Is Medicare Fraud a Felony?

Individuals or entities who commit Medicare fraud can be convicted of a felony. But, it is not always the case; some are just exposed to penalties, fines, exclusion, and so on.

Felony is a criminal offense punishable by more than one year in prison. Medicare is a federal program, and defrauding the government and its program is illegal and can lead to criminal charges. So by nature, those who commit Medicare fraud are exposed to criminal charges and they in turn can be convicted of a felony.

Anyone who commits Medicare fraud is exposed to criminal or civil liability or both. With that in mind, we provided some information that would help you further understand why some are held criminally liable, and some just pay fines.

Difference between civil and criminal liability

Understanding the difference between civil and criminal liability would help you further understand why those who commit Medicare fraud can be convicted of a felony.

Civil Liability

Individuals or entities facing civil liability are subjected to fines, recoupments, and other forms of financial penalties. Instead of facing criminal charges and imprisonment, some usually enter a civil settlement agreement with the federal government. These settlement agreements can include:

(1) treble damages or triple the amount of lost;

(2) $10,781.40 and $21,562.80 fines per claim; and

(3) exclusion from the Medicare Program

Despite not having to go to prison, those who commit fraud are then subjected to pay a huge amount to the government. To further illustrate the severity of Medicare fraud for civil charges, listed below are some of the examples from the Office of Inspector General website:

            August 19, 2020; U.S. Attorney’s Office, Eastern District of New York

Metropolitan Jewish Health System Hospice and Palliative Care (“MJHS Hospice”), a New York nonprofit hospice provider, has agreed to pay the United States $4,850,000 to resolve civil allegations that it billed Medicare and Medicaid for services rendered to hospice patients at heightened levels of care for which the patients did not qualify, in violation of the False Claims Act, and has agreed to pay the State of New York $375,000.

August 21, 2020; U.S. Attorney’s Office, Eastern District of New York

Ghanshyam Bhambhani, a former Queens cardiologist, will pay a total of $2 million to settle civil claims that he paid kickbacks to other physicians for referrals of patients insured by Medicare, Medicaid, and the Federal Employees’ Health Benefits Program. Under the terms of the settlement, Bhambhani will pay the United States $1,370,294.50. In addition, he will pay the State of New York $629,705.50.

From the examples cited above, penalties and fines for Medicare fraud can amount to millions of dollars. Having that in mind, you should always ensure that the billing system and services you provide are always in order and in line with the government’s mandate.

Criminal liability

Individuals or entities facing criminal liability can be convicted of a felony or misdemeanor. At the same time, they can also face civil liability and be required to pay hefty fines. 

Felony vs. Misdemeanor

According to the United States code, felonies are offenses punishable by more than one year in prison while misdemeanor carry sentences of one year or less. Felonies and misdemeanors are both criminal offenses punishable, but not limited, by imprisonment. It is important to understand the differences between the two because sanctions for both charges are unlike the other.

The sentencing classification for a felony or a misdemeanor is stated below:

(1) life imprisonment, or if the maximum penalty is death, as a Class A felony;

(2) twenty-five years or more, as a Class B felony;

(3) less than twenty-five years but ten or more years, as a Class C felony;

(4) less than ten years but five or more years, as a Class D felony;

(5) less than five years but more than one year, as a Class E felony;

(6) one year or less but more than six months, as a Class A misdemeanor;

(7) six months or less but more than thirty days, as a Class B misdemeanor;

(8) thirty days or less but more than five days, as a Class C misdemeanor; or

(9) five days or less, or if no imprisonment is authorized, as an infraction.

Aside from being sentenced to prison, individuals or entities who commit fraud have to pay a huge amount of money to the government as well. To further illustrate the severity of facing criminal liability, listed below are some of the examples from the Department of Justice website:        

September 2, 2020; Department of Justice

Three former caregivers in Fulton, Missouri, have been sentenced for their roles in the death of a disabled resident at Second Chance Homes, an organization that provided housing and care for developmentally disabled persons through a Missouri Department of Mental Health initiative.

July 24, 2020; Department of Justice

Indivior Solutions pleaded guilty to one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone.

Aside from the examples above, the Department of Justice has recorded last month its largest health care fraud enforcement action that amounted to billions. The government has been taking aggressive interventions and fighting Medicare fraud ever since. However, despite all of these, some are still oblivious and unaware that they are committing fraud, and some are just simply opportunistic in nature that they still choose to defraud the government and its program.

Wobbler cases

In some states like California, Medicare fraud can be a wobbler.

A wobbler is a criminal offense that can be charged as either a misdemeanor or a felony by the prosecutor. However, the judge still has a final say on the case. For instance, even if the prosecutor charges you with a felony, the judge can still reduce it to a misdemeanor at the sentencing.

If you are convicted of felony health care fraud, you can petition the court to reduce it to a misdemeanor. Reducing it to a misdemeanor would then restore your right to run the office, second amendment right, right to serve in the military, as well as the right to receive public benefits.

