National Healthcare Fraud Defense Attorneys & Criminal Defense Lawyers

National Healthcare Fraud Defense Attorneys & Criminal Defense Lawyers

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All About Healthcare Fraud Investigations, Charges, Penalties

What You Need to Know About Healthcare Fraud Investigations, Charges, Penalties, and How They Are Defended in Court

To be accused of healthcare fraud is akin to entering the most complex of mazes: hard to navigate, fraught with wrong turns, and difficult to escape.

What is more, federal prosecutors are getting very creative in prosecuting and charging healthcare fraud. In order to help you understand healthcare fraud charges and the process, our healthcare fraud defense attorneys have provided you with this guide.


What is Healthcare Fraud?

What is Healthcare Fraud?

First, it is important to understand exactly what healthcare fraud is. Healthcare fraud is a general term applied to any scheme to commit fraud against a health care insurance program.

Fraud is generally defined is a material misrepresentation designed and intended to result in financial gain. In the healthcare context, the misrepresentation is usually a claim submitted to an insurance company such as MedicareMedicaid, Tricare, Blue Cross Blue Shield etc.

When a claim is submitted for reimbursement for services that were either not medically necessary, not conducted, overbilled, or not allowable, the person and entity that caused the bill to be submitted can be prosecuted for fraud.

Here are some examples of healthcare fraud:

    • Billing for services not rendered
    • Violation of the Anti-Kickback Statute (paying or receiving referrals)
    • Self-referral arrangements (Stark Law)
    • Upcoding by charging for a higher-level service than preformed (99213-99214)
    • Unbundling by charging multiple codes in order to increase reimbursement
    • Pharmacy fraud (billing for medication but not filling the medication)
    • Home healthcare fraud
    • Dental insurance fraud
    • Improper laboratory referral relationships
    • Billing for providers excluded by Medicare or Medicaid
    • Improper coding
    • Overutilization, such as preforming too many back injections
    • Prescription fraud by overprescribing opiates

What Laws Do Federal Prosecutors Use to Prosecute Healthcare Fraud?

What Laws Do Federal Prosecutors Use to Prosecute Healthcare Fraud?

Typically, a healthcare fraud indictment contains a charge of healthcare fraud conspiracy along with several individual executions of healthcare fraud. The indictment may also contain other federal criminal defense counts such as a money laundering charge in addition to a forfeiture charge.

The government will charge healthcare fraud conspiracy because the federal conspiracy rules are extremely relaxed; they only require that the government prove an agreement to commit healthcare fraud and an act in furtherance of the scheme.

The government also attempts to seize a significant amount of assets from those charged with healthcare fraud, chiefly to prevent the defendant from using allegedly unlawful proceeds to defend healthcare fraud charges. 

Among the federal statutes charged in a common healthcare fraud indictment:

These different charges each have different “elements” that the prosecutors must prove beyond a reasonable doubt to a jury.

For healthcare fraud, the government would have to prove all four of the following elements: the defendant (1) knowingly, and (2) willfully, (3) devised a scheme or artifice to defraud a healthcare program, and (4) executed the scheme. 

As simple as that explanation may sound, there is a lot to to healthcare fraud. There are statutes and safe harbor provisions, which are not only complex but also ever-changing. Volumes of cases have been decided interpreting each of these statutes and their application.

What are the ‘Elements’ of Healthcare Fraud?

What are the ‘Elements’ of Healthcare Fraud?

In order to be convicted of healthcare fraud, the government must prove that the defendant:

    • devised a scheme or artifice;
    • to defraud a healthcare benefit program;
    • and that the scheme was executed.

The government must prove this beyond a reasonable doubt. Many attorneys who do not specialize in healthcare fraud are unaware that violations of billing requirements such as local coverage determinations (LCDs) or national coverage determinations (NCDs) are insufficient, alone, to satisfy this requirement.

