El Paso Healthcare Fraud Defense

Salesperson and client going over a health insurance policy.

Although the U.S. healthcare system is strictly regulated, healthcare fraud and abuse is prevalent in the state of Texas. Healthcare fraud may result in state and federal charges and a conviction can result in serious penalties, including imprisonment, fines, and restitution. The best way to defend yourself against healthcare fraud charges is to consult an experienced criminal defense attorney.

Benjamin Law Firm, located in El Paso, has extensive experience defending clients against white-collar crimes, including healthcare fraud. If you have been charged with healthcare fraud, you should not go up against state and federal authorities on your own. When you become our client, we will carefully weigh the strength of the evidence against you, choose the best line of defense, and help you fight the charges. Above all, we are committed to protecting your rights, your freedom, and your future. 

What is healthcare fraud?

Healthcare fraud is a white-collar crime involving the submission of false or misleading information to a health insurer, Medicare, or Medicaid to recover payment for healthcare services. Healthcare fraud is not a victimless crime since it results in significant financial losses for health insurance carriers that subsequently pass those losses on to consumers in the form of higher insurance premiums.

Healthcare fraud can be committed by individuals, medical providers, and insurance companies with either the goal of obtaining medical care without valid insurance or to profit financially. Different types of healthcare fraud include:

Healthcare Fraud Committed by Medical Providers

  • Billing for services and procedures that were not actually performed 
  • Submitting duplicate claims for the same service 
  • Billing for a different, more expensive service than what was provided (“upcoding”)
  • Falsifying a diagnosis to justify procedures not covered or not medically necessary
  • Billing each step of a procedure as a separate procedure (“unbundling”)
  • Providing a service not covered by insurance, then billing for a covered service

Fraud Committed by Insurance Companies

  • Denying payment on services, procedures, or prescriptions that should be covered
  • Selling health insurance without a license
  • Collecting premiums for policies while not intending to pay claims

Healthcare Fraud Committed by Individuals

  • Providing false information in order to receive medical coverage
  • Staging an accident to obtain medical care, prescription medication, medical reimbursement
  • Using another person’s health insurance information to obtain medical care
  • Exaggerating the value of a claim
  • Visiting numerous physicians to obtain multiple prescriptions (prescription fraud)
  • Failing to remove an ineligible individual from a policy

Regardless of the nature of the offense, it is important to distinguish between fraud and bona fide mistakes. A mistake can occur when an individual, healthcare provider or insurance carrier inadvertently omits information, generates an inaccurate bill, or makes a payment error. 

By contrast, to be considered healthcare fraud, the act must have involved intent. If a patient receives a bill for a service that was not provided, for example, that could have resulted from a billing error. On the other hand, a medical provider who knowingly bills an insurer for a service that was not rendered may have committed healthcare fraud. This is an important point because the prosecution must be able to prove the defendant’s intent beyond a reasonable doubt to gain a conviction. 

Federal Healthcare Fraud Charges

Given that Medicare is a federal program, and Medicaid is a joint state/federal program, healthcare fraud be charged at both the state and federal levels. At the federal level, there are a number of applicable laws governing healthcare fraud, including:

  • False Claims Act — This law protects the government from being overcharged for goods or services. Under the qui tam provisions of the False Claims Act, individuals and entities with evidence of fraud against federal programs such as Medicare are allowed to sue the wrongdoer on behalf of the federal government. A relator or whistleblower who provides actionable evidence of healthcare fraud may be entitled to a portion of any funds that are recovered.
  • Anti-Kickback Statute — This criminal and civil statute prohibits the exchange of anything of value (a “kickback”) for referring patients to Medicare or other federal healthcare programs. Types of unlawful kickbacks include receiving payment for referrals, free or low-rent office space, excessive compensation for medical directorships, and waiving copayments. Criminal penalties include up to 5 years in prison, and fines up to $25,000. The government can also pursue civil penalties of up to $50,000 per violation plus three times the amount of any overpayment.
  • Stark Law (Physician Self-Referral) — This law prohibits doctors from referring Medicare patients for certain designated health services to any entity in which they have a financial relationship, which is broadly defined to include any direct or indirect compensation arrangement as well as financial interests held by the doctor’s immediate family members. Unlike the Anti-Kickback Statute, the Stark Law is only a civil statute that imposes penalties of $15,000 for each service based on a prohibited referral plus three times the amount of the overpayment. 
  • Criminal Health Care Fraud Statute – This federal statute prohibits any person from knowingly and intentionally defrauding any healthcare benefit program or using false statements to obtain funds held by a federal healthcare program.

