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Arresting Texas Doctors for Health Care Fraud: What You Need to Know

If you are a practicing physician here in North Texas, then you need to recognize how very, very serious the federal government is in targeting health care fraud.  The Justice Department is eager to find and arrest doctors, as well as other professionals, on all sorts of federal felony charges based upon fraud involving health insurance.

The Forest Park Medical Center Indictment

You’re probably aware of the big Grand Jury Indictment that was just released to the public involving the Forest Park Medical Center (FPMC) case.  For details (including the full text of that indictment), read last week‘s post.

Twenty-one defendants are identified in that criminal case.  Allegations involve things like bribery and kickbacks.  Conspiracy is charged, too.

However, the FPMC charges aren’t going to be the only multi-million dollar health care fraud arrests that Dallas, Fort Worth, and the rest of Texas can expect in the upcoming months.  And those felonies are not the only ones that may appear in future indictments, either.

As I discussed last week, the focus on health care fraud isn’t new to the Justice Department.  More and more we’re seeing the DOJ going after physicians in all sorts of specialties, as well as clinics, hospitals, and others on allegations that they’ve done bad things in order to get some insurance claim proceeds.



Worries for Texas Doctors and Physicians Concerned About the Feds

So, how can a doctor in Texas be secure that there aren’t federal investigators sniffing around in his or her business?  And how much is a physician allowed to delegate without worrying that they’re going to be liable for criminal mischief by their bookkeeper, coding staff, etc.?

Upcoding is just one example of health care fraud.  Does an anesthesiologist have to take the time to review coding before claims are submitted by his personnel?  Isn’t the practice stressful enough without having to micromanage everything?

Well, of course.  Any criminal defense lawyer representing a doctor on health care fraud is going to fight hard to distinguish the motivation of the physician and their need to rely on others for things like filing claims and handling paperwork.  Moreover, mistakes are going to be made by staff – there may be omissions or coding errors.

Fraud charges come into play when the investigators suspect greed.  If there are treatments that the federal agents don’t think are really needed, then they may argue health care fraud.  If there are claims presented for payment on procedures that they argue were not performed, then they may suspect health care fraud.

What is Health Care Fraud?

Let’s consider what health care fraud means to the federal prosecutors.  In sum, it’s just about anything that entails (1) filing an insurance claim for health care to (2) either private insurance companies or Medicare, Medicaid, or Tricare that (3) involves some kind of deception or false information in order to get (4) money and payment on the claim.

If the investigators can piece together facts to support an argument that there has been health care fraud, then the prosecutors can and will proceed.  They can do so using all sorts of federal laws. 

Federal Health Care Fraud Law

There is a specific federal “health care fraud law.”  It is found in 18 U.S. Code § 1347. This wording is very broad, allowing the prosecutors lots of leeway in charging doctors (and others).  Plus, it applies across the board in every state, independent of any state statutes.

Notice how (1) it can involve a life sentence; and how (2) the doctor doesn’t have to have actual knowledge or specific intent to be held liable for health care fraud.

18 U.S. Code § 1347 states the following:

Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—

(1) to defraud any health care benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program,

in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.

(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.

Other Federal Felonies for Doctors Suspected of Health Care Fraud

Generally, the complaint isn’t going to hang on that statute alone, or the statutes passed specifically defining Medicare or Medicaid fraud (18 U.S.C. section 287, etc.).

Doctors need to understand that the U.S. Attorney General’s Office can base their criminal complaint on a variety of federal felonies, including things like money laundering (which will enable them to institute  forfeiture proceedings) as well as racketeering (RICO) violations.

This means more charges, and the defendant facing a variety of felony convictions based on separate federal criminal laws.

What is RICO?

The Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. 1961 et seq., has gained notoriety for its use in successful prosecutions of organized crime defendants.  However, there is nothing in the law itself that limits its application.

For many years now, RICO has been used to go after health care fraud defendants.  Often, this is done in civil RICO cases by insurance companies who go after the providers to get their money back.  However, federal prosecutors are free to use criminal RICO allegations in their cases, as well.

Fentanyl Drug Bribe and Kickbacks Case: RICO allegations

This week, the New York Times reported on a big national health care fraud prosecution based in part on RICO violations. In a story written by Peter J. Henning and published on December 12, 2016, entitled, “RICO Charge in Pharmaceutical Case May Signal Tougher Tactics,” it’s suggested that the Justice Department may assert RICO violations in more health care fraud cases in the future.

In this case, the DOJ alleges RICO violations in a health care fraud case where doctors in various parts of the United States are said to have taken bribes and kickbacks from a drug company in exchange for prescribing its drug Subsys (a spray with fentanyl as an ingredient) to their patients.   The CEO of the company was among those indicted.  For more, read the Wall Street Journal coverage in “Former Insys CEO Arrested in Opioid Prescription Kickback Case.

Criminal Sentencing in a Federal Health Care Fraud Case

Defense attorneys representing doctors and other medical professionals charged with federal health care fraud are going to work hard to get the charges dismissed and if that’s not possible, then to get the best sentence or plea deal possible for that person.

Under the criminal law, health care fraud charges can result in: (1) fines; (2) imprisonment; and (3) restitution.

Monetary Fines

Fines can be enormous.  Medicare fraud can result in a fine of $250,000 per offense, for instance.  It’s not unusual for health care fraud cases to allege millions, if not billions, of dollars in fraud violations with corresponding amounts in monetary fines against those charged.

Prison Terms

Prison terms can be sentenced against the doctor and other health care fraud defendants, too.  One conviction of Medicare fraud can lead to 5 years imprisonment; and as stated above, it is possible for a life sentence to be given in a health care fraud case.


Finally, there is restitution.  Punishment may include ordering the defendant to pay specific sums to individuals alleged to be the victims of fraudulent acts.  That can mean the insurance company who is alleged to have overpaid on claims.

Doctor’s Defense against Health Care Fraud

The Justice Department is hot to find and prosecute health care fraud, and it should not be surprising that the DOJ will use confidential informants and undercover federal agents to snoop around a physician’s practice if they suspect health care fraud.

See my 2013 post, for instance, where I warned that senior citizens were being sought as volunteer spies for the government to investigate doctors and physicians, “Medicare Fraud Sting Operations By Federal Government Includes Senior Volunteers Spying On Doctors And Health Care Providers: Expect To See More National Stings And Sweeping Arrests Of Medical Pros In The Future.”

How Do You Know You’re Suspected by the Feds?

Often, a doctor will learn they are the target of a health care fraud investigation from a past employee who calls to warn them.  “I’ve been contained by the FBI about working for you, thought you should know.”  Something like that.

Other times, there’s a hint of an investigation because related businesses or professionals have been targeted.  If your CPA is being investigated and he works exclusively with health care providers, then you may well be the subject of curious federal fraud investigators, too.

From a criminal defense perspective, the sooner a doctor or physician suspects a federal investigation, the better.  The defense team can act to audit and review the practice and prepare for any potential charges or government action.  

Any Texas Health Care Provider Can Be Suspected of Health Care Fraud

Anyone who is practicing medicine in the State of Texas should understand that they can be suspected of health care fraud and investigated by federal authorities.  Doesn’t mean you will be charged.  If you are charged, doesn’t mean you will be convicted.


For more information, check out our web resources and read Michael Lowe’s Case Results as well as his in-depth article, “PRE-ARREST CRIMINAL INVESTIGATIONS.”


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