Health care fraud arises when a health care provider attempts to defraud an insurance company in order to receive more profits than they actually provided services for. It may also be engaged in by patients who provide false or misleading information to health insurance companies to receive health care benefits.
As the U.S. is moving towards a health care system that is profit-based and funded by private insurance companies, it follows that clinics, hospitals, and doctors would want to make a profit as well. In this attempt to make a profit, some health care providers may commit fraud, even against public programs such as Medicare and Medicaid.
Health care providers who engage in fraudulent activities may face federal criminal charges and other criminal or civil legal consequences.
Who Might Commit Health Care Fraud?
Health care fraud can be committed by a range of individuals and organizations, including, but not limited to:
- Health care providers: Doctors, nurses, hospitals, clinics, and other health care professionals may participate in fraudulent billing techniques such as:
- Invoicing for services that were not performed;
- Duplicate billing;
- Upcoming services;
- Patients: Some individuals may use false information to get benefits or treatments they are not entitled to, such as using another individual’s insurance information;
- Companies: Health insurance companies, pharmaceutical companies, as well as other types of healthcare providers, may engage in deceptive activities. This includes misrepresenting the cost or availability of prescriptions or treatments.
Individuals who work for the government, especially those who work for Medicaid, Medicare, or other health care programs, may also engage in fraud for their personal benefit.
What Is Health Care Fraud Versus a Mistake?
Health care fraud is a deliberate misrepresentation or abuse of information in order to obtain money or benefits from a health care program. This crime is committed to deceive the system.
In contrast, an error in health care billing or reimbursement is referred to as a mistake. This mistake may occur because of a lack of knowledge or training, technical challenges, or a breakdown in communication.
A mistake is not deliberate and does not constitute fraud. Errors may still result in complications, such as:
- Overpayment;
- Refused claims;
- Being required to reimburse money to a health care program.
Health care patients and professionals should work together to ensure there is accuracy in the billing and payment systems in order to reduce the possibility of errors. In health care, it is important to differentiate between fraud and errors because fraud may have serious legal and financial ramifications.
Errors can often be remedied using education and more attention during the billing and payment process. If an individual has questions regarding these issues, they should consult with a health care fraud lawyer.
Is Health Care Fraud a Criminal Offense?
Yes, health care fraud is a federal criminal offense that is addressed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) that can result in severe penalties. Individuals who engage in health care fraud may face federal prison time for a white-collar offense.
If a defendant is found guilty of health care fraud, the penalties may include:
- Civil fines of up to $10,000 for each false claim;
- Repayment of false charges;
- Criminal charges;
- Criminal fines;
- Prison;
- Repayment of attorney fees to the plaintiff;
- Punitive damages;
- Asset forfeiture and seizure;
- Loss of the individual’s state medical license;
- Probation;
- Restitution; and
- Denial of insurance billing privileges.
What Are Some Common Types of Health Care Fraud?
As noted above, providers and patients may commit health care fraud. It may involve illegal conduct such as:
- Filing duplicate claims: An applicant may file a duplicate claim or a claim that is only slightly different in order to reap dual benefits;
- Kickback schemes: This occurs when the applicant is illegally rewarded for using or endorsing a particular type of medical treatment, drug, equipment, or service or for providing illegal referrals;
- Medical billing fraud: This may occur when a provider overcharges or files for excess services;
- Providing false information: Making false statements on a health care application or claim is generally considered a violation and can lead to both private and criminal consequences;
- Illegal resale: Selling medicines or equipment on the black medical market is very risky and can lead to legal consequences as well as injuries to innocent individuals;
- Billing for services not actually performed: When a medical provider bills for medical procedures not performed on a patient;
- Upcoding: Billing for more costly services than the one actually performed; and
- Prescription drug fraud: Prescribing medication without providing the patient with an in-person exam.
Violating health care fraud laws may have far-reaching consequences for both individuals and businesses and result in an individual being sued for health care fraud.
What Are the Defenses to Health Care Fraud Charges?
Health care fraud defenses that may be presented against health care fraud charges, including:
- No knowledge: Health care fraud generally must be intentional, and the defendant must have intended to deceive the other party in order to be found guilty;
- Coercion: It can sometimes be a defense if the person was coerced, or forced, to engage in fraud, for example, under threat of physical harm;
- Unclean hands: A plaintiff’s recovery may be barred if they have engaged in the same conduct, for example, if they also engaged in fraud;
- This is often a remedy in cases where the party is seeking equitable relief; and
- No intent: The medical provider or patient did not have intent to defraud the plaintiff or other party.
How Can Health Care Fraud Be Avoided?
There are several ways that health care fraud can be avoided by patients by taking the following steps:
- Protect their health care ID: An individual should protect their health insurance card and make sure that no one takes their identity or health care insurance card;
- These insurance cards can be used over the Internet to buy online prescription drugs or seek medical services without the individual’s consent;
- Report fraud: If an individual suspects that their medical provider is defrauding their health insurance or billing them for excessive charges or procedures that they never did, the individual should contact their health insurance company;
- Be informed: An individual should be informed of all the medical procedures that they receive from the medical provider and make sure they consented in writing to have the procedure done; and
- Read their policy and benefits statement: An individual should read the policy statement from their insurance company and make sure which treatments their insurance covers and if the charges made by the medical provider are accurate.
Do I Need a Lawyer?
If you believe you have been a victim of health care fraud, it is important to consult with an insurance lawyer. Your lawyer will advise you of the laws that may apply to your case and how to best pursue compensation for the harm you suffered.
If you have been accused of engaging in health care fraud, it is essential to consult with a criminal defense lawyer who can help defend you against the accusations. Health care fraud is a serious felony charge that may result in severe consequences, for example, fines, jail, and the suspension of your license.