Federal Healthcare Fraud Penalties

Both criminal and civil penalties apply to federal healthcare fraud. These penalties include:

  • Prison — Healthcare fraud can lead to lengthy prison sentences. For example, submitting a false Medicare or Medicaid claim can result in a 5-year prison sentence for each offense, while a violation of the Criminal Healthcare Fraud Statute is punishable by up to 10 years for each offense. If the violation causes bodily injury, such as when a medical provider performs an unneeded medical procedure, the penalty can be a prison term of up to 20 years. If the violation causes a patient’s death, the provider can be sentenced to life in prison.
  • Fines — A conviction for healthcare fraud will also result in significant fines. An individual who makes a false statement in a Medicare or Medicaid claim, for example, may be fined up to $250,000 for each offense, while organizations making false claims face up to $500,000 in fines for each offense.
  • Restitution — Defendants can be ordered to pay back the amount of money they improperly obtained as a result of their fraudulent acts. A doctor who improperly billed and received payment from an insurance company for services not performed may be required to pay back the insurance company. Restitution is in addition to a fine paid to the government.
  • Exclusion — A healthcare provider who has been convicted of Medicare fraud may be excluded from federal healthcare programs, and failing to comply with the terms of exclusion can result in additional fines. 

Texas Laws on Healthcare Fraud

In Texas, healthcare fraud is vigorously prosecuted under a number of applicable state laws, including:

  • Texas Patient Solicitation Act — Texas’ version of the federal Anti-Kickback Statute prohibits physicians from directly or directly paying someone remuneration for patient referrals. Violations of this state law can be charged as a Class A misdemeanor or a felony of the third degree, depending on the circumstances.
  • Prohibition on Corporate Practice of Medicine – Under this law, physicians are prohibited from being employed by individuals who are not licensed to practice medicine, or by business entities run by individuals who do not have medical licenses. Violations can result in significant penalties, including fines and medical license disciplinary actions.
  • Texas False Claims Act – Texas’ version of the False Claims Act (FCA) holds individuals and entities liable for (1) submitting false or fraudulent claims for healthcare services paid by the government (Medicaid) or (2) submitting Medicaid claims for services or products rendered by an unlicensed provider, or one which has not been approved by a healthcare practitioner. Enhanced civil penalties apply if the misconduct results in harm to the elderly, disabled individuals, or minors.
  • Texas Medicaid Fraud Prevention Act — This law establishes a cause of action for submitting false claims to the Medicaid program. Violations can result in civil penalties ranging from $5,500 to $11,000 per violation which can be elevated if the unlawful conduct causes harm to the elderly, disabled or minors. 
  • Improper Billing Practices — The Texas Medical Board is authorized to discipline practitioners for improper billing practices and conduct intended to deceive or defraud the public, such as knowingly submitting improper or fraudulent claims to patients or third-party payers. Violations can result in significant penalties and medical license suspension.

Criminal Medicaid Fraud in Texas

Medicaid is a joint state-federal medical program designed to help low-income individuals pay for healthcare. The program is administered by the Texas Health and Human Services Commission. There is a wide range of Medicaid providers, such as physicians, dentists, podiatrists, licensed counselors, hospitals, adult daycare centers, nursing homes, clinics, pharmacies, case management centers, and medical equipment providers. Common examples of Medicaid fraud include:

  • Submitting bills to Texas Health and Human Services Commission for procedures, lab tests, X-rays, and other services that the Medicaid provider didn’t perform 
  • Falsifying a Medicaid recipient’s diagnosis to support unneeded tests and/or services
  • Billing for brand-name prescription medicines when a generic version was provided
  • Billing patients multiple times for services Medicaid has already paid
  • Submitting bills for deceased or ineligible patients or for those transferred to another provider’s care

In Texas, the Medicaid Fraud Control Unit (MFCU), a division of the Attorney General’s office, investigates criminal Medicaid fraud by healthcare providers as well as nursing home abuse and neglect in Medicaid-licensed healthcare facilities. The MFCU often prosecutes Medicaid fraud cases in conjunction with other state agencies, including The Texas Department of Insurance and the Texas Medical Board. 

Moreover, because of the overlap of state and federal healthcare laws, state and federal authorities typically collaborate on healthcare fraud investigations and prosecutions. In fact, a large percentage of alleged healthcare fraud violations involve Medicaid and Medicare (a federal health and medical program). An administrative audit by Medicare or Medicaid may prompt additional inquiries and even criminal prosecution of the provider.

Whether you are being audited or investigated, it is crucial to act quickly to protect your rights. At Benjamin Law Firm, we have extensive experience representing clients before government agencies as well as in state and federal court. Regardless of the forum, we will provide you with informed representation and objective insights so that you can make the best decisions about your future.

