Federal healthcare fraud under 18 U.S.C. § 1347 carries up to 10 years in federal prison per count (20 years if serious bodily injury; life if death). The Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and Stark Law (42 U.S.C. § 1395nn) add additional liability. HHS-OIG and DOJ jointly investigate, and TXND and TXED both have dedicated healthcare fraud units.
Healthcare fraud investigations routinely result in federal charges with decades of prison exposure. The Northern District of Texas has been particularly active, with several major healthcare fraud prosecutions in recent years.
What Is Federal Healthcare Fraud?
18 U.S.C. § 1347 makes it a federal crime to knowingly and willfully execute, or attempt to execute, a scheme or artifice to:
- Defraud any healthcare benefit program, OR
- Obtain, by false pretenses, money or property owned by or under the custody of any healthcare benefit program
“Healthcare benefit program” covers Medicare, Medicaid, TRICARE, CHIP, and private insurance.
Common Healthcare Fraud Patterns
- Billing for services not rendered — most common allegation
- Upcoding — billing for higher-reimbursement codes
- Unbundling — billing separately for procedures that should be bundled
- Medically unnecessary services — performing procedures without medical need
- Kickbacks — paying or receiving remuneration for referrals
- Durable medical equipment (DME) fraud — phantom deliveries or unnecessary equipment
- Home health fraud — billing for visits never performed
- Pharmacy fraud — billing for drugs not dispensed
Penalties Under § 1347
- Up to 10 years per count in federal prison
- Up to 20 years if serious bodily injury results
- Life imprisonment if death results
- Up to $250,000 in fines per count
- Mandatory restitution — often in millions
- Forfeiture of proceeds
- Exclusion from federal healthcare programs (OIG exclusion)
- License revocation by state licensing boards
Related Statutes
Anti-Kickback Statute (42 U.S.C. § 1320a-7b)
Criminalizes knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce healthcare referrals. Up to 10 years, $100,000 fine.
Stark Law (42 U.S.C. § 1395nn)
Civil liability for physician self-referral to entities with which they have a financial relationship. Each claim can generate substantial civil penalties.
False Claims Act (31 U.S.C. §§ 3729-3733)
Civil liability with treble damages and per-claim penalties. Qui tam provisions allow whistleblowers to sue on behalf of the government.
Exclusion Authority (42 U.S.C. § 1320a-7)
Mandatory exclusion from federal healthcare programs upon healthcare fraud conviction.
Sentencing Guidelines
Healthcare fraud is sentenced under USSG § 2B1.1 with loss-based calculations:
- Loss is generally the amount billed, not the amount paid, for healthcare fraud
- Intended loss counts even if not realized
- Aggregate loss across the scheme is used
- Sophisticated means (+2), number of victims, abuse of trust, and leadership role all enhance
Defense counsel frequently litigates the loss amount — reducing it by even 20% can move the Guidelines range dramatically.
Defense Strategies
Good Faith Defense
§ 1347 requires knowing and willful conduct. Defense attorneys emphasize compliance efforts, reliance on counsel, and good-faith billing interpretations.
Medical Necessity
Expert medical witnesses can testify that the services were medically necessary, defeating the fraud theory.
Loss Calculation Challenges
Aggressive loss litigation can move the Guidelines range by years. Challenges focus on billing vs. payment, reasonableness of the billed codes, and proper exclusion of legitimate claims.
Statute of Limitations
5 years for § 1347; 6 years for most false claims act cases.
Global Resolution
Many healthcare fraud cases resolve through global resolutions — criminal plea + civil settlement + corporate integrity agreement — that limit total exposure.
Frequently Asked Questions
What triggers a federal healthcare fraud investigation?
Whistleblower complaints (qui tam), data analytics by Medicare/Medicaid fraud prevention, patient complaints, audit discrepancies, and referrals from state licensing boards.
Am I excluded from Medicare automatically after a conviction?
Yes, under 42 U.S.C. § 1320a-7. Mandatory exclusion follows healthcare fraud conviction and typically lasts 5+ years.
Can I continue practicing medicine during the investigation?
Usually yes, but state licensing boards may impose restrictions. Interim relief orders are possible in egregious cases.
Are kickbacks per se illegal?
The Anti-Kickback Statute prohibits remuneration for inducing federal healthcare program referrals. Safe harbors exist (42 C.F.R. § 1001.952) for specific arrangements.
Can I negotiate a non-prosecution agreement?
In some cases, yes — particularly for smaller providers with strong cooperation and remediation. Deferred prosecution agreements are also possible.
Speak With a Frisco Criminal Defense Attorney
If you or a loved one is facing federal healthcare fraud charges in Frisco, Collin County, or anywhere in the Dallas-Fort Worth metroplex, the time to act is now. L and L Law Group attorneys are available 24 hours a day, 7 days a week. Call (214) 466-1398 for a free, confidential consultation, or submit your case online and a licensed attorney will contact you directly.
This article is general information, not legal advice. Texas criminal law is complex and fact-specific — please consult a licensed Texas attorney about your particular situation. Past results do not guarantee future outcomes.