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Dr. Nick Oberheiden
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Aaron Wiley
Former State &
Federal Prosecutor

S. Amanda Marshall
Former U.S. Attorney

Lynette Byrd
Former Assistant
U.S. Attorney

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Overview of the Federal Health Care Fraud Statute – 18 U.S.C. 1347

Categories: Health Care Fraud

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Federal Health Care Fraud Defense Lawyers

The federal government has many different tools for prosecuting health care providers suspected of defrauding Medicare, Medicaid, Tricare and other health care benefit programs. From the Stark Law to the False Claims Act, laws that are both specific and non-specific to health care impose penalties for everything from misapplying the Medicare billing guidelines – to offering kickbacks and making so-called physician “self-referrals.”

But one of the government’s most-powerful tools in health care fraud investigations is 18 U.S.C. Section 1347, the federal health care fraud statute. This statute’s prohibitions are extraordinarily broad, and its penalties are extremely severe. It states:

(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 fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program,

in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.

(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.

5 Key Provisions in 18 U.S.C. 1347

In order to understand the implications of 18 U.S.C. Section 1347 for medical practitioners and health care providers, it is necessary to examine the statute’s key provisions in detail.

1. “Knowingly and Willfully Executes”

First, in order to be guilty of health care fraud under 18 U.S.C. Section 1347, it is necessary to “knowingly and willfully execute” a fraudulent scheme. While presenting proof of actual knowledge is one way that prosecutors can obtain a conviction, in some cases, constructive knowledge can be sufficient to establish criminal culpability for health care fraud as well. Under the federal constructive knowledge standard, if a person is aware of a high potential for illegal conduct and takes steps to purposely avoid learning about the illegal conduct, this can be enough to establish knowledge in some cases.

2. “Executes, or Attempts to Execute”

Under 18 U.S.C. Section 1347, an attempt to commit health care fraud is punishable to the same extent as the successful commission of fraud. An “attempt” requires intent to commit fraud as well as a “substantial step” toward commission of the crime. When investigations do not produce sufficient evidence to charge health care providers with fraud, federal prosecutors will still often pursue attempted fraud charges under 18 U.S.C. Section 1347 as well as attempt and conspiracy charges under other federal statutes (such as 18 U.S.C. Section 1349).

3. “Health Care Benefit Program”

18 U.S.C. Section 1347 applies to fraud and attempted fraud targeting all health care benefit programs. Under 18 U.S.C. Section 24(b), a “health care benefit program” is defined as, “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.” As a result, health care providers can be prosecuted under 18 U.S.C. Section 1347 for fraud and attempted fraud involving:

  • Medicare
  • Medicaid
  • Tricare
  • Veteran’s Administration (VA) health care benefits
  • Department of Labor (DOL) health plans and benefits
  • Other state and federal benefit programs
  • Private health insurance plans

4. “Fined Under this Title or Imprisoned Not More than 10 Years, or Both”

As a criminal statute, 18 U.S.C. Section 1347 imposes severe penalties for health care fraud. In a “standard” case, a health care provider charged under the statute can face fines of up to $250,000 (for individuals) or $500,000 (for organizations), and up to 10 years of federal imprisonment. If the fraud results in serious bodily injury (i.e., a patient overdoses on a prescribed opioid medication that was not medically necessary), the term of imprisonment can increase to 20 years. And if the fraud results in death (i.e., a fatal overdose), a single charge under 18 U.S.C. Section 1347 can carry a life sentence.

5. “Need Not Have Actual Knowledge . . . or Specific Intent”

In order to be guilty of health care fraud under 18 U.S.C. Section 1347, you do not need to know that your conduct is unlawful, and you do not have to specifically intend to illegally defraud a health care benefit program. If you are aware, or if you are willfully ignorant of the fact that you are involved in a fraudulent scheme, this is enough to satisfy the mental state (or “mens rea“) requirement of the law.

When facing an investigation under 18 U.S.C. Section 1347, it is common for health care providers to face allegations under a variety of other civil and criminal federal statutes as well. This includes the False Claims Act and Stark Law that we mentioned above, as well as the Anti-Kickback Statute and a variety of other fraud, controlled substance, and health care-related laws. Federal prosecutors are aggressively pursuing cases against health care providers nationwide, and avoiding charges, conviction, and sentencing requires a strategic and comprehensive approach to defending your business or practice.

Contact Reputable Federal Health Care Fraud Lawyers for a Free and Confidential Case Assessment

We are a team of experienced health care fraud defense attorneys and former U.S. Department of Justice (DOJ) prosecutors who represent health care providers nationwide in civil and criminal matters. If you are concerned about potential legal exposure or are currently being targeted in a federal investigation, we encourage you to contact us promptly at (888) 519-4897 for a free and confidential case assessment.

Oberheiden, P.C.
Compliance – Litigation – Defense
This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Merely reading this information does not create an attorney-client relationship. Prior results do not guarantee a similar outcome for any matter in the future, every case is different. Oberheiden, P.C. is a Texas LLP with its headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Health Care Practice Group has handled at least one hundred (100) matters in the health care industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence. For example, you need someone like Lynette S. Byrd, a former federal prosecutor in health care matters, who recently left the government and who is now sharing the valuable insights she gained as a health care prosecutor with our clients.

Dr. Nick Oberheiden

Dr. Nick
OBERHEIDEN

Lynette S. Byrd

Lynette S.
BYRD

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