Both the federal and the California state government has given a lot of focus on Medicare fraud and abuse because it has been a growing concern and has led to the loss of millions of dollars by health insurers. Fraud crimes in the health industry have also made it difficult for health care operators to provide affordable medical services. Several measures have been taken, including the formation of the task force and other programs to investigate and prosecute these fraud cases. Scrutiny for Medicare fraud has increased, which has consequently led to an increase in the number of health care operators being investigated and charged with Medicare fraud crimes, including those who have done nothing wrong.

At The LA Criminal Defense Law Firm, we are available to offer guidance if you are under investigation or being charged with this crime. Our attorneys have highlighted the overview of this crime, the various types of Medicare fraud, prosecution of the crime, penalties, and related offenses to provide knowledge in case you are charged with health care fraud.

Overview of PC 550

Health insurance fraud or Medicare fraud is a white-collar crime defined under PC 550(a).  The statute forbids health care operators from doing the following:

  • Over-billing for health care services
  • Billing for services not provided
  • Inflating the cost of each medical service or procedure
  • Giving or receiving kickbacks
  • Undertaking unnecessary medical services and procedures

PC 550 is also commonly known as:

  • Medicare fraud
  • Medical insurance billing fraud
  • HMO fraud

This type of fraud has been on the increase because private medical insurers and the government has been paying for the medical bills instead of the patients receiving treatment. This has created loopholes that have been exploited by healthcare practitioners, thus promoting fraud.  Anyone who falsified information to health insurance to obtain payment for a claim they are not entitled to can be charged for violating PC 550.

Types of Medicare Fraud

PC 550 forbids certain fraudulent conduct related to different types of insurance. Various sections of health insurance fraud laws focus on different criminal activities. Below are the different kinds of health insurance fraud:

Presenting a Claim for a Medical Service or Procedure that was not Delivered

According to PC 550, it is unlawful to submit a claim for any kind of health care service or procedure that the claimant didn’t use. Therefore, if you bill an insurer for a service not provided, you are likely to have health insurance fraud charges filed.

Presenting Untrue or Fraudulent Claim

If you try seeking health benefits by submitting a false claim, you will face charges for the offense. Dishonest or deceitful claims include:

  • Performing a procedure, the patient didn’t need or seek
  • Billing the insurer for a costlier service or procedure different from what the patient got.
  • Charging patients covered by health insurance policies the same amount charged to patients paying out of their pockets.

Double Billing

The law forbids medical experts from attempting to bill an insurance company twice despite only performing a single procedure or providing a medical service once. Also, the law prohibits individuals from aiding, abetting, or conspiring with another person to knowingly present more than one claim for payment of the same health care service or procedure with the intent to commit fraud.

Presenting Undercharges without Overcharges

PC 550 also forbids individuals from unlawfully soliciting or conspiring with any other person to deliberately present for payment any undercharges for a particular claimant without also submitting billing for overcharged services.

Preparing Documents in Support for a False Claim

PC 550 also criminalizes the preparation of documents to be used to support a false health care insurance claim.

Prosecution of PC 550 Cases

To prove that you are guilty of Medicare fraud, the DA must demonstrate that you took part in the above behaviors or criminal activities. Additionally, they must also prove the following elements:

1. The knowledge that the Claim was False or Deceitful 

You are guilty of this crime if the prosecutor can show that you were aware of the claim being presented to the health insurer was false or fraudulent.

2. Intending to Defraud

You are guilty of this type of fraud if the prosecution can show you planned to defraud an insurance entity or another individual. Also, they must show that you acted fraudulently or portrayed acts that were intended to cheat or gain an unfair advantage over another person or insurer. The court will consider you to have the intention of committing fraud if you planned to cause loss. If you didn’t plan on defrauding or deceiving someone to cause damage, then you are innocent.

Penalties for a PC 550 Conviction

In the event the prosecution succeeds in proving all the above elements, you will face harsh penalties for this crime. The kind of punishment you are going to face, however, depends on the amount of the false claim. Sentences for a claim involving nine hundred and fifty dollars or less will be lighter than those of a claim involving $950 or higher. If you are charged with double-billing, your sentence depends on whether the total amount of the claims totals up to $950 and above within 364 days.

Claims of Less than $950

If your case involves claims whose amount is less than dollars nine hundred and fifty, the prosecution will opt for misdemeanor charges. If convicted under this charge, you are likely to face the following penalties:

  • As much as one thousand dollars’ fine
  • No more than 180 days’ jail sentence

Claims of $950 or Above

The crime becomes a wobbler if the amount of claims you are accused of submitting is $950 or higher. It is, therefore, at the discretion of the prosecuting party to charge you with either a misdemeanor or a felony. If they choose misdemeanor charges, a conviction attracts the following punishment:

  • No more than three hundred and sixty-four days in jail
  • As much as ten-thousand-dollar fine

However, if they prefer felony charges, a conviction is subject to the following penalties:

  • Probation with a compulsory twelve months’ jail incarceration
  • Twenty-four, thirty-six, or sixty months’ incarceration

Additionally, the judge might choose to fine you for a felony PC 550 conviction. The amount of penalty to be paid can be no more than fifty thousand dollars ($50,000) or twice the amount of have been convicted of defrauding an entity or individual.

