Title 18 U.S.C. §1347 makes it a federal offense to commit Health Care Fraud. A prosecution focuses on whether the medical provider knowingly defrauded a health care benefit program by submitting claims for services or products that were never provided, or rendered services that were not medically necessary. Often times, federal and state agencies act jointly to ferret out fraudulently submitted claims by investigating and auditing doctors, ambulance companies, pharmacists, hospitals, clinics and other providers doing who are doing business with health care insurers. For purposes of the offense, a health care benefit program includes the government programs of Medicare (federal) and Medicaid (state).
Criminal prosecutions may be blossom from an administrative audit of the provider. For example, a Medicare auditor may look closely at a sample of patients and determine that their billed treatment was not medically necessary. An unsuccessful review could trigger further inquiry, an appeal process, suspension of the provider's Medicare or Medicaid number, reimbursement for loss, or even criminal prosecution.
A provider receiving an audit letter or who is indicted for Health Care Fraud should immediately consult with counsel adept at investigating and advising medical providers. A successful administrative review could remove the provider from the government's radar, thus it is critical to follow the administrative process.
If indicted and convicted for Health Care Fraud, a person confronts severe penalties under the Sentencing Guidelines because the loss associated with medical claims is often steep. Thus, prosecutors may seek tens of millions in damages, years in prison, and forfeiture of assets.