What is Healthcare Fraud?
Commonly known as health insurance fraud, Medi-Cal fraud, or Medicare fraud, healthcare fraud is currently a booming area for fraud. The criminal activity hinders medical facilities and practitioners, from offering cost-effective treatment to patients, particularly those economically disadvantaged. Consequently, prosecutors and the police take allegations seriously and file charges against suspects, including innocent persons.
Below are some of the conduct that can result in the charges:
- Overbilling or double-billing for medical care services
- Filing a claim for a medical service that was not offered
- Billing for a service not covered by an insurance provider policy
- Using another person's insurance details to get healthcare services
- Faking a disease to obtain medication so that you can sell the drugs
Categories of Healthcare Fraud
This type of fraud entails claims for payments of services that medical practitioners submit to government health insurance programs or private health insurance providers. The crime can be grouped into:
Submitting a Claim for Services that Weren't Delivered
Per Penal Code Section 550, it is illegal to present a medical claim for a procedure or service that the individual named in the claim did not use. In layman's language, it is a crime to submit a claim to an insurance firm for medical services not rendered.
Preparing a Writing in Support of the Fraudulent Claim
It's also a crime to prepare documents that support a fraudulent claim.
That means a billing assistant or receptionist working in a physician's office could be charged for scams they didn't initiate or acquire money from.
Multiple Claims
You also risk facing PC 550 charges for submitting more than one claim for the one medical service (double-billing the insurer).
Submitting Undercharge Without Overcharges
Under PC 550, it is illegal to send bills to an insurance firm for medical services previously undercharged, without simultaneously sending the company a medical bill for a service overcharged earlier.
For instance, Ben is a family doctor to Joseph. Joseph makes several visits to the doctor during the year. When Ben is analyzing his annual accounts, he learns two mistakes:
Joseph visited him in May for allergy shots and physical examinations that cost five hundred dollars. However, Ben only billed his patient's insurer for three hundred dollars, that was the physical examination cost. He underbilled the insurer by two hundred dollars.
In August, Joseph revisits the doctor to have an examination conducted. The medical facility billed the insurer for three hundred dollars. However, during that visit, Joseph only saw a nurse, and the total cost was one hundred and fifty dollars. In other words, Ben overbilled the health insurance firm by one hundred and fifty dollars.
Should the doctor submit to the insurer a claim of the amount underbilled in May and doesn't tell the insurer about the extra money he obtained in August, he has violated PC 550 law.
Submitting False or Fraudulent Claims
You can also violate the law when you submit a fraudulent or false claim for medical care benefits. It can include:
- Performing a medical procedure or service which a patient did not require and billing for it
- Billing coverage for more high-end service or procedure than what the patient received (upcoding)
- Applying a charge to a patient with coverage that isn't applied a patient who pays out of pocket
What are the Other Elements of the Crime?
To be convicted of PC 550, the prosecution has to prove beyond any reasonable doubt that you engaged in either of the conduct discussed above. Below are more facts of the offense that the prosecutor should establish:
Aware that the Medical Claim was Fraudulent or False
You could only be found guilty of Penal Code Section 550 if you were aware that the healthcare claim you submitted was a duplicate or fraudulent claim, or the documents you prepared would be used to present the false claim.
Intend to Defraud
The intent is one of the common elements of criminal fraud law in California.
Likewise, a defendant could only be sentenced for the crime if it is established that the defendant planned to defraud the insurance program or medical insurer.
Penalties for Violating HMO Fraud
The penalties for HMO fraud depend mainly on whether the claim’s value is higher than $950.
If your charges are at least one claim, the main concern is whether the false claims total in twelve months is above nine hundred and fifty dollars.
Claims Above Nine Hundred and Fifty Dollars
If the fraudulent claim is above nine hundred and fifty dollars, the crime is a wobbler. A wobbler is a crime that the prosecutor can prosecute as either a felony or a misdemeanor.
If prosecuted as a California misdemeanor, you will face a year in jail and ten thousand dollars in fines. A felony, on the other hand, is punished by:
- One-year probation in jail
- A two, three or five-year jail sentence
You might also or instead be fined for a California felony conviction in amounts equivalent to:
- Double the fraudulent amount
- A maximum of fifty thousand dollars (whichever claim amount is higher)
Claims Less than $950
If the fraudulent claim is below nine hundred and fifty dollars, the offense is a California misdemeanor. It is punishable by:
- A six-month county jail sentence
- One thousand dollars in fines
Loss of Your Professional License
Typically, Penal Code Section 550 PC defendants are medical care practitioners. If sentenced, your professional license could be suspended or revoked. It can be very devastating for the medical board to suspend or revoke your professional license due to the conviction.
How to Fight Healthcare Fraud Charge
If you are charged with Medicare fraud, the following are legal defenses that your skilled attorney can use to defend you:
Mistake of Fact
You can't be sentenced for fraud if you did not know that you were submitting a duplicate or false medical claim.
