Medicare And Medicaid Fraud Prosecutions
1. Overview
Medicare and Medicaid fraud involve deceptive practices to obtain improper payments from these federal and state healthcare programs. These frauds drain billions from healthcare resources and are aggressively prosecuted.
Common Types of Fraud:
Billing for services not rendered
Upcoding (billing for more expensive services than provided)
Kickbacks for patient referrals
Falsifying patient records
Unnecessary medical services
2. Legal Framework
Key Statutes Used in Prosecutions:
False Claims Act (FCA), 31 U.S.C. §§ 3729-3733: Allows the government to recover damages for fraudulent claims submitted for payment.
Anti-Kickback Statute (42 U.S.C. § 1320a-7b): Prohibits knowingly paying or receiving remuneration to induce referrals of federally funded healthcare services.
Health Care Fraud Statute (18 U.S.C. § 1347): Criminalizes schemes to defraud any healthcare benefit program.
Stark Law (42 U.S.C. § 1395nn): Restricts physician referrals where there is a financial relationship.
Program Fraud Civil Remedies Act and various state laws.
3. Elements of Medicare/Medicaid Fraud
Submission of false or fraudulent claims to Medicare or Medicaid.
Intent to deceive or mislead the government.
Resulting in improper payment or financial loss to the government.
Participation in illegal referral schemes or kickbacks.
4. Key Case Law: Detailed Analysis
Case 1: United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943)
Facts:
Contractors submitted fraudulent claims for work on government projects, including Medicaid-related services.
Holding:
The Supreme Court upheld liability under the False Claims Act for submitting false claims to the government.
Significance:
Early case confirming the government’s right to recover funds from fraudulent claims.
Case 2: United States v. Greber, 760 F.2d 68 (3d Cir. 1985)
Facts:
The defendant was charged under the Anti-Kickback Statute for providing kickbacks to doctors to secure referrals reimbursable by Medicare.
Holding:
The court upheld the conviction, stating kickbacks constitute an illegal inducement.
Significance:
Clarified the broad reach of the Anti-Kickback Statute in preventing referral-based fraud.
Case 3: United States v. Bornstein, 423 U.S. 303 (1976)
Facts:
Defendant submitted false Medicare claims by overcharging for services.
Holding:
The Supreme Court interpreted the FCA’s intent requirement, holding that “knowingly” includes reckless disregard or deliberate ignorance.
Significance:
Lowered the standard of proof for intent in FCA prosecutions, facilitating fraud convictions.
Case 4: United States v. Krizek, 111 F.3d 934 (D.C. Cir. 1997)
Facts:
A physician was convicted for accepting kickbacks in exchange for Medicare patient referrals.
Holding:
The court upheld the conviction, confirming kickbacks violate Medicare law regardless of whether the patient was harmed.
Significance:
Reinforces zero-tolerance for financial inducements affecting federal healthcare programs.
Case 5: United States v. AseraCare Inc., 938 F.3d 1278 (11th Cir. 2019)
Facts:
The hospice provider was prosecuted for billing Medicare for hospice care that was not medically necessary.
Holding:
The court affirmed the fraud conviction based on evidence of false claims and medically unnecessary services.
Significance:
Shows increased scrutiny of medical necessity in Medicare billing.
Case 6: United States v. Starks, 157 F.3d 833 (10th Cir. 1998)
Facts:
Defendant was convicted for submitting false Medicaid claims for home healthcare services that were never provided.
Holding:
The conviction was affirmed; evidence supported fraudulent billing.
Significance:
Demonstrates that billing for services not rendered is a key prosecutable offense.
Case 7: United States ex rel. Franklin v. Parke-Davis, 147 F. Supp. 2d 39 (D. Mass. 2001)
Facts:
Whistleblower suit alleging illegal marketing of drugs leading to false Medicaid claims.
Holding:
Court allowed the False Claims Act claim to proceed, recognizing illegal marketing as a cause of false claims.
Significance:
Shows how FCA can be used to target pharmaceutical fraud impacting Medicaid.
5. Summary Table
| Case Name | Legal Principle | Significance |
|---|---|---|
| Marcus v. Hess | Liability for false claims | Foundation for False Claims Act enforcement |
| United States v. Greber | Anti-Kickback Statute enforcement | Broad application to illegal referrals |
| United States v. Bornstein | “Knowingly” standard under FCA | Facilitates prosecution of reckless fraud |
| United States v. Krizek | Kickbacks violate Medicare laws | Zero tolerance for inducements in referrals |
| United States v. AseraCare | Medical necessity as element of fraud | Focus on medically unnecessary billing |
| United States v. Starks | Billing for services not rendered | Core fraud offense |
| Franklin v. Parke-Davis | FCA applied to pharmaceutical marketing | Whistleblower suits expand enforcement tools |
6. Conclusion
Medicare and Medicaid fraud prosecutions rely heavily on proving that defendants knowingly submitted false claims or engaged in illegal inducements such as kickbacks. The False Claims Act remains the cornerstone of civil and criminal actions, often supported by whistleblower (qui tam) suits. Courts have consistently broadened the scope of intent and minimized the need to prove direct harm to patients.
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