Penalties for Texas Healthcare Fraud

In Texas, healthcare fraud can range from a misdemeanor to a felony offense. Generally, the penalties are based on the financial impact of the crime:

  • If the value of the claim is less than $100, the charge is a Class C Misdemeanor, which carries a maximum $500 fine.
  • If the value of the claim is greater than $100 but less than $2,500, the charge can be elevated to a Class B or Class A misdemeanor
  • If the value of the claim is greater than $2,500 but less than $30,000, healthcare fraud is considered a state jail felony, punishable by 180 days to 2 years in jail and a fine of up to $10,000

Fraudulent claims that exceed these amounts may result in third-degree, second-degree, or first-degree felony punishments and penalties. If the claim was greater than $300,000, or the illegal acts resulted in harm or death to another individual, for example, the offense is charged as a first-degree felony, punishable by 5 to 99 years in prison and maximum $10,000 fines. In addition to significant fines and criminal sanctions, a medical provider faces the loss of his or her medical license. 

Healthcare Fraud-Related Charges

Insurance companies and law enforcement typically work with investigators on healthcare fraud cases. Fraud investigations typically involve conducting surveillance and asset searches to collect evidence and information about the allegations. If the investigator determines that fraud has been committed, the case is referred to the appropriate state or federal law enforcement agency for prosecution. In addition to healthcare fraud, however, other criminal charges may apply, including:

  • Attempt/Conspiracy to Commit Fraud — An individual who attempts or conspires to commit healthcare fraud is subject to the same penalties for the prescribed offense
  • Theft of Government Services — Billing for services performed by a provider, vendor, or entity excluded from the Medicare program
  • Money Laundering — Transferring funds derived from fraudulent activities into legitimate resources while concealing the identity, source, and destination of those funds or conducting or intending to conduct financial transactions with the proceeds of that activity
  • Mail fraud/wire fraud — Using the U.S. postal service or wire-based communications (e.g. telephone, text, internet) to commit fraud

Given the penalties for healthcare fraud and the potential of facing additional charges, it is crucial to have the first-rate legal representation Benjamin Law Firm provides. As a former prosecutor, founding attorney Brock Benjamin understands the investigative tactics the government employs as well as the courtroom strategies prosecutors rely on to gain convictions in healthcare fraud cases. He is also Board Certified in Criminal Law by the Texas Board of Legal Specialization, which is a testament to his expertise in defending white-collar crimes. 

When you work with us, you will have confidence knowing that our legal team is on your side. We have a well-earned reputation for leveling the playing field against state and federal prosecutors and protecting our client’s rights. Our attorneys will always presume that you are innocent, and work to achieve the best possible outcome for your case.

Potential Defenses Against Healthcare Fraud

Although state and federal prosecutors can make use of vast financial resources and broad surveillance powers, the government must be able to show that you had the intent to defraud to gain a conviction. At Benjamin Law Firm, we will leverage our skills and resources to challenge the government’s case and work to have the charges dismissed. 

We will look to exploit errors and weaknesses in the prosecution’s case, and argue that there is insufficient evidence of healthcare fraud. Our attorneys will also determine whether any of your civil rights were violated by law enforcement through the use of improper surveillance tactics or invalid search warrants and move to suppress any evidence that was obtained improperly. 

One of the strongest defenses against healthcare fraud charges is that the act was actually a mistake — you inadvertently omitted information, billed improperly or made a payment error. Another potential defense is to demonstrate that you did not know, or were not capable of knowing, that you had engaged in healthcare fraud. 

Contact Our Experienced Healthcare Fraud Attorneys

Benjamin Law Firm has a proven track record of successfully defending clients against healthcare fraud charges in both state and federal court. Well-versed in the state and federal laws governing healthcare fraud, we have successfully defended a wide range of clients against a variety of healthcare fraud allegations, such as:

  • Healthcare providers billing insurers, Medicare and Medicaid for services not provided
  • Insurers, pharmacists, and therapists for submitting false claims for reimbursement
  • Consumers charged with providing false or misleading information on government program applications

The penalties for a healthcare fraud conviction can be severe, especially for medical providers who are subject to license forfeiture if convicted. While being charged with healthcare fraud can be overwhelming, you can rest assured we will fight to protect your freedom and your future. 

Although we are committed to winning an acquittal, we will be honest with you about your prospects at trial. Depending on the circumstances, we may seek to have the charges and penalties reduced. Above all, we will work strategically to defend you from healthcare fraud charges and make sure your rights are protected. Please contact our office today to schedule a consultation.