Loss of Medical License

Besides the jail and fine penalties, medical experts convicted of Medicare fraud can lose their medical licenses. The court might choose to suspend the license or revoke it. License suspension for doctors and nurses can be very devastating because you might never be able to operate again. It will be even worse if you were innocent, but because of weak defense, you are convicted. You might spend time in jail, pay hefty fines, and get your professional license suspended, whereas you had done nothing wrong. Because of this, it is advisable to hire an excellent criminal defense attorney who will ensure your rights are protected and that the right defense is applied based on the facts of your case. That way, you can avoid the above penalties.

Legal Defenses for PC 550 Charge

With an attorney from The LA Criminal Defense Law Firm, there are multiple factual and legal defenses that you can use to fight Medicare fraud cases. Some of these defenses include:

  1. Lack of Knowledge/ Mistake of Fact

    Unless you presented a duplicate or fraud claim, you could not be convicted. Your attorney can argue that you lacked knowledge that you were submitting an untrue application. You can support the claim by arguing that medical billing systems are very sophisticated, which increases the possibility of experienced professionals to make a mistake while billing. You can say that you filled out the wrong form or were mistaken about a specific fact, which is why you submitted a falsified claim. With such an argument, you will be acquitted of the charges because the court will conclude that you didn’t know about the false claim.

  2. No Intentions to Defraud

    It is the role of the prosecution to show that you had plans to defraud the health insurer or a person to be convicted. A reasonable attorney can challenge the element by proving to the court that you lacked the intention to defraud, thus being exonerated.

Offenses Related to PC 550

Some crimes are charged alongside or in place of Medicare Fraud; these offenses include:

Medi-Cal Fraud

Medi-Cal is a state-run medical insurance program aimed at helping low-income earners access to quality medical care. The program is meant to help families that are low-income earners with children, pregnant women, and seniors who are disabled or suffering from specific diseases. Medi-Cal fraud is committed when you try to lie about your eligibility for the program or when doctors and other health care experts present fraudulent claims or information to obtain benefits. Since this program is a type of health insurance program, defrauding can result in a PC 550 charge. The offense can also be charged as an additional charge.

People commit Medi-Cal fraud when they:

  • Make false declarations to obtain the benefit of the Medi-Cal program
  • Deliberately submit a false claim for the program benefit payment
  • Carefully present a claim for program benefit that was not used

 On the other hand, healthcare professionals commit this kind of crime if they do the following:

  • Submitting a false application for supplying the services or products to defraud the program
  • Knowingly providing false information to obtain more compensation than the program entitles you
  • Use misleading information to defraud Medi-Cal or conspire or execute a scheme intended to defraud Medi-Cal
  • Soliciting, giving bribes or kickbacks to get referrals for services or merchandise covered under the program

According to WIC 14014, you commit Medi-Cal fraud if you deceive about your eligibility for the program. So, if you receive benefits from the program after giving false information about your eligibility or another person gets benefits because you lied about their eligibility, then you are guilty of Medi-Cal fraud.

The penalties for this offense are categorized based on the amount of claim, just like in Medicare fraud.  In the event, the amount of fraud is dollars nine hundred and fifty or less; you will face a misdemeanor charge whose conviction carries the following penalties:

  • As much as six months’ incarceration
  • Misdemeanor probation
  • A fine not exceeding $10,000
  • Restitution to the California Department of Health Care Services

In the event the amount in question is $950 or higher, you will face a felony or a misdemeanor charge. Upon conviction of a felony charge, you will be subject to the following penalties:

  • 16, 24, or 36 months’ jail incarceration
  • Formal probation
  • No more than ten thousand dollars in fine
  • Restitution to the California Department of Health Care Services

When deciding on what charges to file against you, the prosecutor will look at your criminal history to see if you have any worker’s comp fraud or PC 550. They will also evaluate the facts surrounding the case and the duration since you were convicted when deciding on a preferred charge.

When medical professionals commit Medi-Cal fraud, they violate WIC 14107. If you are charged with a misdemeanor WIC 14107, the penalties in the event of a conviction include:

  • Misdemeanor probation
  • A maximum of 364 days in jail
  • A fine of as much as triple the fraud amount

If charged and convicted of a felony, the penalties are:

  • Formal probation
  • 24, 36, or 60 months’ state imprisonment
  • A fine three times the fraud amount

Note that if you engaged in a plan to defraud the Medi-Cal program under a situation where two or more persons risked sustaining great bodily injuries, you are subject to enhanced penalties. For every person who sustained significant bodily harm, you will get an additional 48 months’ jail time on top of the original sentence.

Despite these penalties being harsh, you can still avoid them by building a strong defense. You can claim that you made an innocent mistake; otherwise, you had no plans to defraud. Additionally, you can argue that the prosecution attorney lacks enough evidence to demonstrate you committed fraud. The defense works best if you are charged with allegations.

