What is Healthcare Fraud?
Healthcare fraud is one of the most heavily prosecuted white-collar crimes in the federal system. It involves allegations that someone—whether a doctor, provider, billing manager, or business owner—knowingly billed for services that weren’t provided, were unnecessary, or were misrepresented to increase reimbursement.
Because healthcare programs are funded by taxpayer dollars, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) treat these cases as high priority. And the penalties can be severe.
1. The Core Statutes
Federal healthcare fraud is primarily charged under 18 U.S.C. § 1347, which makes it a crime to knowingly and willfully execute—or attempt to execute—a scheme to defraud any healthcare benefit program (like Medicare, Medicaid, or TRICARE).
Other related statutes often come into play:
18 U.S.C. § 1349 – Conspiracy to commit healthcare fraud;
42 U.S.C. § 1320a-7b(b) – The Anti-Kickback Statute;
42 U.S.C. § 1320a-7b(a) – False statements related to healthcare programs;
18 U.S.C. §§ 1956–1957 – Money-laundering statutes for movement of proceeds.
These charges often appear together in multi-count indictments that span multiple years and millions of dollars in alleged billings.
2. Common Allegations
Healthcare fraud can take many forms, including:
Billing for services not rendered or exaggerating the time or complexity of procedures;
Upcoding (billing at higher reimbursement rates than appropriate);
Unbundling (billing separately for services that should be combined under one code);
Kickbacks or referral payments for sending patients to a particular provider, lab, or pharmacy;
Unnecessary testing or prescriptions—especially in pain management, home health, or DME (durable medical equipment) settings;
False claims for telemedicine or COVID-related services.
3. How Healthcare Fraud Investigations Start
These cases rarely begin with a surprise indictment. They usually start with:
Data analysis by HHS-OIG flagging abnormal billing patterns;
Qui tam (whistleblower) complaints under the False Claims Act;
Audits or subpoenas for medical records and billing files; or
Search warrants or Civil Investigative Demands (CIDs) issued by the DOJ.
Once a pattern is identified, investigators often use Title 18 wire-fraud statutes to broaden their reach, sometimes adding conspiracy and money-laundering counts to increase exposure.
4. Why These Cases Are So Dangerous
Healthcare fraud prosecutions can lead to:
Up to 10 years in prison per count (20 years if patient injury results, life if death results);
Massive restitution and forfeiture orders;
Exclusion from federal healthcare programs;
Professional license revocation.
Sentencing under the U.S. Sentencing Guidelines is often driven by the alleged “loss amount,” which the government calculates. That number alone can double or triple sentencing exposure.
5. Building the Defense
Healthcare fraud cases are data-heavy and fact-intensive. Strong defenses focus on:
Intent (willfulness) – showing the defendant acted in good faith or relied on billing staff, compliance officers, or consultants;
Medical necessity and documentation – demonstrating services were legitimate and clinically justified;
Expert testimony – explaining billing practices and why discrepancies don’t equal fraud;
Loss-amount disputes – challenging the government’s use of “gross billings” to inflate sentencing exposure;
Privilege protection – preserving communications between providers, counsel, and consultants.
Because these investigations often involve both civil and criminal components, careful coordination is essential to avoid self-incrimination while resolving civil liability where possible.
When the Stakes Are High
Healthcare fraud allegations threaten everything—freedom, finances, and professional standing. But not every billing irregularity is a crime, and the government’s data models often overreach.
The right defense begins early: Mendoza Defense is here to help.