Despite this fact, the government and the DOJ Healthcare Fraud Strikeforce have been pushing the envelope in charging decisions. Healthcare providers are continuously indicted on weaker healthcare fraud charges, with less evidence, for differences of opinion related to the practice of medicine or pharmacy, such as:

    • Exceeding opioid prescribing guidelines
    • Exceeding urinalysis testing guidelines
    • Exceeding back injection guidelines
    • Improper entries into medical records
    • Upcoding
    • Unbundling
    • Billing improper CPT Codes (99211-5)
Unfortunately, for physicians facing healthcare fraud charges, this fact has resulted in more cases proceeding to costly trials. But a skilled Medicare fraud lawyer with a focused approach to the case can drastically save the time and money necessary to defend healthcare fraud charges.

Defending a federal healthcare fraud case requires your defense counsel to convince the government that it will not be able to prove the elements to a jury — thereby resulting in a dismissal or by presenting a compelling case to the jury that prosecutors cannot prove the elements of the offense beyond a reasonable doubt.

Who Investigates Healthcare Fraud Cases?

Who Investigates Healthcare Fraud Cases?

Healthcare fraud is investigated by the following agencies:

    • DOJ Healthcare Fraud Strike Force
    • Health and Human Services Office of Inspector General (HHS-OIG)
    • Federal Bureau of Investigation (FBI)
    • Drug Enforcement Administration (DEA)
    • The Appalachian Regional Prescription Opioid Taskforce
    • Local Medicaid fraud control units (such as the Detroit Medicare Fraud Strike Force and operations in major cities such as Chicago, Dallas, and Philadelphia)
    • State Medicaid fraud control units

Typical healthcare fraud is initially investigated using data. CMS and HHS review statistical data generated from Medicare and Medicaid bills to look for outliers. If you believe your practice is an outlier, you should contact a Medicare fraud defense attorney and/or a Medicaid fraud defense lawyer to begin your representation process immediately. Quick action and a compliance plan may prevent indictment.

Once the OIG or CMS finds an outlier, it typically conducts an audit and, in severe cases, may immediately refer a case for criminal prosecution.

During an audit, HHS will obtain billing records and request medical records. An initial audit may require review of only a few files, often called a probe audit. If fraud is suspected after an audit, the case will be referred for investigation and prosecution. When the case is referred, federal law enforcement agents will begin investigating the billing data and interviewing witnesses in order to prepare a case.

Once the case is prepared, an attorney from a local U.S. Attorney’s Office or the Healthcare Fraud Strikeforce will prepare an indictment and take a case to the grand jury. If a grand jury returns an indictment, the subject of that indictment will be charged with healthcare fraud and be required to defend that indictment in court.

How Do I Know That I am Under Investigation for Healthcare Fraud?

How Do I Know that I am Under Investigation for Healthcare Fraud?

A healthcare fraud investigation starts a variety of ways. If your counsel has his or her ear to the ground, it’s not difficult to determine whether you are facing a healthcare fraud investigation.

Here are some of the signs that you may be under investigation for healthcare fraud:

    • Search Warrant: If a search warrant is executed against you or your practice, you should contact our experienced healthcare fraud defense attorneys immediately. We can provide you immediate advice to help protect your rights during this difficult situation. We can also assist your staff to alleviate the confusion and fear that comes with the process.
    • Grand Jury Target Letter: If you receive a grand jury target letter, this is a sure-fire sign that you are the target of a federal investigation. The definition of the “target” of a federal investigation is that the government believes sufficient evidence exists to convene a grand jury and seek an indictment.
    • Grand Jury Subject Letter: If you receive a letter from the DOJ or a federal prosecutor alleging that you are the “subject” of a federal healthcare fraud investigation, you need counsel immediately. This means that federal prosecutors are seeking an indictment against you or your healthcare entity but have not yet received enough evidence to convene a grand jury. Without adequate representation, you could easily turn into a “target” of a federal investigation.
    • Grand Jury Witness Letter: If you receive a letter indicating that you are a “witness” in a grand jury, for which the subject matter of your potential testimony deals with your ownership or employment with a practice or healthcare business, you need counsel immediately. Witnesses, without adequate representation, often turn into subjects and targets.
    • Grand Jury Subpoena: The government has tools such as subpoenas to get information from healthcare providers and entities in order to investigate healthcare fraud. One is a grand jury subpoena. This allows the government to compel production of records and testimony before a grand jury to support their criminal investigation. Everyone who is subpoenaed for documents or testimony should consult with a knowledgeable healthcare fraud attorney. Often, we are able to defeat the government subpoena or alleviate the need for testimony.
    • Civil Investigative Demand: A civil investigative demand is a civil tool used by civil prosecutors to collect records in furtherance of a violation of the False Claims Act. However, given the similarities in the conduct required to prove a violation of the False Claims Act and the healthcare fraud statutes, defendants facing false claims cases should prepare for the potential for a parallel criminal investigation.
    • Signs of Active Investigation: Clients often learn that they are under healthcare fraud investigation after they learn that patients, employees, and other potential witnesses are being investigated or they see signs of surveillance.
    • Increased Audits: Many clients will face an increase of record requests and audits by Medicare, Medicaid, and commercial insurance carriers. This is a sign that insurance companies may suspect fraud, and their compliance departments routinely report these allegations to federal and state law enforcement.
    • Medicare Suspension: Medicare has the ability to suspend a provider or entity based on “credible or suspected allegations of fraud.” If you receive a Medicare suspension letter alleging fraud, it is important to contact an experienced healthcare fraud attorney who can also assist you with regaining compliance.

