others to commit an act of Medi-Cal fraud.

It is illegal under this code section to solicit, bribe, pay or receive payment for doing the following:

  • Referring a patient to a service provider for medical services covered by Med-Cal
  • Or, to purchase, lease or order goods covered by Medi-Cal

This might involve a doctor prescribing a particular medication or device that may or may not be needed by the patient, receiving payment from Medi-Cal and splitting the profit with the salesperson.

A first offense under this section is a wobbler.

A misdemeanor carries up to one year in county jail. A subsequent offense is a felony, which carries 16 months, 2 or 3 years in county jail.

Penal Code Section 550 – General Healthcare Fraud

A DA could also charge a doctor or patient with defrauding Med-Cal under Penal Code 550, which is a statute dealing with healthcare fraud generally. A patient or healthcare provider commits fraud when engaged in the following:

  • Knowingly making or causing to be made a false or fraudulent claim for payment of a Medi-Cal benefit
  • Knowingly submit a claim for a Med-Cal benefit that the claimant did not use

A scenario under this code section is where a doctor and patient conspire to split payments received from Medi-Cal for services never rendered.

Violation of PC 550 is a wobbler offense. A misdemeanor carries:

  • Probation
  • Up to one year in county jail
  • A fine up to $10,000

A felony conviction has a sentence of:

  • Felony probation
  • 2, 3 or 5 years in state prison
  • Fine up to $50,000 or double the amount of the fraud, whichever is greater

Penalty For Medi-Cal Fraud

A violation of Insurance Code 1871.4 is a “wobbler” offense, meaning the DA can charge you with either a misdemeanor or felony depending on your criminal history and the extent of the fraud.

As a misdemeanor, you face:

  • Probation
  • Up to one year in county jail
  • Fine up to $150,000 or double the amount of the fraud, whichever is greater
  • Restitution

As a felony, you face:

  • Formal probation or non-custodial mandatory supervision
  • 2,3 or 5 years in county jail
  • Fine up to $150,000 or double the amount of the fraud, whichever is greater
  • Reimbursement to the insurer
  • Sentencing under California’ Realignment Program

Under realignment AB 109, certain non-violent felony offenders are sentenced to county jail or non-custodial supervision instead of state prison with supervision by county agents instead of by the state. The main significance of serving time in county jail is that your conviction is eligible for expungement.

What Our Clients Say

Legal Defenses

Medi-Cal fraud costs California millions of dollars so that these cases are vigorously prosecuted. You do have defenses available if you are charged:

Lack of Fraudulent Intent

If you made an innocent mistake or otherwise lacked intent to commit fraud, then you may not be convicted. The DA must prove beyond a reasonable doubt that you knew a statement you made or a claim you submitted was false

Lack of Evidence

A DA might attempt to show motivation to commit fraud because of your financial difficulties that may or may not be true. Other circumstances may be that your medical assistant provided a false license or a secretary was filing false claims and embezzling from you. If the offense involved an allegation of inappropriate treatments that were charged, a defense expert could counter that the diagnosis was not unreasonable nor were the treatments.

Related Offenses

Forgery California Penal Code 470 PC
You also face additional charges if facing Medi-Cal fraud. Forgery may be committed if you:

  • Sign someone else’s name on a document submitted for payment to Medi-Cal
  • Falsify a legal document such as an application for eligibility for Medi-Cal benefits
  • Alter or represent as genuine a falsified financial document when applying for Medi-Cal benefits

Forgery is a wobbler offense and charges are the same as those under California grand theft found in PC 4735.

Perjury – California Penal Code 118 PC
Knowingly giving false information under oath is perjury. When you deliberately lie about your income and assets when applying for Medi-Cal benefits, you are committing perjury since you are presenting this information under penalty of perjury6.

Perjury is a felony and carries a sentence of 2, 3 or 4 years7.

Additonal Fraud Laws

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Footnotes

  1. See Medi-Cal explanation – California department of Health Care services []
  2. People v. Pugh (2002) 104 Cal.App.4th 66, 72 [127 Cal.Rptr.2d 770]; People v. Gaul-Alexander(1995) 32 Cal.App.4th 735, 745 [38 Cal.Rptr.2d 176 []
  3. See penalties under Welfare & Institutions code 14014 []
  4. People v. Scofield (1971) 17 Cal.App.3d 1018, 1025-1026 [95 Cal.Rptr. 405]; People v. Benson (1962) 206 Cal.App.2d 519, 529 [23 Cal.Rptr. 908 []
  5. Penal Code 473  – Punishment for forgery (a) Forgery is punishable by imprisonment in a county jail for not more than one year, or by imprisonment pursuant to subdivision (h) of Section 1170.” []
  6. Penal Code 118 PC – “Perjury” defined; evidence necessary to support conviction [may be charged along with Medi-Cal fraud]. (“(a) Every person who, having taken an oath that he or she will testify, declare, depose, or certify truly before any competent tribunal, officer, or person, in any of the cases in which the oath may by law of the State of California be administered, willfully and contrary to the oath, states as true any material matter which he or she knows to be false, and every person who testifies, declares, deposes, or certifies under penalty of perjury in any of the cases in which the testimony, declarations, depositions, or certification is permitted by law of the State of California under penalty of perjury and willfully states as true any material matter which he or she knows to be false, is guilty of perjury.” []
  7. Penal Code 126 PC – Punishment. (“Perjury is punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three or four years.” []

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