Since health insurance and medical billing are complicated, it is not uncommon for experienced and qualified experts to make errors on how the billing process works.
Lack of Intent
Another essential defense to the charge is lack of intent. If the prosecution team cannot prove the intention to defraud, your case should be dismissed.
Related Crimes
Discussed below are offenses that are charged together with or in place of the crime in question:
Aiding, Abetting, Conspiring, or Soliciting in Healthcare Fraud
Under Penal Code Section 550, it's also illegal to:
- Help another person submit a false claim
- Engage in conspiracy with other persons to submit fraudulent claims
- Solicit another person to surrender a false medical claim on your behalf
If a defendant engages in one of the mentioned-above behaviors, they could be subjected to the same penalties as if they submitted the false claim.
Prescription Fraud
Popularly known as doctor shopping, prescription fraud happens when you try to obtain a prescription for controlled substances and painkillers through:
- Concealment of the material fact, or
- Subterfuge, misrepresentation, fraud, or deceit
It is a wobbler. A misdemeanor carries a year in jail, whereas a felony is punishable by sixteen months, two, or three years in jail.
Worker's Compensation Fraud
Worker's compensation fraud is insurance fraud related to workers' compensation benefits. The compensation is an insurance system that offers compensation for lost wages and medical care to employees hurt on the job.
Conduct regarded as fraud include:
- Intentionally presenting or making a false material to deny or obtain benefits.
- Preparing a false statement about benefits qualifications to discourage an employee from claiming benefits
- Presenting multiple claims for payment of benefits all for one injury
The crime is a wobbler. A misdemeanor is punishable by a one-year jail sentence. A felony carries a maximum of five years in prison and a fine of $150,000.
Medi-Cal Fraud
Medi-Cal is a public health coverage program for low-income persons, including seniors, people living with disabilities, persons with specific health conditions, families with minor children, and expectant mothers.
It is illegal for you to deceive about something that affects your qualifications for coverage benefits.
Commencing Investigations
If the health insurance provider has a case and a legal expert files it for them, the investigation begins. Healthcare fraud commences by bringing the case and presenting a complaint and material proof to the government. Once the government is served, it contacts the healthcare insurer's lawyer and schedules an interview. During the interview, the government will analyze the case's credibility and collect information that aids in its investigations.
Investigations Process
During the investigations process, the prosecution team will contact the involved government agency, obtain the authority's opinion/thoughts about your case, collect and analyze the government data to determine the case's size, and learn how to investigate.
The government could issue you a civil investigatory demand to acquire documents and simultaneously interview former workers.
The government can also choose to:
- Contact you for an interview.
- Depose company employees
- Present the allegation in the complaint to you (without revealing the case facts filed or the identity of the whistleblower) and request you to reply
Concluding Investigations
After the case investigations, the government decides whether to pursue or decline your case. At that moment, your case comes out from under seal, and if your case proceeds, you will be served with the complaint.
If your case does not proceed and the insurance company doesn't seek case litigation, both the whistleblower and the government voluntarily dismiss it.
How is Healthcare Abuse Different from Healthcare Fraud?
People often confuse healthcare abuse with healthcare fraud. The variation is the intent behind the crime. Fraud is deliberate misrepresentation or deception with the knowledge that the details submitted are false. Abuse, on the other hand, involves behavior that is inconsistent with the sound fiscal, recognized behavioral healthcare practice or business and leads to:
- Compensation for services which aren't medically necessary
- Compensation for services that do not meet the healthcare standards
- Unnecessary costs
Usually, abuse can cause the same unnecessary costs of medical care and impediments as a fraud.
Why You Require a Criminal Defense Lawyer
Often people charged with PC 550 are innocent. Also, the judicial system is a slow-moving and complicated process. To successfully navigate the system, you require legal assistance.
After your arrest, you can ask a lawyer to see you. During this time, it is wise to have the lawyer discuss your case with the law enforcers. The lawyer also knows how to arrange for your bail so that you can be released from custody.
Your criminal defense attorney will protect your civil rights. It can include protection from police misconduct or unconstitutional searches.
During the case trial, the attorney's knowledge and experience allow them to negotiate with the prosecutor and the court. They can get your charges reduced or even dropped. What proof can be used during the trial could also be discussed.
Moreover, the lawyer will investigate your case. They know what available resources are necessary for your defense. They will obtain statements from witnesses about the crime.
Find a Fraud Defense Attorney Near Me
As the government tries to reduce medical care costs, medical providers and billing service providers are under scrutiny, leading to a rise in criminal charges. You or your company could be charged for allegedly billing an insurance firm unnecessary services or procedures not performed or overbilling for services offered. Healthcare fraud charges can lead to fines and incarceration. It is essential to engage a defense attorney who can assist you in developing strong legal defenses. Our experienced lawyers at the Long Beach Criminal Attorney are knowledgeable about protecting your rights throughout the process. Call 562-308-7807 today to schedule your initial consultation.
