18 U.S.C. § 1347: Federal Health Care Fraud

What Does 18 U.S.C. § 1347 Prohibit?

18 U.S.C. § 1347 is the federal criminal statute addressing schemes to defraud health care benefit programs. Enacted in 1996, it applies to fraudulent conduct connected with the delivery of, or payment for, health care benefits, items, or services.

The law makes it a crime to knowingly and willfully execute, or attempt to execute, a scheme either to defraud a health care benefit program or to obtain money or property from such a program through false or fraudulent pretenses, representations, or promises.

The law applies to fraudulent acts, but does not apply to all incorrect claims or disputes regarding reimbursement decisions. Whether an act is in violation of § 1347 will depend on the evidence of the alleged scheme and the defendant’s knowledge and intent.

Which Health Care Programs Are Covered?

The phrase “health care benefit program” is defined in 18 U.S.C. § 24(b). It includes qualifying public and private plans or contracts affecting commerce under which medical benefits, items, or services are provided.

Therefore, § 1347 applies to all types of health insurance plans including those provided by private insurance providers. All individuals (such as health care professionals, facility operators, suppliers, billing companies, etc.) who engage in actions that meet the statutory criteria will be subject to investigation.

What Must Federal Prosecutors Prove?

A prosecution under § 1347 generally must establish that the defendant:

• Knowingly and willfully executed, or attempted to execute, a fraudulent scheme;
• Sought to defraud a covered health care benefit program or obtain its money or property by fraudulent means; and
• Acted in connection with the delivery of or payment for health care benefits, items, or services.

An attempt can be prosecuted even when the scheme does not succeed. The government must still prove the required criminal intent; negligence, inadvertent coding errors, or a good-faith disagreement about medical necessity do not automatically satisfy that burden.

Section 1347(b) adds an important distinction: prosecutors do not have to show that the defendant knew the statute existed or specifically intended to violate that statute. That provision does not eliminate the requirement to prove knowing and willful fraudulent conduct.

Statutory Maximum Penalties for Violation of 18 U.S.C. § 1347

The statutory maximum penalty for a violation of 18 U.S.C. § 1347 is dependent upon how severe the violation was:

• Ordinary Violation: Up to 10 years in federal prison; a fine; or both.
• Violation Resulting in Serious Bodily Injury: Up to 20 years in prison; a fine; or both.
• Violation Resulting in Death: Any number of years or life imprisonment; a fine; or both.

These are the statutory maximum penalties and are not automatically imposed. The actual penalty imposed will be determined by the charge(s); the facts proven at trial; the applicable sentencing guidelines/rules; and the discretion of the court. In addition to the penalties listed above, there may be restitution and/or other penalties if they are authorized by law.

What is the relationship between § 1347 and other fraud laws?

§ 1347 is different from the Federal False Claims Act; anti-kickback provisions; and false statement laws. Each of these laws has its own requirements and possible remedies. A civil billing dispute or regulatory violation alone will not meet the requirement for a § 1347 violation.

For additional information on investigations and legal representation, please visit our Las Vegas Healthcare Fraud Lawyer Page. If your claim involves inflated charges; duplicate submissions; or services never provided, please see False Billing and Claims.

Statutory source: 18 U.S.C. § 1347, United States Code.