Medicaid fraud is defined as providing false information to claim medical reimbursements beyond the scope of payment for actual health care services rendered. Such cases are treated differently from Medicare claim-related errors that are unintentional--due to mistakes in calculation of costs for medical services. Medicare fraud invokes serious penalties and investigations into suspected cases are pursued with the assistance of many federal and state-level agencies including the FBI, Department of Health and Human Services and Department of Justice.
False Statement Act Penalties
Health care providers found guilty of intentionally providing false statements to the government, in the form of documents or written communication that try to conceal facts, are guilty under the False Statements Act, 18 U.S.C. §1001. Penalty for conviction under this Act is a fine not exceeding $10,000 or an imprisonment of up to five years. In some cases, both the penalties may be combined according to the severity of the prosecution. Penalties are assessed even if the communication wasn't directly extended to a government agency, such as when the fraudulent communication was made with an insurance provider, state agency or a government representative.
Social Security Act Penalties
The Social Security Act, 42 U.S.C. 132Oa-7b(b) is popularly called the Anti-kickback provision. It invokes felony criminal penalties against those found guilty of seeking remuneration in the form of kickbacks, refund, bribes or any other illegal compensation for making false statements/representation to help claim Medicare benefits. Penalties for the Anti-kickback provision include a fine not exceeding $25,000, imprisonment of up to five years or both.
Civil Monetary Law Penalties
Under the Civil Monetary Penalties Law, 42 U.S.C. §1320a-7a statute, administrative actions can be invoked instead of criminal or civil proceedings for Medicare fraud. Due to the administrative nature of such penalties, the health care provider cannot demand a jury trial. The administrative law judge can fix the amount of penalties and the total amount cannot be appealed. Practitioners found guilty of willingly making false statements for claiming Medicare benefits can be fined up to $10,000 for each medical service that was fraudulently represented. Further, the practitioner can also be disqualified from Medicare programs.
Federal Mail Fraud Penalties
Prosecutions can also be made in accordance with the Federal Mail and Wire statutes. Such penalties are commonly levied upon health care providers/facilities that use communication tools like emails and television/radio advertisement to propagate their deceptive schemes. Each conviction for such a fraud results in a fine of not more than $1000, prison sentence of up to five years or both.
Health Insurance Portability Act Penalties
A number of additional penalties have been defined under the Health Insurance Portability Act that seek to address the issue of fraudulent claims in federal healthcare programs. The Health Care Fraud, 42 U.S.C. §1347 statute states that anyone found guilty of intentionally trying to defraud health care benefit programs, such as Medicare, through false pretense or fraudulent representations can face imprisonment of up to 10 years or an equivalent fine.