What Are the Stages of a Healthcare Fraud Investigation and Prosecution?

What are the Stages of a Healthcare Fraud Investigation and Prosecution?

While there is not a rigid and formal structure for a healthcare fraud investigation and each investigation takes a different shape, there are some predictable aspects of a healthcare fraud investigation.

Step 1: Identification

Investigators receive a tip from a whistleblower, insurance company, or results of a Medicare or Medicaid audit that inform them that healthcare fraud may have been committed. Often, the HHS learns of potentially fraudulent activity by using its own data analytics software contracted by a company called Palantir to determine if an entity has committed healthcare fraud.

Healthcare fraud investigators will review data and look for aberrant behavior in the number or type of codes billed relative to the patient populations, location, or taxonomy of the provider, to determine whether fraud has been committed.

Step 2: Preliminary Investigation

Investigators will look at data readily available to look for evidence of fraud. This may include public information about the practice or target; prior audits provided by Medicare and Medicaid; and Medicare billing data (that is publicly available).

Investigators will analyze this data against open source data to determine if there is evidence of fraud. For example, investigators may cross-reference Medicare billing data with death records to determine if the practice has billed for treatment to deceased patients (a common type of fraud).

Step 3: Boots on the Ground

Once the government has sufficient data to believe healthcare fraud has been committed, investigators begin conducting interviews with patients, former staff members, and other providers in the local area. They will also surveil the target defendants to determine their patterns and the probable location of evidence.

Typically, investigators pull patients by using Prescription Drug Monitoring Programs (PDMP) databases and cross-reference it with criminal history in order to question those patients with prior law enforcement experience.

Step 4: Search and Seizure

When the investigation is complete, the agents will send the case to a prosecutor for a review and request that the prosecutor obtain permission from a federal judge to search your home. The lead agent will draft out an affidavit outlining the investigation and requesting a search warrant for the practice and often the home of anyone alleged to be engaged in fraud.

Federal agents can get a warrant when there is probable cause (a very low standard) that a particular piece of evidence or contraband is in a particular place. This includes all electronic evidence that may have been used to perpetrate the alleged crime.

Agents conducting a healthcare fraud search warrant generally arrive during early hours of the morning and typically like to raid a practice as patients are showing up in order to interview patients. They will swarm the facility with vehicles from a number of different agencies and begin searching the practice or home and removing items they deem “evidence.”

Providers, patients, and employees who are on site do not need to remain; typically, defense counsel advise that everyone other than the records custodian leave the location. Agents cannot force people to be interrogated, and all employees and patients retain their Fifth Amendment right to remain silent.

(Note: Occasionally, where there is enough evidence to indict before executing a search warrant, an indictment will be unsealed simultaneously with the execution of a search warrant.)

If you are the subject of a search warrant by federal and state authorities, you should contact CLG today. We can give you advice on the spot that will minimize the damage of a search warrant.

Step 5: Prosecution Referral

Prosecutors and investigators will then review evidence and determine how strong the case is; whether any other leads must be followed before indictment; and if a grand jury should be convened. If the U.S. Attorney’s Office believes that a grand jury should be convened in order to indict for healthcare fraud, the case will be presented at the next grand jury.

