The penalties for Medicare fraud are severe. If convicted in federal criminal court, physicians and other providers can face hundreds of thousands of dollars in fines and years or decades of imprisonment, depending upon the specific crime (or crimes) alleged. In civil cases, providers can face enormous fines, recoupments, and various other financial penalties. In all cases, a finding of guilt or liability for Medicare fraud can lead to other direct and indirect consequences as well. And providers who fail to assert a successful defense can easily find their practices in jeopardy.
While the penalties for individual Medicare fraud-related offenses are severe, much of the risk in federal healthcare fraud investigations stems from the fact that federal agents and prosecutors have a multitude of tools at their disposal. From filing multiple counts of multiple charges to referring providers to their state licensing boards for disciplinary action, providers targeted in these investigations must be prepared to skillfully and strategically defend themselves against all angles of attack.
Penalties for Medicare Fraud: False Claims Act
Most Medicare fraud investigations involve allegations under the federal False Claims Act. The False Claims Act is a broad statute that prohibits the submission of any “false or fraudulent” claim for payment from the government, including requests for Medicare reimbursement.
An investigation under the False Claims Act can either be civil or criminal in nature. In a civil case, potential penalties include:
- Fines of over $21,000 per individual claim
- Treble (triple) damages
- Recoupment of overbilled amounts
- Pre-payment review and non-payment of future claims
- Medicare program exclusion
In a criminal case, the penalties for Medicare fraud include:
- Up to $250,000 in fines
- Up to five years of federal imprisonment per individual claim
- Recoupments and non-payment
- Medicare program exclusion
Penalties for Medicare Fraud: Anti-Kickback Statute
The Anti-Kickback Statute is similar to the False Claims Act in that it includes provisions for both civil and criminal penalties, but different in that it focuses exclusively on the unlawful payment of “remuneration” for patient referrals involving Medicare and Medicaid reimbursed services and supplies. Civil penalties under the Anti-Kickback Statute include:
- False Claims Act financial penalties
- Civil monetary penalties (CMP)
- Medicare program exclusion
Criminal penalties under the Anti-Kickback Statute include:
- Fines of up to nearly $75,000 per violation
- Up to five years of federal imprisonment per violation
- Medicare program exclusion
Penalties for Medicare Fraud: Stark Law
The Stark Law only applies to physician “self-referrals” and only includes provisions for civil penalties. However, it is still a major concern for practitioners who bill Medicare for their services. Potential penalties in civil Medicare fraud cases under the Stark Law include:
- False Claims Act financial penalties
- Civil monetary penalties (CMP), including enhanced CMP for “knowing” violations of the Stark Law’s prohibitions on physician “self-referrals”
Penalties for Medicare Fraud: 18 U.S.C. 1347
18 U.S.C. 1347 is the general healthcare fraud statute. It applies to all attempts “to defraud any healthcare benefit program” and is exclusively criminal in nature. In criminal prosecutions under 18 U.S.C. 1347 targeting fraudulent Medicare reimbursement claims, providers can face penalties including:
- Fines of up to $250,000 per offense
- Up to 10 years of federal imprisonment
- Up to 20 years of federal imprisonment for offenses resulting in serious bodily injury
- Up to life in federal prison for offenses resulting in death
Penalties for Medicare Fraud: Related Criminal Offenses
In addition to facing charges under the False Claims Act, Anti-Kickback Statute, Stark Law, and 18 U.S.C. 1347, providers targeted in Medicare fraud investigations will often face charges under a variety of other federal criminal statutes as well. Examples of these charges (and the penalties for these charges) include:
- Mail fraud : Up to a $250,000 fine and a term of imprisonment of 20 years
- Wire fraud : Up to a $250,000 fine and a term of imprisonment of 20 years
- Money laundering : Up to a $500,000 fine or twice the value of the property involved and a term of imprisonment of 20 years
- Attempt to commit Medicare fraud : The same penalties as the underlying criminal offense
- Conspiracy to commit Medicare fraud : The same penalties as the underlying criminal offense
- Tax evasion : Up to a $100,000 fine for individuals and $500,000 for businesses and a term of imprisonment of five years
Penalties for Medicare Fraud: DEA Registration Revocation
For healthcare providers who prescribe, dispense, and administer controlled substance medications, another potential consequence of a Medicare fraud accusation is the loss of your Drug Enforcement Administration (DEA) registration. The DEA routinely gets involved in Medicare fraud investigations targeting offenses related to providers’ prescription drug practices, and it is possible for providers to lose their DEA registration even if their investigation does not lead to a conviction at trial.
Penalties for Medicare Fraud: Medical Licensing Board Disciplinary Action
While absolutely possible, criminal convictions and substantial prison sentences are relatively uncommon in Medicare fraud investigations targeting legitimate healthcare providers. However, a consequence that is much more common is the initiation of disciplinary proceedings by providers’ state medical licensing boards.
The professional standards under most states’ medical licensing regulations are much higher than the standards for criminal culpability under federal law. As a result, it is not unusual for providers to face license suspension or revocation as the result of a federal Medicare fraud investigation that does not ultimately lead to prosecution. If there is evidence to suggest that a licensed provider has acted improperly even if this improper act does not rise to the level of a federal offense, the provider may still need to be prepared to present a strategic and effective defense in order to protect their privilege to practice.
Nationwide Reach Legal Representation for Healthcare Providers Accused of Medicare Fraud
Oberheiden, P.C. is a national reach healthcare fraud defense law firm that represents physicians, physician-owned entities, pharmacists, company executives, and other individuals and businesses in Medicare fraud investigations. If you have been contacted by federal investigators, it is imperative that you seek legal representation immediately. To discuss your case in a free and confidential consultation, call us at (888) 356-4634 or request a confidential case assessment online now.
Dr. Nick Oberheiden has successfully represented healthcare executives and physicians – as well as businesses in the areas of toxicology, pharmacy, home health and hospice centers, DME, hospitals, surgery centers, neuro-monitoring, and blood and DNA testing centers – in healthcare compliance and defense.