Prescription Fraud

The offense can be committed by either a patient or a doctor. When a doctor writes an illegal prescription to a patient, he or she violates Health and Safety Code HS 11153. HS 11173, on the other hand, is violated when a patient attempts to get or obtain a prescription for controlled substances using fraud, deceit, or misrepresentation of facts. HS 11173 forbids patients from doing the following:

  • Acquire or try to acquire controlled substances
  • Purchase or try to but the administration of controlled substances
  • Buy or attempt to buy controlled substances

With the definition, it means you can be convicted for this crime even if there is no prescription involved or you didn’t obtain the drug.

HS 11153 defines prescription fraud by medical professionals like doctors or nurse practitioners, psychiatrists or dentists as deliberately issuing prescription that is not for a legitimate medical purpose or one that outside the area of specialization of the medical practitioner.

Remember, medical practitioners can only be guilty of this crime if they acted willingly or knowingly. If at all you administered the prescription in good faith, and for legitimate purposes, you cannot be guilty of violating HS 11153.

Prescription fraud is a wobbler. Based on the nature of the allegations and your criminal past, the prosecution can prefer felony or misdemeanor charges. Misdemeanor prescription fraud is punishable by:

  • No more than twelve months in jail
  • Summary probation
  • No more than one-thousand-dollar fine

When charged with a felony and convicted, you are subject to the following penalties:

  • Formal probation
  • Sixteen, twenty-four, thirty-six months in jail
  • As much as dollars twenty thousand fine

Also, if you are a doctor or nurse, a conviction for this offense can result in medical license suspension or revocation. The reason being the crime is related to the qualifications, functions, and duties of a doctor.

Even after being charged with prescription fraud, you can still save yourself from serving jail time or losing your license by hiring an experienced criminal defense attorney. Some of the patients charged with these offenses are also not the typical lawbreakers, and it might be the pain or addiction to pills pushing them to break the law. Building a strong defense is the most suitable way to avoid the consequences for both the medical practitioner and the patient. Some of the legal defenses your attorney can apply to fight these charges include:

  • You as the defendant didn’t use fraud or deceit to acquire the prescription
  • You were not aware you were prescribing a controlled substance for non-legitimate reasons
  • Law enforcers entrapped you

If you apply these defenses the right way based on the circumstances of your case, chances are the charges against you will be dismissed or reduced to offenses with lighter penalties.

Worker’s Compensation Fraud

PC 550 often overlaps with worker’s comp fraud. Workers’ comp fraud is codified under PC 1871.4. It is defined as doing any of the following:

  • Making, or causing to be made, deliberate false statement or representation with the intent to obtain or deny a worker’s comp claim
  • Submitting, or causing to be presented, a knowingly fraudulent statement either oral or written in support or against a claim for worker’s comp benefits
  • You were willingly aiding and abetting or conspiring with any other individual to commit a worker’s comp fraud
  • Making or causing to be made, a false statement concerning entitlement to benefits, intended to discourage an injured employee from claiming or pursuing benefits

Workers comp is an insurance policy entitled to injured employees from the employer. In the event you as an employee is injured in the line of duty, your employer’s insurer will pay you for the following:

  • Medical bills
  • Temporary disability
  • Permanent disability
  • Death benefits

In worker’s comp claims, you don’t need to prove that another person is at fault as long as you were engaging or performing duties that will benefit the employer.

Workers comp fraud overlaps with PC 550 when:

  • You meaningfully make or cause to be made any fraudulent claim for compensation of medical care benefits covered under worker’s comp insurance
  • You willingly present a claim for a medical benefit covered by the worker’s comp insurance but unused by the person pursuing the claim
  • You deliberately submit several claims for the same worker’s comp health care benefit for purposes of fraud

Apart from the injured workers or applicants, doctors, and other medical professionals providing treatment to injured employees can be involved in worker’s comp fraud. When a doctor is convicted of any worker’s comp fraud, he or she risks losing his or her medical license in addition to other criminal penalties.

Workers comp fraud is a wobbler. In case the prosecutor opts for misdemeanor charges and successfully convicts you, you will be subject to the following punishment:

  • Summary probation
  • No more than one year in jail
  • A fine of as much as one hundred and fifty thousand or double the fraud amount whichever is higher
  • Restitution to any victims of your fraudulent activities

If charged with a felony and convicted, the prosecution the potential penalties are:

  • Formal probation
  • 24, 36, or 60 months’ jail sentence
  • A fine of no more than $150,000 or twice the amount of fraud whichever amount is higher
  • Restitution to the parties who were victims of fraud

To avoid these penalties, you can argue that there is insufficient evidence to convict you of worker’s comp fraud or you lacked fraudulent intent.

Find a Los Angeles Criminal Defense Attorney Near Me

In the event you or someone close to you has been charged with health care fraud or other types of fraud crimes, we invite you to reach out to The LA Criminal Defense Law Firm. Our highly experienced attorneys will offer a free consultation over the phone or at our Los Angeles, CA offices. Call us today at 310-935-1675 for guidance throughout the case.