Federal Healthcare Fraud Defense – 18 U.S.C. § 1347

What Is Federal Healthcare Fraud Under 18 U.S.C. § 1347?

Statutory Definition of Healthcare Fraud (18 U.S.C. § 1347)

18 U.S.C. § 1347 makes it a federal crime to knowingly and willfully execute, or attempt to execute, a scheme to defraud any healthcare benefit program. In simple terms, if someone makes false claims or misrepresentations to gain money, services, or property from a healthcare benefit program, they can be prosecuted under this statute.

Purpose of the Statute and Protected Programs

The statute protects both government-funded programs, like Medicare and Medicaid, and private health insurers. The law ensures that funds are used for legitimate medical services and not diverted through fraudulent conduct.

Who Can Be Charged – Providers, Facilities, Administrators, and More

Charges under 18 US Code 1347 can apply to doctors, nurses, administrators, billing specialists, those receiving kick-backs, and even patients who intentionally misrepresent information to obtain benefits. Both individuals and organizations may be prosecuted if evidence shows participation in a fraudulent scheme.

Elements of a Healthcare Fraud Offense Under 18 US Code 1347

Knowingly Executing or Attempting to Execute a Scheme to Defraud

Prosecutors must prove that the defendant knowingly participated in a fraudulent scheme. Honest mistakes in billing or coding are usually not enough for conviction.

Connection to the Delivery of or Payment for Healthcare Services

The fraudulent act must have a clear nexus to the delivery of healthcare or the payment for medical services. This requirement means the scheme must involve how care is provided, represented, or billed—not just a general financial dispute. Common examples include billing Medicare or Medicaid for medically unnecessary tests, misrepresenting a patient’s eligibility for benefits, or falsifying treatment records. Importantly, it also includes billing for healthcare services that were never performed or never actually received by the patient. In other words, submitting claims for phantom services or fabricated patient encounters falls squarely within the statute. The government often scrutinizes billing patterns to detect these types of claims, looking for red flags such as unusually high service volumes, repetitive codes, or claims submitted for patients who never visited the provider.

Material Misrepresentation or Concealment of Facts

Misstatements or omissions must be material, meaning they directly influence whether benefits are provided or payments are made.

Proving Criminal Intent in Federal Court

Intent is central in healthcare fraud cases. The government must demonstrate that the defendant acted to deceive a healthcare program for financial or other gain.

Common Types of Healthcare Fraud Prosecuted Under 18 U.S.C. § 1347

Billing for Services Not Rendered

This includes submitting claims for medical procedures or treatments that were never performed.

Upcoding, Unbundling, and Duplicate Billing

Providers may exaggerate the level of service provided (upcoding), bill separately for services that should be grouped (unbundling), or submit multiple claims for the same service.

Kickback and Referral Schemes (AKS and Stark Violations)

Arrangements where providers receive payments or gifts for referring patients violate the Anti-Kickback Statute and are often linked with fraud charges.

Fraudulent Medical Necessity Claims

Charging for tests or treatments that are not medically necessary but are billed as essential care.

False Cost Reports and Medicaid Overbilling

Submitting inflated expense reports or billing state-funded programs, such as Medi-Cal, for unqualified services.

Government Investigation and Enforcement Agencies

Role of HHS-OIG, FBI, DOJ, and CMS

The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), and the Office of Inspector General (HHS-OIG) play leading roles in healthcare fraud enforcement. The Centers for Medicare & Medicaid Services (CMS) also monitors compliance.

Use of Subpoenas, Search Warrants, and Grand Juries

Investigations may involve subpoenas for billing records, search warrants, and testimony before grand juries.

Civil vs. Criminal Healthcare Fraud Investigations

Some cases are handled as civil violations, especially under the False Claims Act, while others rise to the level of criminal prosecution under 18 U.S.C. § 1347.

Whistleblower Complaints and Qui Tam Actions

Insiders often file whistleblower claims, leading to both civil and criminal inquiries.

Penalties for Violating 18 U.S.C. § 1347

Federal Sentencing Guidelines and Maximum Prison Terms

A conviction may result in up to 10 years in federal prison. If the fraud causes serious bodily injury, the penalty can reach 20 years. If a patient’s death results, a life sentence may be imposed.

Financial Penalties, Restitution, and Asset Forfeiture

Defendants may face fines up to $250,000, restitution orders, and seizure of property obtained through fraud.

Professional Consequences – License Suspension, Medicare Exclusion

Medical professionals risk losing licenses, hospital privileges, and the ability to participate in federal healthcare programs.

Collateral Consequences for Facilities and Businesses

Organizations may lose contracts, face audits, or be barred from government healthcare funding.

Effective Legal Defenses in Federal Healthcare Fraud Cases

Lack of Intent to Defraud or Honest Billing Disputes

Errors in coding or billing practices without fraudulent intent can form a strong defense.

Reliance on Qualified Medical Judgment

If treatments were ordered based on legitimate medical reasoning, even if questioned later, this may counter allegations of fraud.

Improper Investigation or Constitutional Violations

Evidence gathered through illegal searches or violations of due process can be challenged in court.

Insufficient or Circumstantial Evidence

The prosecution must prove fraud beyond a reasonable doubt. Weak or circumstantial evidence may not meet this burden.

The Role of a Federal Healthcare Fraud Defense Attorney

Why You Need Legal Counsel Early in the Investigation

Early intervention is critical to protect rights and prevent mistakes during questioning or document requests.

Protecting Your Rights During Interrogation and Discovery

An attorney ensures you do not make self-incriminating statements and that evidence requests comply with the law.

Developing a Comprehensive Defense Strategy

Defense attorneys examine billing records, witness statements, and medical justifications to build a strong case.

Negotiating Deferred Prosecution or Civil Settlement

In some cases, it may be possible to resolve charges without a trial through settlements or reduced penalties.

How DCD LAW Can Help With Your Defense Under 18 U.S.C. § 1347

Proven Experience in Federal Healthcare Fraud Cases

At DCD LAW, we understand the complexities of healthcare fraud investigations. Our criminal defense team has handled cases involving federal statutes and high-stakes prosecutions.

In-Depth Understanding of Healthcare Billing and Compliance

We examine billing practices, compliance procedures, and program regulations to identify weaknesses in the government’s case.

Defense Strategies That Target Weaknesses in the Prosecution’s Case

From challenging intent to exposing investigative errors, we focus on strategies that protect your future.

Aggressive Representation in Pretrial, Trial, and Post-Trial Phases

From the first subpoena to trial advocacy, our attorneys remain relentless in defending your rights.