Healthcare & Medicare Fraud
When someone files a fake claim for services or products that were never delivered and they expect to receive compensation for those claims, it constitutes fraud according to state and federal law. Unfortunately, this is a growing problem nationwide, to the tune of up to $250 billion yearly. The people involved in this type of fraud are not just health care providers; individual consumers who file false claims to obtain payments also participate in this criminal activity.
The incidences of Healthcare & Medicare Fraud are skyrocketing, despite a strong effort to curtail this problem. During 2012, two agencies, the Department of Justice and the FBI, were able to recover $4.2 billion of fraudulent Medicare payments that were made. To achieve this, they had to open 1,311 new investigations that involved 2,148 defendants.
Part of the problem that allows widespread fraudulent activity to capture so much money is time. Congressional legislation requires payment within 30 days for legitimate health care insurance claims. Several agencies are entrusted with making investigations into healthcare fraud. Although the Federal Bureau of Investigation, U.S. Postal Service, and the Office of the Inspector General are excellent at tracking down fraud perpetrators, this 30 day rule usually does not give them sufficient time to perform an investigation before those claims must be paid.
Healthcare Fraud Costs
As mentioned earlier, healthcare fraud costs are generally passed along to consumers, which means everyone covered by health insurance plans or Medicare are going to pay higher premiums for healthcare products and services. It is estimated that 3 to 10 percent of the annual $2.5 trillion that is spent on health care annually is attributed to fraud.
According to a May 2012 report from the FBI, the costs related to healthcare fraud range from $75 billion to $250 billion. This means people are paying about 10% more than they should have to pay for their medical care. Since most people who are on Medicare are older, the costs of this type of fraud are even more financially painful.
Healthcare Fraud Offenses
Fraud is a criminal offense. The states and Federal government have strong laws and penalties for insurance fraud. However, with so many people involved in trying to bilk money out of healthcare insurance companies and Medicare, it is very difficult to find and charge all who are guilty of this crime.
The basic concept of healthcare fraud is that people file dishonest claims for health care services and/or products with the intent to obtain financial gain. There are many reasons why people do this, and how they accomplish their mission to defraud.
People file false claims to obtain payments from their health insurance plan. They may design their claim in order to obtain unneeded prescriptions that they can sell on the black market and get money from that activity.
- More common than individual fraud, with many schemes:
- Billing insurance companies for care that was never provided
- Filing multiple claims for the same service
- Altering dates or descriptions of services rendered
- Reporting incorrect diagnoses to increase reimbursement amounts
- Using unlicensed staff
- Giving kickbacks for referrals
- Prescribing unneeded treatment to increase reimbursements
Insurance Fraud Laws – Criminal Charges
Many states and the federal government have Insurance Fraud Laws that classify offenses as several different types: false claims, self-referral and anti-kickback. The basic laws state that it is illegal to knowingly and willfully attempt to or succeed at executing any scheme to defraud a health care benefit program or to obtain money from that program under false claims.
Criminal charges are stiff, and depend on the details of the offense. A recent worst case, in the eyes of Federal authorities, occurred in Michigan. This involved a famous cancer doctor who lied to patients, telling them they had cancer when they did not. He benefited from claims for medical treatments that were unnecessary, prescriptions for unnecessary chemo and drugs, and more. Some of the patients suffered, including a man who lost his legs because unnecessary drugs suppressed his immune system. Another patient died from her unnecessary chemo. The doctor got away with this for years until finally caught, bilking Medicare out of $91 billion. He recently pleaded guilty to 16 counts, and faces serious jail time in addition to high fines for insurance fraud. Federal authorities want a life-in-prison sentence; the doctor still faces many additional civil lawsuits.
Healthcare Fraud Conviction & Penalties
Federal law (18 U.S. Code § 1347) allows for fines and prison time of up to 10 years upon a conviction. If the violation results in any serious bodily harm, that prison time could be extended to 20 years. If a death is the result of this type of fraud, the prison time could be a life sentence. Not knowing the law or not intending to violate the law about this offense is not an excuse.
Individual states have specific penalties for those convicted of Healthcare Fraud. For example, in Massachusetts, the penalties depend on whether the fraud is classified as a civil or criminal violation. The civil conviction demands the perpetrator pays full restitution, but fines and jail time are unlikely. A criminal healthcare fraud charge will mean serious time in prison. Medicare fraud in this state may result in a five year prison sentence, but federal penalties are longer. A conviction of defrauding Medicare or Medicaid can bring a fine of $250,000 per offense.
Criminal Defense against Fraud Charges
If you have been accused of healthcare fraud at either the state or federal level, it is important to immediately seek help from an experienced criminal defense attorney who has a strong record of success handling fraud cases. Your freedom, financial well-being and your future depend on having an attorney on your side who understands this area of law thoroughly.