However, it is still worth noting that reducing a felony to a misdemeanor is not entirely easy. It is still best to consult with an experienced criminal defense attorney in your state. Since they know the ins and outs of criminal law, they can help you further explore all legal options that would work to your benefit.

How would I know if I am criminally liable?

Conviction of a felony is only applicable to criminal offenses. In this case, individuals or entities who commit criminal offenses and violate the criminal statutes below are exposed to criminal liability.

False, fictitious, or fraudulent claims (Criminal False Claims Act 18 USC Section 287)

Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent.

Sanctions: Fines and imprisonment of not more than five years

Health care fraud (Criminal Health Care Fraud Statute 18 USC Section 1347)

Whoever knowingly and willfully executes or attempts to execute, a scheme to defraud any health care benefit program; or to obtain, under false pretense, any health care benefit program in connection with the delivery of or payment for any health care benefits.

Sanctions: Fines or, depending on the violation results (e.g. injury, death), an imprisonment that can last for life, or both

Criminal penalties for acts involving Federal health care programs  (Anti-Kickback Statute 42 USC Section 1320a-7b(b))

Whoever knowingly and willfully commits false representation, illegal enumerations, violation of assignment terms, and illegal patient admittance and retention.

Sanctions: Fines that reach up to $25,000 or imprisonment of up to ten years (depending on the act committed), or both

The authorities that usually investigate and determine the sanctions for fraud are usually the Office of Inspector General, Department for Health and Human Services, Department of Justice, Federal Bureau of Investigation, Medicaid Fraud Control Units, General Services Administration, Centers for Medicare and Medicaid Services, and the State Medicaid Agencies in cooperation with the Health Care Fraud Prevention and Enforcement Action Team.

What are the steps to take if you think you are committing a violation?

medical fraud

Medicare fraud does not only mean violating the statutes cited above. It can take many forms, from unintentional billing mistakes to basic human error. The law heavily safeguards the health and wealth of the public, hence even legitimate health care providers can run the risk of committing Medicare Fraud.

With that in mind, it is important to always monitor your billing practices and assess the quality of services you provide. If you suspect any potential violations, then you should

(1) pause all problematic services or billings;

(2) distance yourself from the suspicious relationship; and

(3) seek help and get advice from an experienced legal counsel

Can I self-report to the authorities?

Fortunately, there are protocols that enable you to self-disclose in order to avoid draconian penalties. It is never a good option to turn a blind eye, especially if you felt that trouble was already brewing.

The Office of Inspector General Self Disclosure Protocol

Health care providers, Health and Human Services contractors, and grant recipients can voluntarily self-disclose evidence of potential fraud.  However, it is worth noting that the SDP is not applicable in all situations. It is limited to situations where Civil Monetary Penalties are authorized. Generally, it is used in situations such as overpayments becoming False Claims under the 60-day repayment rule, potential violations of the Anti-kickback Statute, and so on.

CMS Self-Referral Disclosure Protocol

It enables health care suppliers and providers to self-disclose potential violations of the Stark Law.

Stark Law is a federal law that prohibits physicians from referring patients for health services paid for by Medicare to any entity in which they have a “financial relationship.”

Even though the self-disclosure protocol cited above might seem compelling, it is still a difficult choice to make.

Your potential violations should be in sync with your decision on whether to utilize the self-disclosure protocol above. That is why, it is important to consult with a skilled legal counsel first.

Do I need a Medicare Fraud Attorney?

Is medical fraud a felony?

If you think you committed a potential violation, then you definitely need a Medicare Fraud Attorney. Hiring a seasoned and experienced Medicare Fraud Attorney would help you determine the corresponding penalties for your violation.  

Since settlement and litigation cases can be lengthy and costly, having a skilled and well-connected attorney is an asset. They can save you from paying hefty fines and even reduce your sentences. A Medicare Fraud attorney can negotiate on your behalf and create a strategy that would help you win in court.

By having an attorney to help you and guide you along the tedious legal process, you are essentially increasing your chances of gaining favorable results. A Medicare Fraud attorney would speed up and make the process a lot easier to handle. Since they are knowledgeable and experienced in this field, they are able to provide you with better solutions on how to correct your violations.

Key Takeaways

Those who commit Medicare Fraud can be imprisoned for more than 10 years and they can also pay fines that can skyrocket to billions of dollars. Hence, sweeping a potential violation under the rug and hoping it would never be discovered is just wide of the mark. It would not make the problems go away, but would just make the problems even worse. Not reporting a potential fraud, especially if you are already aware of it, can lead to harsher sentences and penalties.

Here is a recap to our article; Is Medicare Fraud a Felony?

Table of Contents

Aside from the chances of being convicted of a felony and paying hefty fines, you should also think of the consequences it has on public health care. 

The Medicare program plays an important role in the everyday lives of Americans, hence defrauding the government would have severe effects on the quality of public healthcare. The laws and statutes cited above are not just meant to deter Medicare fraud and make one accountable for defrauding the government, it also safeguards and ensures that the government is able to provide high-quality health services for everyone.

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