Criminal Defense · Haute Lawyer Network
What Is Healthcare Fraud?
Last reviewed: June 2026
Healthcare fraud is one of the most heavily prosecuted federal crimes — the Department of Justice and Department of Health and Human Services conduct joint enforcement through the Healthcare Fraud Prevention and Enforcement Action Team (HEAT).
The federal healthcare fraud statute (18 U.S.C. § 1347) criminalizes knowingly executing a scheme to defraud a healthcare benefit program.
Common forms include billing for services not rendered, upcoding — billing for a more expensive service than was actually provided, unbundling — billing separately for services that should be billed together, kickback schemes — paying or receiving remuneration to induce referrals, and billing for medically unnecessary services.
Penalties include up to 10 years in prison per count (20 years if serious bodily injury results), exclusion from Medicare and Medicaid, and significant civil monetary penalties under the False Claims Act.
Frequently Asked Questions
What is the Anti-Kickback Statute?
A federal law prohibiting the payment or receipt of anything of value in exchange for referrals of services covered by federal healthcare programs. Violations are a felony and can result in exclusion from federal healthcare programs.
What is a qui tam lawsuit?
A civil lawsuit brought by a whistleblower (relator) under the False Claims Act on behalf of the government, alleging that a healthcare provider defrauded Medicare or Medicaid. Successful whistleblowers receive 15-30% of the government's recovery.
What is the Stark Law?
A federal law prohibiting physicians from referring Medicare patients to entities with which the physician has a financial relationship — unless a specific exception applies. Unlike the Anti-Kickback Statute, Stark Law violations do not require intent — it is a strict liability statute.
Can a healthcare provider be excluded from Medicare for a billing error?
Exclusion is generally reserved for intentional fraud, not good-faith billing errors. However, a pattern of billing errors can attract scrutiny, and the line between error and fraud can be contested in complex coding disputes.
What should a healthcare provider do when they receive a federal investigation notice?
Retain experienced federal criminal defense counsel immediately. Do not alter records, do not discuss the matter with employees, and do not respond to investigators without counsel present.
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