Federal Health Care Fraud Defense Attorney – 18 U.S.C. § 1347

Federal health care fraud investigations are increasing nationwide. The Department of Justice (DOJ) uses advanced billing data analytics and algorithmic tracking to target doctors, clinics, billing companies, executives, and other healthcare professionals.

As government scrutiny intensifies, even well-intentioned providers facing honest billing bottlenecks or complex coding rules find themselves under investigation for alleged fraud involving Medicare, Medicaid, TRICARE, or private commercial insurers.

Under 18 U.S.C. § 1347, federal prosecutors aggressively pursue health care fraud cases.

These highly coordinated operations routinely deploy multiple law enforcement agencies, including the Federal Bureau of Investigation (FBI), the Department of Health and Human Services Office of Inspector General (HHS-OIG), and the Drug Enforcement Administration (DEA).

If you have received a federal target letter, an administrative subpoena, or a Civil Investigative Demand (CID), prosecutors believe they have substantial evidence linking you to a federal offense.

A conviction can result in decades in federal prison, millions of dollars in fines, permanent exclusion from federal health programs, and the immediate destruction of your medical practice.

Early intervention by experienced federal defense counsel is critical to protecting your assets, your license, and your liberty.

Quick Reference Summary Chart

Statute / Tool	Legal Focus & Scope	Maximum Criminal Penalty
18 U.S.C. § 1347	Health Care Fraud (Defrauding any public or private health benefit program)	10 years per count (Up to 20 years if serious injury results; Life if death results)
18 U.S.C. § 1349	Health Care Fraud Conspiracy (Knowingly entering into an agreement to defraud)	Same maximum penalty as the underlying substantive offense (10 years to Life)
Civil Investigative Demand (CID)	Pre-litigation administrative subpoena used by the DOJ to compel testimony and documents	Non-compliance triggers federal court enforcement and immediate contempt sanctions
Target Letter	Formal written notification from the DOJ stating that you are the subject of a grand jury probe	Indictment is imminent; signals federal prosecutors believe they have clear evidence of guilt

What Is Federal Health Care Fraud Under 18 U.S.C. § 1347?

Federal law defines health care fraud under 18 U.S.C. § 1347 as knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program, or to obtain money or property owned by or under the custody of any health care benefit program through false or fraudulent pretenses, representations, or promises.

Crucial Legal Element — Intent to Defraud: To secure a conviction, federal prosecutors must prove beyond a reasonable doubt that you acted with specific intent to defraud. However, under the statute, the government does not need to prove that you had actual knowledge of the specific federal law or that your conduct explicitly violated it—only that you knowingly engaged in a deceptive scheme to obtain money you knew you were not entitled to receive.

Common Forms of Alleged Health Care Fraud

• Upcoding and Unbundling: Billing for a higher-paying service than the one actually performed, or fragmenting a multi-step procedure into separate billing codes to increase reimbursement rates.

• Services Not Rendered: Submitting claims for patient visits, diagnostic imaging, laboratory tests, or medical equipment that were never actually provided.

• Medically Unnecessary Services: Ordering treatments, home health services, sleep studies, or therapies that fail to meet objective clinical medical necessity guidelines.

• Kickbacks and Referral Schemes: Paying or receiving financial incentives, gifts, or cross-referral benefits to induce patient volume, violating the Anti-Kickback Statute and the Eliminating Kickbacks in Recovery Act (EKRA).

• Pharmacy & Prescription Fraud: Forging prescriptions, participating in compounding pharmacy TRICARE fraud schemes, or violating Controlled Substances Act (CSA) registrations.

For a healthcare executive charged under 18 U.S.C. § 2 or prosecuted under the responsible corporate officer doctrine, financial damages can start accumulating immediately and escalate quickly if not met with vigorous legal action.

