Healthcare Fraud, Criminal Charges, and 18 USC §1347

Categories: Medicare Lawyer


How This All-Important Federal Statute Can Send Doctors to Prison Over Billing Disputes

If you work for (or own) a medical business, you need to take great care when submitting claims for payment to commercial insurance companies or government programs like Medicare, especially if those claims come into dispute.

Increasingly, minor medical billing errors and disputes are transforming into major federal enforcement actions, both civil and criminal in nature.

It probably goes without saying that a dispute with the government (such as the Centers for Medicare & Medicaid Services) might arouse close inspection from federal agents.

But don’t make the mistake of assuming that a private dispute between you and a private insurer will stay private.

In fact, it is becoming more common for health insurance companies’ internal fraud prevention departments to turn information over to federal law enforcement. A full-scale investigation usually follows and can include:

  • Intrusive audits
  • Undercover surveillance
  • Paralyzing fines and/or payment penalties
  • Civil enforcement proceedings
  • High-profile, highly publicized criminal charges (healthcare fraud prosecutions make big headlines these days)

Whether your conflict is with CMS, a commercial insurance provider, or any other organization, agents have a convenient statute available to them if they want to leverage criminal charges against you: 18 USC §1347, the U.S. healthcare fraud statute.

If you’re a medical care provider (or owner or employee), you need to understand how 18 USC §1347 can turn your ordinary healthcare claim dispute into a terrifying fraud case – and how to prevent that from happening in the first place.

What Does 18 USC §1347 Say?

Any analysis of whether a medical practice is in danger of billing fraud charges must begin with the full text of 18 USC §1347, which is the principal statute used in healthcare fraud cases (though certainly not the only one). We’ll start with the language itself, then break it down in simpler terms in the sections to follow.

(A) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice –

(1) to defraud any healthcare benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program,

in connection with the delivery of or payment for healthcare benefits, items, or services shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.

(B) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.

When and How Does 18 USC §1347 Get Applied to Health Professionals?

Like so many federal criminal laws, 18 USC §1347 is verbose and complex. Let’s isolate the most important provisions to break the statute down into:

  • elements (the list of things prosecutors must prove beyond a reasonable doubt in order to convict the defendant),
  • definitions (because Title 18 of the U.S. Code provides some limited clarity for several of the more seemingly ambiguous terms in this statute), and
  • penalties (the potential prison sentences and/or monetary fines you could face after being convicted).

Elements of 18 USC §1347

  • Defendant executed a scheme to defraud any healthcare benefit program (or attempted to do so), and
  • The fraud was in connection with the delivery or payment of healthcare benefits or services, and
  • The defendant acted “knowingly and willfully.” (In other words, the scheme itself must have been intentional, though it doesn’t matter whether the defendant knew specifically about the existence of 18 USC §1347.)

Definitions Relevant to 18 USC §1347

  • Healthcare Benefit Program: As used in this title, the term “healthcare benefit program” means any public or private plan or contract. (This means that Section §1347 applies to private insurance plans such as Cigna or Blue Cross just as it does to federal benefits programs like Medicaid, Medicare, VA benefits, etc.)
  • Scheme to defraud: While the statute doesn’t specifically define this term, for purposes of understanding Section §1347, you should know that even one false bill or misleading statement could be enough to qualify as a “scheme to defraud.”
  • Whoever: Note that anyone can be prosecuted under this law: patients, medical care providers (doctors, pharmacists, nurses, etc.), business owners and executives, and even corporate entities.

Penalties Under 18 USC §1347

  • A monetary fine, or
  • 10 years in prison (or 20 years if the fraud leads to serious bodily injury; up to life in prison in the event of a death), or
  • Both

Call Oberheiden, P.C. to Talk About Your Options

Anyone billing insurance companies or the federal government for healthcare services must be extremely cautious in handling invoices and/or claims disputes.

In fact, given the constant wave of crackdowns in the field these days, we strongly urge any medical practice undergoing audit or review – or encountering questions from an insurance company that hint at suspicions of fraud – to contact an experienced healthcare fraud defense law firm right away.

Proactive legal representation can make all the difference in how far your case goes.

Oberheiden, P.C. is a defense law firm providing federal law services to its clients across the nation and focusing its services on healthcare providers and businesses. Our former federal prosecutors have a significant record of success and we are proud to offer free and confidential consultations to care providers with legal concerns. Contact us online or call (888) 727-0472 today.

Oberheiden, P.C.
Compliance – Litigation – Defense
(888) 356-4634
This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Merely reading this information does not create an attorney-client relationship. Prior results do not guarantee similar outcomes in the future, every case is different. Oberheiden, P.C. is a Texas firm with its headquarters in Dallas. The attorney on record limits his practice to federal law.
Healthcare Fraud Defense Law Firm – Oberheiden, P.C.