Medicare Fraud Defense Attorneys On Your Side

Medicare is a federal benefits program, established in 1965, that provides guaranteed health insurance to Americans 65 years or older; individuals under 65 who are permanently disabled; and individuals with end-stage renal disease (ESRD). Medicare is divided into four constituent parts (AD), which cover:

  • Inpatient care (part A)
  • Outpatient care (part B)
  • Private health insurance (part C)
  • Prescription drug coverage (part D)

Medicare Fraud Is One of the Most Common Types of Federal Fraud

Medicare fraud is one of the most common types of federal fraud prosecutions, and, since the passage of the Affordable Care Act in 2010, the federal government has devoted significant additional resources, manpower, and attention to combat Medicare waste, fraud, and abuse.

Relevant Criminal/Civil Statutes

The primary federal criminal statute that law enforcement and administrative agencies use to combat Medicare fraud is 18 USC Section 1347 (health care fraud).


Legal Definition


The federal statute reads: (a) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice— (1) to defraud any health care benefit program; or (2) to obtain, by means of false or illegal pretenses, portrayals, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program.


This federal fraud statute seeks to combat waste, fraud, and abuse within the Medicare program by targeting individuals who use fraudulent medical practices, schemes, or billing practices in order to obtain Medicare reimbursement.


  • Penalties if Convicted


Any individual found guilty under the statute will be subject to numerous fines/penalties, and they face up to 10 years in prison.


If their fraudulent actions lead to serious bodily injury of another, the convicted individual faces up to 20 years in prison. Individuals successfully convicted for health care fraud not only face significant criminal exposure for engaging in their fraudulent and/or abusive practices but can also be liable for multiple civil and administrative agency penalties.

Related Fraud Statutes

The other fraud statutes that prosecutors routinely use to prosecute suspected individuals include:


  • The Federal False Claims Act (“FCA”)
  • The Anti-Kickback Statute (“AKS”)
  • The Physician Self-Referral Law (“Stark Law”)
  • The Exclusion Statute
  • The Civil Monetary Penalties Law


These statutes seek to deter waste, fraud, and abuse by punishing individuals who make false claims to the government, pay monetary incentives/rewards for the referral of services or patients, and/or refer patients to facilities or centers where the referee (or their family) has a direct financial interest.


One of the main deterrent factors under the varying aforementioned fraud statutes is to significantly increase the amount of financial exposure that a convicted individual is subject to (damages recovery of up to 3 times the proven amount for each fraudulent claim).

Defenses and Government’s Burden

In order to best defend against charges of health care fraud, an individual will need to demonstrate that the treatment or diagnosis they conducted was “medically reasonable and necessary,” for the illness, injury, condition, or its symptoms and the procedures/practices that meet acceptable standards of care.


Agencies have initiated inquiries and investigations against medical providers through methods such as scrutinizing above-average billing requests, reviewing and following-up on submitted complaints and working with internal whistleblowers.


Federal authorities do not seek to second-guess medical professionals’ best judgment and individualized treatment plans, but rather prevent individuals from violating their obligations and patient’s best interests and using their patients as profit centers. The government has to prove all charges ‘beyond a reasonable doubt’ (the standard for a successful criminal conviction).


Enforcement and administrative agencies have mostly directed their time, resources, and efforts towards prosecuting individuals who engage in manifestly fraudulent services, like:

  • Billing for services not rendered
  • Falsifying or over-issuing prescription drugs (especially regarding opioid drugs)
  • Providing kickbacks
  • Committing bribery
  • Coding improperly

Fraudulent Practices Must Be Conducted “Knowingly” and “Willfully”

Additionally, the individual or business entity has to have engaged in fraudulent practices “knowingly” and “willfully.” The government may prove that a fraudulent statement was made “knowingly and willfully” by providing evidence that the defendant(s) acted deliberately and with the knowledge that their representation was false.

United States vs. Hopkins, 916 F.2d 207, 214 (5th Cir. 1990). This requires a high standard of proof for prosecutors, and will usually require the alleged party to have deliberately engaged in evidently fraudulent practices or schemes, such as:

  • Prescribing drugs to patients in significant quantities,
  • Falsifying medical records
  • Billing for services never performed,
  • Up-coding procedures
  • Unbundling services that are typically bundled
  • Compounding improper drug services,
  • Referring patients to medical centers where they have a financial interest

Medical facilities and doctors can usually insulate themselves from criminal and civil exposure by implementing best practices, controls, and regular audit procedures recommended by their state medical certification boards and societies.

Program Administration and Prosecuting Authorities

The federal agency that runs Medicare and Medicaid, the Centers for Medicare and Medicaid Services (“CMS”), has published multiple guidance documents regarding common forms of fraud and abuse within the Medicare program.

These abusive practices include:

  • Submitting false statements or misrepresentations to receive reimbursement,
  • Billing for medically unnecessary treatments,
  • Excessive charges,
  • Paying or offering referrals to patients or medical provider

The people perpetrating these crimes annually cost the federal government billions of dollars in unnecessary care, and multiple stakeholders and administrations have sought to root out fraud and abuse to reduce escalating federal and state health care expenditures.

Medicare Fraud Strike Force Teams

In 2007, the federal government devoted resources to set up nationwide Medicare Fraud Strike Force Teams. The teams use interagency resources to channel additional money, manpower, and tools to make stamping out Medicare fraud a high federal/state priority. The teams include officials from state and local law enforcement, the FBI, the Office of Inspector General, DOJ, and US Attorneys.