Hypothetical Case Study: Defending Complex Corporate Billing & Compliance Allegations

The chief medical officer and co-owner of a multi-location orthopedic rehabilitation clinic in Southern California was the subject of a joint investigation by the FBI and HHS-OIG.

Federal data analytics algorithms identify a statistically unusual spike in the clinic's billing codes for intensive neuromuscular re-education therapies.

The DOJ later issued a broad Civil Investigative Demand (CID) requesting five years of internal communications, electronic health records (EHR), and patient charts. Shortly afterward, a formal grand jury target letter was sent, accusing the scheme of systematically engaging in upcoding and unbundling under 15 U.S.C. § 1347, and conspiracy under § 1349.

The defense team at Eisner Gorin LLP immediately intervened before an indictment was handed down, halting direct contact between federal agents and clinic personnel.

Rather than allowing the government to review the billing data in a vacuum, our legal team retained independent forensic medical billing experts and coding consultants to conduct a comprehensive parallel audit of the flagged codes.

The expert analysis revealed that the billing anomalies were not driven by a criminal intent to defraud, but were instead the direct result of ambiguous regulatory updates regarding telehealth compliance and a systemic software formatting error built into a third-party electronic billing platform that the clinic had integrated.

Furthermore, our defense attorneys established that the clinical treatments met objective medical necessity guidelines by securing favorable documentation from independent auditing physicians.

By demonstrating a clear lack of criminal scienter (knowledge of wrongdoing), our firm successfully redirected the narrative from a willful criminal conspiracy to an administrative billing dispute.

The DOJ declined to file criminal charges under 18 U.S.C. § 1347, and the matter was resolved through an administrative civil settlement, preserving the physician's medical license, preventing corporate asset forfeiture, and keeping the medical practice fully operational.

5 Foundational Federal Health Care Fraud Laws

18 U.S.C. § 1347 — Health Care Fraud

This is the main federal law used to prosecute individuals and companies for schemes to defraud healthcare programs. Each false claim submitted can be charged separately as an individual criminal count.

18 U.S.C. § 1349 — Attempt and Conspiracy

This statute penalizes anyone who attempts or conspires to commit federal health care fraud. Conviction does not require proving that money was actually stolen or that the scheme succeeded—simply agreeing to participate in the unlawful plan is enough to face the same maximum penalties as the completed offense.

31 U.S.C. § 3729 — The False Claims Act (FCA)

The main civil enforcement tool used by the federal government to combat healthcare billing fraud. It imposes heavy financial penalties on anyone or any provider who knowingly submits a false or fraudulent claim to government programs like Medicare or Medicaid.

Violators face treble damages—three times the actual loss—and civil penalties exceeding $20,000 per false claim. The law also oversees the qui tam whistleblower process, enabling private individuals to file lawsuits on behalf of the government.

42 U.S.C. § 1320a-7b — The Anti-Kickback Statute (AKS)

This criminal law forbids knowingly and intentionally paying, soliciting, or receiving any form of compensation—such as cash, free rent, costly gifts, or volume-based cross-referrals—in exchange for referring someone for items or services under a federal healthcare program.

Violations are classified as felonies, with potential penalties of up to 10 years in federal prison per violation.

21 U.S.C. § 841 & § 843 — Controlled Substances Act Violations

These offenses are often linked to billing fraud related to pain management clinics, compounding pharmacies, and physician practices.

They criminalize the distribution or dispensing of controlled substances outside the normal scope of medical practice or without a valid medical reason, including the falsification of DEA recordkeeping logs and prescription forms.

Strategic Defenses Against Federal Fraud Charges

A federal health care fraud target letter or indictment does not equal a conviction. Developing a sophisticated, multi-front defense strategy requires attacking the government's assumptions regarding compliance and financial data:

• Lack of Specific Intent / Good Faith: Honest mistakes, systemic billing software glitches, isolated clerical errors, and bad advice from independent billing consultants do not constitute federal fraud. If you acted in good faith, you lack the requisite legal intent to defraud.

