Philadelphia Healthcare Fraud Defense Lawyer: Pennsylvania and Federal Charges, Penalties, and Defense Strategies

Healthcare fraud investigations can expose physicians, nurses, pharmacists, therapists, medical practices, laboratories, home-health providers, business owners, billing companies, and others to serious criminal liability. These cases are often document-intensive and may involve thousands of claims, complicated billing rules, medical-necessity disputes, electronic records, reimbursement regulations, and allegations concerning conduct that occurred over several years. Discuss your case with a skilled and experienced healthcare fraud defense lawyer.

In Philadelphia, healthcare fraud may be investigated and prosecuted under Pennsylvania law, federal law, or both. Federal investigations frequently focus on Medicare, Medicaid, and other federal healthcare programs, while Pennsylvania prosecutions may involve Medicaid fraud, private insurance fraud, false billing, kickbacks, and related offenses.

An effective defense requires more than reviewing whether individual claims contained errors. Often, the central question is whether the government can prove that the defendant knowingly and intentionally participated in fraud rather than making billing mistakes, relying upon employees or billing professionals, or operating within a complicated regulatory system.

More on Federal Fraud Crimes, generally

Federal Healthcare Fraud — 18 U.S.C. § 1347

The primary federal healthcare fraud statute is 18 U.S.C. § 1347. It makes it a crime to knowingly and willfully execute, or attempt to execute, a scheme to defraud a healthcare benefit program or obtain its money or property through false or fraudulent pretenses in connection with healthcare benefits, items, or services. 

The statute reaches both government and private healthcare benefit programs.

A standard violation carries a potential sentence of up to 10 years in federal prison. If the violation results in serious bodily injury, the maximum increases to 20 years. If it results in death, the defendant may face imprisonment for any term of years or life.

Actual sentences are determined through a much more complicated process involving the advisory Federal Sentencing Guidelines, statutory factors, the alleged loss amount, criminal history, role in the offense, number and characteristics of victims, acceptance of responsibility, and other circumstances.

False Statements and Federal Healthcare Programs

Federal healthcare investigations frequently produce multiple charges rather than a single healthcare-fraud count.

Under 18 U.S.C. § 1035, knowingly and willfully making a materially false statement or using a materially false document in connection with the delivery of or payment for healthcare benefits, items, or services can result in up to five years’ imprisonment.

Prosecutors may also charge mail fraud, wire fraud, conspiracy, money laundering, identity-related offenses, or obstruction, depending upon the government’s theory.

This can dramatically increase the complexity of a case. An investigation involving one alleged billing practice can generate dozens of individual counts based upon particular claims, communications, transactions, or alleged false statements.

Federal Anti-Kickback Charges

Healthcare fraud prosecutions do not always involve billing for nonexistent services.

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) prohibits certain knowing and willful payments, offers, solicitations, or receipt of remuneration to induce or reward referrals or purchases involving items or services payable under a federal healthcare program.

The statute is broad enough to encompass remuneration in cash or in kind. A violation is a felony carrying potential imprisonment of up to 10 years and a fine of up to $100,000 under the statutory provision, in addition to other potential consequences. 

The details matter enormously. Not every financial relationship between healthcare professionals constitutes an illegal kickback, and healthcare law contains statutory exceptions and regulatory safe harbors applicable to qualifying arrangements.

Pennsylvania Medicaid Fraud

Pennsylvania has its own statutory framework governing fraud involving the Medical Assistance program.

The Pennsylvania Human Services Code contains specific provisions addressing prohibited conduct by Medical Assistance providers, including 62 P.S. §§ 1407 and 1408. Pennsylvania law addresses conduct involving false information, claims for services or merchandise that were not rendered, medically unnecessary services, improper billing practices, kickbacks, and related activities. The statutory framework provides for criminal penalties as well as civil and administrative remedies.

The consequences can extend beyond incarceration or fines. Healthcare professionals and businesses may face repayment demands, exclusion from programs, professional licensing consequences, and loss of the ability to participate in government-funded healthcare programs.

For a physician, pharmacist, therapist, or other licensed professional, those collateral consequences can threaten an entire career.

Pennsylvania Insurance Fraud

Private insurance billing may also produce criminal charges.

Pennsylvania’s insurance fraud statute, 18 Pa.C.S. § 4117, criminalizes various forms of intentionally fraudulent conduct involving insurance claims. Among other things, the statute reaches knowingly presenting materially false, incomplete, or misleading information in support of certain insurance claims and specifically addresses conduct involving healthcare facilities and healthcare providers.

Violations of § 4117(a) are generally third-degree felonies, while specified violations under subsection (b) are first-degree misdemeanors. The statute also authorizes restitution and additional civil penalties.