Nine (9) dedicated strike teams


There are currently (9) dedicated strike teams throughout the country, and, since 2007, the federal government has been able to obtain over $12.5 billion in reimbursement for fraudulent Medicare billing and has prosecuted thousands of individuals (nearly 2,000 successful criminal actions as of January 2018).

The federal government has strategically located the strike teams in  locations with the largest number of suspected offenders and the highest concentration of fraudulent activities, such as:

  • Miami, Tampa, Florida
  • Detroit, Michigan
  • Los Angeles, California
  • Dallas and Southern Texas
  • Brooklyn, New York
  • Southern Louisiana
  • and Chicago, Illinois

Strike force teams can access federal, state, and local resources to investigate criminal conduct. They comb through local/state/federal databases and records with ease. In 2016, according to the U.S. Government Accountability Office (GAO), 22% of Medicare fraud investigations were based on leads from the CMS and contractors analyzing Medicare payment and billing data.

This joint coordination among authorities allows the teams to quickly and thoroughly investigate complaints and scrutinize suspicious billing patterns before the fraudulent providers bilk the relevant health insurance programs out of substantial sums and harm patients who could be receiving unnecessary and wasteful care.

Criminal/Civil Exposure

The federal government has various civil and criminal enforcement powers and statutory authority to prevent medical providers and professionals from defrauding the nation’s single largest health insurance program. In 2017, Medicare spending totaled $708 billion, and the current budget represents roughly 15% of the total U.S. federal budget.

The huge budgetary outlays, numerous medical providers, and thousands of reimbursable services, products, prescription drugs, and treatment programs makes Medicare especially susceptible to widespread fraud and abuse.

Upon credible government allegations of criminal or civil misconduct, the individual, business, and/or medical practice should immediately seek out legal representation.


Criminal Fraud Accusations


Fraud accusations, while much rarer, are some of the most serious charges to threaten an individual’s livelihood and liberty interests. The criminal and civil liabilities for any violation of the relevant anti-fraud statutes are substantial.

If in violation of the health care fraud, kickback, or false claims statutes, the individual is subject to imprisonment, penalties/fines, and exclusion from participating in any federal health care program for a time. State authorities routinely “piggy-back” off of successful prosecutions conducted by federal authorities, as most state fraud statutes mirror those in the U.S. Code.


Criminal Forfeiture


Upon conviction and sentencing for health care fraud, the government has the added tool of using its powers under the criminal forfeiture statute, 18 USC Section 1347. This federal statute allows prosecutors to ask the court to order the individual to “forfeit property constituted or derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.”

The statute is intended to seize any assets that were gained as part of the criminal actions/operation and has the potential to expose any co-conspirators involved to the full amount gained as part of the fraudulent activities (i.e., jointly and severally liable).


Liability and Malpractice Issues


Medical professionals and facilities usually have retained counsel to handle a wide range of liability and malpractice issues, as these charges are commonly leveled against the medical industry.


Revoking Medical and/or Business Licenses


States have the added sanction of revoking the individual’s medical and/or business license, as licensing is usually handled at the state level. As most medical fraud cases pertain to patients covered by varying federal/state medical insurance programs (Medicare, Medicaid, TRICARE (veterans insurance) and private health insurance (managed care, HMO’s, etc.) the level of criminal/civil exposure can be extremely broad.


States Seeking to Recover Funds


States are also trying to ensure that they can recover any funds reimbursed for fraudulent services, and exclude suspected or convicted providers from their own state-managed health insurance programs (i.e., Medicaid.)

Therefore, if an individual was only responsible for 5% of the fraudulent billings in an entire medical group, but knew of other ongoing fraudulent activities, they could be potentially liable for 100% of the fraudulent activities charged.

Prominent National Cases


United States v. Willner, 795 F.3d 1297, 1324 (11th Cir. 2015)


Defendants (Willner, Ayala, Abreu, Morris) were successfully convicted of conspiring to commit health care fraud in the Southern District of Florida. They billed Medicare nearly $200 million in fraudulent billing through the American Therapeutic Corporation (ATC).

Over multiple years, they fraudulently billed the Medicare program for unnecessary medical procedures, recruited patients through kickbacks, provided psychiatric services to ineligible patients, and doctored medical records.

This was one of the most significant federal health care fraud prosecutions because of the amounts fraudulently billed; the sophistication of their illegal enterprise; and the number of business locations where the defendants conducted their operations (seven throughout multiple cities in South Florida).


United States vs. Melgen, No. 15-80049-CR, 2018 WL 1027149 (S.D. Fla. Feb. 21, 2018)


Defendant (Melgen) was convicted on 67 counts of health care fraud and related crimes in the Southern District of Florida. The jury found that Dr. Melgen treated 46 patients for procedures that were not medically reasonable and necessary and billed Medicare sometimes in excess of $100,000 for each patient.

He filed false claims to Medicare for the procedures and altered patient records to make their conditions appear more severe and acute than they were. In total, the court found that Dr. Melgen illegally billed Medicare over $73 million. Liable for the entire amount, the federal government used its civil forfeiture powers to attempt to acquire the judgment amount.

Additionally, Dr. Melgen was sentenced to a 17-year sentence. The case attracted national attention because of the defendant’s close relationship with a prominent U.S. senator from New Jersey, Robert Menendez, and because he was the highest paid Medicare doctor from 2008 to 2013.