• Regulatory Ambiguity: Medicare, Medicaid, and private commercial insurance rules are notoriously dense, contradictory, and constantly shifting. If the coding guidelines or local coverage determinations (LCDs) governing your specific medical services are legally ambiguous, the government cannot establish that you knowingly violated a clear standard.

• Legitimate Medical Necessity: Prosecutors rely heavily on hired government medical reviewers who examine patient charts years after the fact. We counter their narrative by introducing custom clinical data, patient progress metrics, and peer-reviewed medical experts to prove that the ordered procedures or prescriptions were clinically justified.

• Procedural and Constitutional Challenges: We carefully analyze the methods federal agents used to acquire evidence. If investigators executed an overbroad DEA search warrant, exceeded the scope of a DEA pharmacy audit, or coerced statements during a high-pressure interview without providing proper constitutional warnings, we aggressively pursue federal Daubert motions and evidentiary suppression hearings to exclude that evidence from trial.

Frequently Asked Questions (FAQs)

What should I do if federal agents show up at my medical practice with a search warrant?

Immediately ask for a copy of the search warrant and the leading agent's business card, then contact an experienced federal criminal defense lawyer without delay.

Do not answer any questions about substantive matters or try to explain your billing practices to the agents present.

While you should not hinder the execution of the warrant or destroy documents—actions that could be considered federal obstruction under 18 U.S.C. § 1519—you have a guaranteed constitutional right to stay silent and to have a lawyer present during any interrogation.

What is the difference between an SEC or civil audit and a DOJ criminal healthcare investigation?

A routine insurance or administrative audit aims to detect overpayments, technical processing issues, or minor compliance errors, often leading to a repayment request.

In contrast, a DOJ criminal investigation is specifically aimed at obtaining a felony indictment.

If you receive a target letter, a federal grand jury subpoena, or an administrative Civil Investigative Demand (CID) signed by a federal prosecutor, it indicates that the government is seeking evidence of criminal intent with the possibility of prison time and asset forfeiture.

Can a physician be held criminally liable under 18 U.S.C. § 1347 for billing errors made by a third-party billing company?

Physicians are often targeted for systemic billing errors made by third-party contractors because they approve claims under their NPI numbers. 

However, if the billing company used incorrect coding or guidelines without your awareness, your legal team can use an advice-of-professional defense to refute the element of criminal intent.

How does the federal government use data analytics to detect healthcare fraud?

The DOJ, FBI, and HHS-OIG use sophisticated predictive modeling and data analytics tools to continuously monitor billions of public and private insurance claims. 

These algorithms set regional baseline averages for specific billing codes, modifier tags, and patient risk profiles.

If your practice shows a statistical spike—like billing unusually high therapy hours daily or ordering disproportionate diagnostic tests—the software flags your NPI number for a prompt federal investigation.

What are the long-term collateral consequences of a federal health care fraud conviction?

 Apart from federal prison terms and hefty fines, a conviction under 18 U.S.C. § 1347 results in lifelong career consequences.

The HHS-OIG will add you to the Exclusion List, effectively banning you from participating in or receiving payments from Medicare, Medicaid, and all federal healthcare programs.

Furthermore, such a conviction automatically results in the permanent revocation of your state medical or professional license and hospital privileges, and the seizure of corporate assets through federal criminal forfeiture.

Speak With a Federal Health Care Fraud Defense Attorney

If you have been contacted by federal agents, received an administrative subpoena, or are facing complex billing allegations under 18 U.S.C. § 1347 or § 1349, time is your most valuable asset.

Decisions made during the initial investigative stages will shape the trajectory of your entire case.

Our legal team has extensive experience defending physicians, executives, and corporate healthcare entities against aggressive federal prosecutions, protecting both their personal liberty and medical careers.

Contact Eisner Gorin LLP today for a confidential consultation.

📞 Call (818) 781-1570 to safeguard your practice, your reputation, and your future.

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