Step 6: Grand Jury Proceedings

Grand juries are composed of 16 to 23 members. Grand juries are selected randomly from the population of a U.S. District. During a grand jury proceeding, a prosecutor will present evidence against the “target” of a grand jury (either a person and/or corporation). The grand jury will hear that evidence and vote either to indict or to return a “no bill.”

If at least 12 members vote to indict, then the case will be indicted and is then in the jurisdiction of the U.S. District Court for proceedings before federal judge. If fewer than 12 vote to indict, the case will be returned for investigation.

There is no limit to the number of times a prosecutor can go before a grand jury. Grand jury proceedings are generally secret and are only known to the prosecutor, the witness, and the members of the grand jury. Witnesses whose testimony is sought before a grand jury receive a document called a grand jury subpoena.

Step 7: Arraignment

If the grand jury indicts, the defendants on the indictment must be arraigned. This is the first appearance before a federal judge (usually a magistrate).

During arraignment, the judge ensures that two things are accomplished: (1) the defendant understands the charges, and (2) the defendant enters a plea.

All defendants at arraignment should enter a plea of not guilty at arraignment. Entering a plea of not guilty doesn’t mean you are swearing under oath that you didn’t commit the crime; rather, it’s the process of requesting that the judge set the case for trial so that the prosecution has to go through the burden of proving the case beyond a reasonable doubt.

In addition to the arraignment, a bond hearing will be held that same day. During this hearing, the court will determine if the defendant is released on bond. Most U.S. citizens who are alleged to have committed nonviolent offenses will received bond. However, there are quite a few exceptions to this general rule, and your attorney must be thoroughly prepared for a “detention hearing.”

You are at risk for not being released if:

    • You are indicted for a drug offense, as these carry a presumption of detention.
    • You have significant foreign contacts.
    • You have overseas assets.
    • You have a criminal history.
    • You have attempted to flee or missed a court appearance.
    • Your offense is coupled with one of violence.
    • There is evidence that you may tamper with evidence or threaten witnesses.

If any of the above factors apply to you, it is important that your counsel prepare an aggressive defense to the government’s detention request. Your attorney must be prepared to rebut the government’s evidence by presenting witnesses and documents in support of non-detention, designed to show that the defendant is not a danger to the community and not a risk of flight.

Often at arraignment, the government will attempt to restrict our client’s ability to prescribe controlled substances and to prevent our client from billing Medicare or Medicaid. Your attorney should fight this vigorously, because the ability to practice is vital to surviving through the lengthy battle that lays ahead for most accused practitioners.

Step 8 Pre-Trial Proceedings

During the next six to 18 months (generally), the case will proceed to trial.

When a healthcare professional is indicted for healthcare fraud, the Government has likely completed a thorough investigation.

Dedicated Medicaid fraud lawyers, Medicare fraud attorneys, and general healthcare fraud lawyers know that a great defense to healthcare fraud requires early intervention at the earliest possible stage. If an indictment has not been issued, a thorough investigation and compliance plan may remedy the issue before indictment. If an indictment has been issued, counsel must work quickly to analyze insurance claims, patient records, witness statements, and the government investigation.

We defend healthcare fraud charges by first reviewing the medicine in order to make the case that the claim was properly billed or, at the very least, not billed with the intent to defraud. Such a defense requires expert testimony from a certified biller and a health professional of the same profession to testify that the medical decision-making was not fraudulent. If the argument cannot be made that the medical decision-making is defensible, we review the Medicare bills to argue that the amount of the fraud (called the loss amount) was so low, it is not evidence of a scheme.

If a trial is necessary, it is imperative that expert testimony is presented to show that the claims were not fraudulent. It is also imperative that certain motions and objections are made that restrict the governments evidence in order to improve your chances of a successful outcome.

What Are the Penalties for Healthcare Fraud?

What Are the Penalties for Healthcare Fraud?

The penalties for healthcare fraud can be criminal, civil, and administrative. General criminal defense attorneys are only aware of the criminal penalties and may miss strategies that limit or eliminate the civil and administrative penalties. A plea of guilty to a felony charge of healthcare fraud or Medicare fraud should not be based solely on the potential jail time. 

