Overview of the Federal Healthcare Fraud Statute – 18 U.S.C. 1347
Federal Healthcare Fraud Defense Lawyers
The federal government has many different tools for prosecuting healthcare providers suspected of defrauding Medicare, Medicaid, Tricare, and other healthcare benefit programs. From the Stark Law to the False Claims Act, laws that are both specific and non-specific to healthcare impose penalties for everything from misapplying the Medicare billing guidelines to offering kickbacks and making so-called physician “self-referrals.” When under investigation by the government, healthcare providers must enlist the assistance of the best federal healthcare fraud defense lawyers. These types of lawyers can help a healthcare provider successfully navigate an investigation.
One of the government’s most powerful tools in healthcare fraud investigations is 18 U.S.C. Section 1347, the federal healthcare 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 healthcare 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 healthcare benefit program,
in connection with the delivery of or payment for healthcare 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 healthcare 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 healthcare 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 healthcare 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 healthcare 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 healthcare 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. “Healthcare Benefit Program”
18 U.S.C. Section 1347 applies to fraud and attempted fraud targeting all healthcare benefit programs. Under 18 U.S.C. Section 24(b), a “healthcare 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, healthcare providers can be prosecuted under 18 U.S.C. Section 1347 for fraud and attempted fraud involving:
- Veteran’s Administration (VA) healthcare 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 healthcare fraud. In a “standard” case, a healthcare 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 healthcare 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 healthcare 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 healthcare 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 healthcare–related laws. Federal prosecutors are aggressively pursuing cases against healthcare providers nationwide, and avoiding charges, conviction, and sentencing requires a strategic and comprehensive approach to defending your business or practice.
Contact Reputable Federal Healthcare Fraud Lawyers for a Free and Confidential Case Assessment
We are a team of experienced healthcare fraud defense attorneys and former U.S. Department of Justice (DOJ) prosecutors who represent healthcare 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 888-680-1745 for a free and confidential case assessment.
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