What are the potential penalties for health care fraud and abuse?

Professionals or providers convicted of health care fraud may face incarceration, civil and criminal fines and exclusion from federal health care programs.

Over the past few decades, addressing health care fraud and abuse has become a growing concern for the federal government. Several programs, teams and task forces have been established to prosecute fraud and abuse, and according to the Centers for Medicare and Medicaid Services, these entities collected over $3.3 billion just in 2014 from providers who allegedly committed these offenses.

With this increased scrutiny of potential cases of health care fraud and abuse, a rising number of professionals and healthcare providers in New York may find themselves facing related criminal charges. It is important for these people to understand the potential penalties that can come with a conviction.

Criminal sanctions

The criminal penalties for knowingly submitting false Medicare claims, giving kickbacks or accepting kickbacks can be significant. If a person is convicted of making fraudulent claims as described in the False Claims Act, he or she may face up to five years in prison and criminal fines as high as $250,000. People who are convicted of violating the Anti-Kickback Statute may face criminal fines of up to $25,000 and a five-year period of incarceration.

Civil fines

The civil penalties for taking kickbacks, giving these payments to others or making fraudulent claims can also be substantial. The U.S. Department of Health and Human Services, Office of the Inspector General, may assess a fine of $50,000 for each violation of the Anti-Kickback Statute and a fine of $11,000 for each false claim. Furthermore, the Office of Inspector General may levy a fine of triple the damages that the government suffered due to fraudulent claims or kickbacks.

Exclusion

In addition to these penalties, health care providers who have been convicted of Medicare fraud or other felony fraud offenses may be excluded from federal health care programs. Exclusion prevents a person or entity from directly billing Medicare for any items or services. It can also limit a health care provider's ability to work for or contract with parties who receive funding through federal health care programs.

Failure to comply with the terms of exclusion can bring more serious penalties. The Office of the Inspector General may assess fines of $10,000 for each item or service for which an excluded party attempts to bill Medicare. Also, since reinstatement into federal health care programs is not automatic, violations may provide grounds for continued exclusion in the future.

Handling fraud charges

Unfortunately, many healthcare providers may find themselves facing these potential sanctions as a result of errors, oversights or misinterpreted actions. As an example, some providers may be investigated for fraud after making innocent billing errors or charging for legitimate services. Similarly, providers who are not careful when entering into health care transactions or making financial agreements may be accused of accepting kickbacks.

Given the serious penalties associated with a conviction, health care providers who are under investigation for any of these offenses should consider consulting with an attorney who has experience in this area of law. An attorney may be able to help a person justify his or her professional actions or identify other strategies for contesting the charges.

Whistleblowers and qui tam actions

Sometimes people become aware of instances of federal health care fraud through their jobs, volunteer service, relatives or friends, or through other connections. The federal False Claims Act provides for qui tam actions in which a private party can file a lawsuit under seal jointly on behalf of him or herself and the federal government that brings to the court and the government's attention the allegations of federal health care fraud that had been learned by that private party.

Qui tam actions are extremely complex, both in the requirements surrounding the situations in which one can be brought and in how they are prosecuted, but in certain outcomes, settlement, award, damages or penalty. Recovery of reasonable expenses, legal fees and costs may also be possible.

Anyone with questions about bringing a potential qui tam action should speak with an attorney as soon as possible, because there are deadlines after which the suit may not be brought. A lawyer can answer questions and help determine whether a qui tam suit is appropriate.