Depending upon the allegations, Pennsylvania prosecutors may pursue related charges such as theft, conspiracy, forgery, deceptive business practices, dealing in proceeds of unlawful activities, or other offenses.

Examples of Healthcare Fraud Allegations

Healthcare fraud can take many forms. A provider might be accused of billing Medicare or Medicaid for services that were never performed; billing for a more expensive procedure than the one actually provided (“upcoding”); billing separately for services that should have been bundled; submitting claims using another provider’s credentials; or falsely representing that treatment was medically necessary.

Other cases may involve allegedly fabricated patient visits, unnecessary testing, prescription schemes, durable medical equipment, home-health services that prosecutors contend were never provided, laboratory testing allegedly ordered without medical necessity, or kickbacks for patient referrals.

For example, suppose a medical practice submits thousands of claims under a physician’s provider number. Investigators later contend that hundreds of those services could not have been performed because the physician was not present on the dates claimed.

That evidence may appear significant—but it does not necessarily answer who submitted the claims, why they were submitted, whether another provider actually performed the services, what billing rules applied, or whether the physician knew the claims were inaccurate.

Those questions can become central to the defense.

Lack of Intent and Good-Faith Conduct

Healthcare billing is complicated. Coding rules change, reimbursement regulations can be difficult to interpret, and physicians frequently delegate billing responsibilities to employees or outside companies.

A mistake is not automatically fraud.

Depending upon the statute charged, the prosecution may have to establish a particular level of knowledge and intent. Evidence that a defendant acted in good faith, relied upon knowledgeable billing professionals, attempted to comply with regulations, corrected discovered errors, or reasonably interpreted ambiguous billing requirements may substantially undermine allegations of intentional fraud.

An experienced healthcare fraud defense lawyer should therefore distinguish fraud from error, negligence, poor recordkeeping, regulatory noncompliance, and legitimate disagreements about medical necessity or billing rules.

Challenging the Government’s Loss Calculation

Another major issue is the amount of money allegedly attributable to the fraud.

Prosecutors may begin with the total amount billed or paid during a particular period and contend that a substantial portion represents fraudulent proceeds. But a practice may have provided legitimate medical services even where billing problems existed.

A detailed defense analysis can examine claims individually or statistically, compare medical records with billing records, identify legitimate services, challenge assumptions about medical necessity, and distinguish actual loss from broader figures used during an investigation.

Loss calculations can be particularly important because they may significantly affect the advisory sentencing range in federal court.

Defense Investigation and Expert Analysis

Healthcare fraud cases often require an independent defense investigation.

That may include obtaining medical records, billing data, coding materials, Medicare and Medicaid rules, internal policies, emails, employee communications, audit records, financial records, and contracts with outside billing companies.

Expert witnesses can also be important. Medical experts may address whether treatment was medically necessary. Coding and billing experts may explain why a particular billing practice was reasonable or how errors occurred. Forensic accountants may analyze financial transactions and challenge the government’s calculation of alleged proceeds or loss.

Witness interviews can reveal that employees—not the defendant—made particular billing decisions or that internal practices were different from what investigators initially assumed.

Search Warrants, Interviews, and Government Investigations

Healthcare fraud investigations often begin long before charges are filed.

Federal agents may execute search warrants at medical offices, obtain electronic records, seize computers, subpoena financial records, interview employees, or approach a target seeking an interview.

These investigative steps should be carefully examined. The defense may challenge an overbroad search warrant, a warrant lacking probable cause, an unlawful seizure of electronic information, or statements obtained in violation of constitutional protections.

Early representation by a healthcare fraud defense lawyer can also allow defense counsel to investigate the government’s allegations while records and witnesses remain available and, where appropriate, communicate with prosecutors before charging decisions are finalized.

Strategic Defense in Healthcare Fraud Cases

Healthcare fraud prosecutions combine criminal law, healthcare regulations, medical evidence, accounting, and complex financial records. The government’s allegation that billing was incorrect is often only the beginning of the analysis.

The defense should ask: Who actually submitted the claim? What did the defendant know? What billing rule applied? Was the rule clear? Were the services actually provided? Was it medically necessary? Did the defendant rely upon employees or outside billing professionals? How did prosecutors calculate the alleged loss? And does the government’s evidence actually establish intentional fraud beyond a reasonable doubt?

Loncar Law Firm provides strategic criminal defense representation in Philadelphia and federal court for serious white-collar investigations and prosecutions, including healthcare fraud, Medicare and Medicaid fraud, insurance fraud, conspiracy, false statements, and related federal offenses. An experienced healthcare fraud defense lawyer will conduct careful investigation, detailed analysis of the financial and medical evidence, and craft a defense strategy developed around both the law and the facts of the individual case.