Health Care Fraud Defenses

A health care fraud indictment usually arrives as a narrative rather than a list. It describes a practice built to bill instead of to treat, patients recruited instead of referred, and records written to justify claims that had already been decided. Defending the case means taking that narrative apart at the element level, because the government must prove each element separately, and in most of these matters only one or two are genuinely contested.

Under 18 U.S.C. § 1347 the government must prove a scheme to defraud a health care benefit program, or to obtain its money or property by materially false pretenses, representations, or promises; a connection to the delivery of or payment for health care benefits, items, or services; and a knowing and willful state of mind. This page works through where each of those breaks down in practice, and where a defense that sounds persuasive collapses under the records. To discuss a specific file, call (888) 437-7747.

On this page

Good Faith and the Knowledge Element

Most section 1347 trials are decided on state of mind. The government has to show that the defendant acted knowingly and willfully, which is a different thing from showing that claims were wrong. A provider can be mistaken, disorganized, badly advised, or simply out of step with a coverage rule without having formed an intent to defraud anyone.

Good faith is proved with the same materials the government uses. Contemporaneous questions to a payor, requests for guidance, corrections made without prompting, consistent treatment of patients across payors, and the absence of any effort to hide the conduct all point away from intent. So does an arrangement in which the defendant would have earned the same amount whether or not the disputed claims were submitted.

The government answers with notice. Earlier audit results, denials that explained the rule, internal messages flagging a problem, and training the defendant received are the standard proof that a mistake became a choice. What the defendant did after receiving that notice is usually the pivot in the whole case.

Materiality and What the Payor Would Have Done

A false statement is not enough. It has to be material, meaning capable of influencing the payment decision. Health care billing carries a large volume of technical requirements, and not every departure from one of them would have changed whether a claim was paid.

A materiality defense is built from payor behavior rather than from argument. Where a program continued paying claims after learning of the same defect, where the requirement was applied inconsistently across similar providers, or where the alleged misstatement concerned something the payor did not consider, the element weakens. This is evidence that has to be obtained, often from the payor rather than from the client.

Materiality also interacts with intent. A defendant who understood a requirement to be a formality may have a weaker materiality argument but a stronger good faith argument, and choosing between those framings is a decision to make early, because the discovery each one needs is different.

Reliance on Coders, Vendors, and Advisors

Many providers outsource coding, claim submission, and compliance review. Reliance on a professional can negate willfulness where the defendant disclosed the relevant facts and genuinely followed the advice received. It fails where the disclosure was incomplete, where the advice was solicited to paper a decision already taken, or where the provider overrode what the adviser said.

Advice-of-counsel and reliance defenses come at a cost. Raising them can waive privilege over the communications involved, and that waiver can be broader than expected. Whether to assert the defense is therefore not a trial-week decision. It is assessed as soon as the relevant files are gathered, with an understanding of what a waiver would expose.

Testing the Government’s Statistical Case

The analytic package that starts these investigations is a comparison, and comparisons can be built badly. A provider whose volume looks unusual may serve a facility population, may have acquired another practice, may operate the only clinic of its type in an area, or may be compared against a peer group that does not resemble it.

Where the government has moved from a reviewed sample to a total, the extrapolation is a second target. Sample construction, the qualifications applied by whoever reviewed the files, and the treatment of claims that were incomplete rather than false all affect the result. Defense review of the same records regularly produces a materially smaller set of genuinely disputed claims, and that smaller set changes both the charging picture and the sentencing picture.

Attribution: Whose Scheme Was It

Health care cases usually involve several actors: a marketing company, a clinician, a supplier or pharmacy, and a billing operation. The indictment tends to describe a single scheme, but the evidence often shows separate businesses with different knowledge, different incentives, and different views of what the others were doing.

Separating a client from a scheme is concrete work. It means showing what the client was told, what the client could see from the documents that actually crossed the desk, and what the client was paid for. Cooperating witnesses drive the opposite narrative and arrive with incentives that can be examined, including the exposure they avoided and the terms under which they are testifying.