The potential consequences of a conviction of healthcare fraud are:

    • Up to 10 years in prison
    • Mandatory exclusion from billing Medicare and Medicaid for between five years to life
    • Loss of professional license (medical license, pharmacy license, nursing license)
    • Forfeiture of all assets related to the alleged offense
    • Fines of up to $250,000 per offense
    • Restitution
    • Job loss
    • Loss of board certification status

How Are Healthcare Fraud Sentences Determined?

How Are Healthcare Fraud Sentences Determined?

Federal sentences are determined using the Federal Sentencing Guidelines.

If someone is convicted of healthcare fraud, the sentence is almost exclusively determined by the fraud loss amount to the entity billed, generally the value of claims billed. As a result of the Affordable Care Act, the number of claims billed to a healthcare program is considered prima facie evidence of the loss amount.

In the event of conviction and in order to achieve a lower sentence, it is imperative that defense counsel challenge the notion that the number of claims billed is the amount of the loss to the government. Every healthcare provider knows that Medicare, Medicaid, and private insurance companies do not actually pay the amount billed; usually, it is some lesser amount.

Also, the best healthcare fraud defense lawyer will know other strategies useful for determining a lower loss amount, such as claim sampling and extrapolation. Under no circumstances should someone facing healthcare fraud charges accept the government’s recitation of the loss amount: the government’s loss number is generally inflated and created using poor methodology.

Now suppose you have already been convicted of a federal crime such as healthcare fraud, and the judge decides to make an example of you and hands you a hefty sentence. Luckily, the United States Sentencing Commission’s has adopted Amendment 821, a landmark shift in federal sentencing guidelines which enables those who have already been sentenced, and those still fighting but know they will likely be sentenced to lower their sentence time given the right circumstances.

Why Should I Choose a Healthcare Fraud Defense Lawyer Over General Criminal Defense Attorney?

Why Should I Choose a Healthcare Fraud Defense Lawyer Over General Criminal Defense Attorney?​

Healthcare fraud defense is much like tax law: it’s so highly specific, only practitioners who regularly work in this field are experienced enough to litigate. And medical professionals who choose an all-purposed lawyer to handle their healthcare fraud case find this out the hard way.

Many clients who consult our healthcare lawyers for a second opinion had been told by their inexperienced attorney — who may be just a general criminal law practitioner — that they should accept a plea because they are guilty, when they are, in fact, not guilty at all. This is because many believe that simple failure to conform to Medicare and Medicaid regulations constitutes fraud. It does not. 

But we at Chapman Law Group know their playbook and how to defend against it; in fact, some of our health care fraud defense lawyers are former federal prosecutors, so we know how the government thinks when it comes to healthcare fraud litigation.

Our Healthcare Fraud Defense Attorneys

Our Healthcare Fraud Defense Attorneys

Chapman Law Group: We Are Your National Partners in Healthcare Fraud Defense

Chapman Law Group: We Are Your National Partners in Healthcare Fraud Defense

If you are facing healthcare fraud charges or believe you may be under investigation for Medicare fraud, Medicaid fraud, TriCare fraud, or insurance fraud, you need experienced legal representation. At Chapman Law Group we have a dedicated team of national healthcare fraud defense attorneys who have a track record of acquittals and dismissals on behalf of a broad range of healthcare practitioners and entities.

With Chapman Law Group, you get attorneys with:

    • Results: Unlike most firms we have a proven track record of winning healthcare fraud cases against the Government.
    • Dedication: We are not generalists. We are specialists dedicated solely to defending healthcare fraud. 
    • Education: Five of our attorneys have advanced law degrees (LL.M.) in Healthcare Law. We have a certified medical biller on staff and a network of medical experts, statisticians, and healthcare fraud investigators ready to get to work for you.
    • Strategy: We don’t sit on cases. From the initiation of representation, we develop a plan to resolve your federal healthcare fraud issue, aggressively investigate it, and prepare to take on the federal government.

We represent licensed medical professionals across the U.S. with white collar criminal defense in the healthcare sector.

Our national health care-based criminal law offices are located in Detroit (Troy), Michigan; Miami and Sarasota, Florida; and Los Angeles/Southern California. 

Contact us today and let us put our healthcare fraud and healthcare-based criminal expertise to work for you.

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