In the State of California, Healthcare fraud, which sometimes is also referred to as health insurance fraud and medical billing fraud, is covered and defined under Penal Code 550(a). This code section prohibits acts such as 1) attempting to bill a medical insurance provider for services already allegedly rendered twice despite only performing such services once; 2) claiming and attempting to bill for services a patient never actually received; and 3) “upcoding” which is the term used describe an attempt to bill for a more expensive service(s) than the one actually rendered. Today the system of billing for healthcare has become very complicated and made fraudulent claims even more possible.
WHAT MUST THE PROSECUTOR PROVE
To prove you guilty of healthcare fraud under Penal Code section 550, the prosecutor must prove beyond a reasonable doubt the following:
- You Knowingly made or caused to be made any false or fraudulent claim for payment of a healthcare benefit;
- You Knowingly submitted a claim for a healthcare benefit that was not used by, or on behalf of of, the claimant;
- You Knowingly presented multiple claims for payment of the same healthcare benefit with intent to defraud; OR
- You unlawfully aided, abetted, solicited, or conspired with another person to do the following;
- For purposes of paragraph one to four, inclusive, a claim or a claim for payment of a healthcare benefit also means a claim or a claim for payment submitted by or on the behalf of a provider of any workers’ compensation health benefit under the labor code.
Health insurance fraud may subject you to penalties of a fine of up to $1000 dollars and or up to six months’ county jail if the fraudulent claims add up $950 or less. However, if the fraudulent claims are exceed $950, penalties may include up to one year in county jail and or a fine up to $10,000.
ELEMENTS OF THE OFFENSE
In order to prove you guilty of insurance fraud, the prosecutor must prove that:
You “submitted” a claim for services not rendered
You “submitted” a claim to a health insurance provider for services that you did not in fact render. For example: Dr. Smith submits a claim in an effort to bill his patients medical insurance provider for services Dr. Smith didn’t actually perform.
Submitting a false or fraudulent claim
- You applied certain charges to patients that pay with their insurance benefits that you normally do not apply to patients who pay your out-of-pocket.
For example: Dr. Smith, a dentist, gives services to patients who pay out of their own pocket and who prefer to use their insurance benefits to compensate Dr. Smith. Dr. Smith gives a free consultation for patients who intent to pay out of pocket. However, he charges insurance providers for the same type of consultation to those patients opting to use their medical insurance.
- You perform curtain procedures but bill the insurance provider for more expensive procedures than those rendered.
For example: Dr. Smith is a dentist. The service of whitening teeth is more expensive than just doing a cleaning. Dr. Smith cleans his patient’s mouth but submits a claim to the patient’s insurance provider that he (Dr. Smith) did a whitening, which entitles him to higher compensation.
- You perform services that were unnecessary for a specific patient
For example: Dr. Smith tells the patient that the patient must have lab work done when in fact no lab work was needed. The patient gets the lab work done and Dr. Smith bill the patient’s health insurance provider. Dr. Smith may be prosecuted for such acts.
You submit multiple claims for the same services in an effort to double bill. For example: Dr. Smith does a series of medical exams on his patient, and bills the patient’s medical provider. However, Dr. Smith also attempts to bill the patient.
Submitting claims where there was an undercharge without acknowledging possible overcharges
You undercharge a patient by mistake but eventually overcharge the same patient for something else without notifying the healthcare provider of the difference. For example: Dr. Smith normally charges $500 for lab work and $200 for a patient visit. Eventually, Dr. Smith realizes that he only charges the patient for the visit and not the lab work. Three month later, Dr. Smith overbills the same patient for other services. Dr. Smith must notify the healthcare insurance provider of both transactions. Otherwise, Dr. Smith likely has committed health fraud.
Preparing a writing that can be used in support of a fraudulent healthcare claim
For example: a doctor or anyone who works for a medical provider can face criminal charges if it is found that they were involved in any document preparation that would help or support a fraudulent healthcare claim.
PENALTIES FOR PENAL CODE SECTION 550(a), CALIFORNIA’S HEALTH CARE FRAUD LAW
Exactly what penalties you will receive for an offense of health care fraud depends on the dollar amount of the claim(s).
For claims of $950 dollars or less, the offense will be charged as a misdemeanor.
Penalties for Misdemeanor 550(a)
- A fine of up to $1000 and or
- Up to six months in county jail
For claims exceeding the amount of $950, you may be charged as a misdemeanor or a felony, depending on the particular circumstances of your case. For misdemeanor offenses under this category, you face:
- Up to one year in county jail, and or
- A fine of up to $10,000
Penalties for a felony 550(a)
For a felony offense, you face:
- Up to one-year county jail, or
- Two, three, or five years in county jail
- You may also instead or in addition be fined up to $50,000 or double the amount of the fraud (usually the larger amount of the two)
If the charges involve more than one claim, the aggregate amount of all claims must be added up. This is to see if this figure is more then $950 over a period of 12 months.
Possibility of loss of license to practice
A doctor who is convicted of health insurance fraud may also find his license to practice revoked or suspended.
DEFENSES TO KIDNAPPING
Some common defenses to health care insurance fraud include, but are not limited to, the following:
You did not know that you were involved in a fraudulent claim
In order to prove you guilty of health care fraud, the prosecutor must establish beyond a reasonable doubt that you knew that you were involved in submitting a fraudulent claim. Because medical billing is so complex, you may have made an innocent mistake about the billing process or a specific service rendered. You therefore may have had no knowledge that a claim made or submitted was fraudulent.
You had no intent to defraud
To prove you guilty of health care fraud, the prosecutor must prove beyond a reasonable doubt that you had the intent to defraud. For example, Jill works for Dr. Smith, a dentist. Jill discovers that Dr. Smith has asked her to double bill insurance companies for services rendered once or in some instances not rendered at all. Jill brings this to Dr. Smith’s attention, but he threatens to fire her should she notify any authorities. Jill cannot afford to lose her only source of income and must find another job before she can quit or be fired from Dr. Smith’s office. If Dr. Smith is caught and Jill is implicated, Jill can assert the following defenses: a) she was not involved in the actual doubling billing or fraudulent billing, if in fact that was the case; and b) if she was involved, she had no intent to actually defraud and was planning to notify the authorities as soon as it was financially safe for her to do so.
HOW THE LOS ANGELES CRIMINAL ATTORNEYS CAN HELP YOU
Negin carefully evaluates the circumstances of the underling offense to uncover any and all facts and factors that rebut or weak an allegation of health care fraud. As with every case, Negin does not take the prosecutor’s conclusions or assertions at face value. Negin carefully considers the context in which the alleged offense took place—whether the accused had knowledge, to what extent did he or she know of the alleged offense, to what extent was he or she involved in the alleged offense, and was he or she coerced into committing the alleged offense. Negin will attempt to seek answers to these questions in order to identify holes and weaknesses in the prosecution’s case.