Frequently Asked Questions

Is good faith a complete defense to a section 1347 charge?

Good faith addresses the state of mind the government has to prove, so where it is accepted the charge fails. It is not a technicality and it is not a plea for sympathy. It is a factual claim that the defendant believed the claims submitted were payable, and it has to be supported by contemporaneous records rather than by testimony alone. Questions asked of payors, corrections made without prompting, and consistent treatment across insurers are the material that makes the argument credible to a jury.

Does it help that the services were actually provided?

It helps a great deal, though it is rarely dispositive on its own. Delivery of real services undercuts a theory that the practice existed to generate claims, and it supports credits against the loss figure if the case reaches sentencing. The government answers by shifting the theory, arguing that services were medically unnecessary, that they were not delivered by the person billed, or that they were induced by an improper payment. Each of those alternatives calls for a different record.

Can I place responsibility on my billing company?

Sometimes, and the analysis is fact-driven. Reliance on a vendor can negate willfulness where the provider disclosed the relevant facts and followed what the vendor advised. It does not work where the provider directed the coding, ignored the vendor, or gave the vendor incomplete information. Vendors also have their own counsel and their own exposure, and they may cooperate against a client. That possibility should be weighed before any position is taken that depends on the vendor supporting it.

What does a materiality defense look like in practice?

It looks like payor records. The argument is that the alleged misstatement could not have influenced the decision to pay, and the proof is how the program behaved: whether it continued paying after learning of the defect, whether it applied the requirement consistently, and whether the requirement bore on coverage at all. That evidence generally sits with the payor rather than the provider, so it has to be sought deliberately and early rather than assumed to arrive with discovery.

Does having a compliance program help?

A compliance program can support a good faith argument by showing that the provider tried to identify and correct problems rather than conceal them. Its value depends on whether it operated. A program that produced audits nobody read, or that flagged the exact issue the indictment describes without any response, can help the government instead. What matters is the record of what the program found and what was done about it, which is why those files are gathered early in a defense.

Can the government prove intent from claims data alone?

Data can support an inference, and prosecutors argue that volume, timing, and patterns speak for themselves. Standing alone, that inference is testable, because unusual numbers frequently have unremarkable explanations. What normally makes an intent case is corroboration: messages, cooperating witnesses, records created after a subpoena, or payments tied to referral volume. Where corroboration is thin and the case rests on the analytics, the defense is aimed at the comparison itself rather than at the conclusion drawn from it.

Working With Law Offices Of SRIS, P.C.

Defending a health care fraud charge is element work. Intent, materiality, and attribution are proved or defeated with contemporaneous records, payor behavior, and the incentives of the witnesses the government has already spoken to, which is why the file review comes before any position is taken.

Mr. Sris, Owner and Founder of Law Offices Of SRIS, P.C., is a former prosecutor and is admitted in Virginia, Maryland, the District of Columbia, New Jersey, and New York. The firm has been practicing since 1997. Mr. Sris and the firm’s Of Counsel attorneys handle criminal defense matters across those jurisdictions, which matters in federal practice because a single investigation frequently reaches conduct, witnesses, and records in more than one state. Mr. Sris brings a background in accounting and information systems from George Mason University, applied to complex financial and technology-related cases.

The firm serves Northern Virginia from 1655 Fort Myer Dr, Suite 700, Room 719, Arlington, VA 22209 and central Virginia from 7400 Beaufont Springs Drive, Suite 300, Room 395, Richmond, VA 23225. By appointment. Call (888) 437-7747 to schedule. Request a consultation. Reach our location at (888) 437-7747.

This page provides general information about defenses to health care fraud charges under 18 U.S.C. § 1347 and does not create an attorney-client relationship. Case results depend on a variety of factors unique to each case. Results may vary.

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These defences apply to one offence. Our page on health care fraud charges sets out that offence from start to finish.