Defending Telehealth Providers Against Healthcare Fraud Charges (18 U.S. Code 1347)
The rapid expansion of telehealth services has revolutionized patient access to care, but it has also attracted intense scrutiny from federal law enforcement.
Telehealth providers today face a heightened risk of federal investigation for healthcare fraud under 18 U.S. Code § 1347. This is largely due to the complexity of remote billing codes and aggressive regulatory oversight aimed at recovering federal funds.
For many physicians, nurse practitioners, and clinic administrators, an investigation comes as a shock. You may have operated in good faith, only to find that administrative errors or software defaults are being interpreted by prosecutors as criminal acts
If convicted, you could face up to 10 years in prison, and if a patient sustained injury or died as a result, the sentence could be much longer.
If you are a telehealth provider facing investigation or charges for healthcare fraud, you need skilled legal counsel to minimize your exposure and your risks. Schedule a confidential consultation by calling Eisner Gorin, LLP at (818) 781-1570 or contact us here.
What Is Healthcare Fraud Under 18 U.S. Code § 1347?
Healthcare fraud, as defined by 18 U.S. Code § 1347, is the act of knowingly and willfully executing a scheme to defraud a healthcare benefit program or obtain its money or property through false pretenses.
To secure a conviction, federal prosecutors must prove specific elements beyond a reasonable doubt:
- Scheme to Defraud: Prosecutors must show the existence of a "scheme or artifice" aimed at defrauding a healthcare benefit program, which can be any public or private plan providing medical benefits, such as Medicare, Medicaid, or private insurance.
- Obtaining Money or Property via False Pretenses: The government must prove an attempt to acquire money or property from the benefit program through "false or fraudulent pretenses, representations, or promises," often involving the submission of fraudulent claims for reimbursement.
- Knowingly and Willfully: The prosecution must establish that the defendant acted "knowingly and willfully," meaning the action was a deliberate choice to commit an unlawful act, not an accidental error.
Under 18 U.S.C. § 1347, charges of health care fraud involving medically unnecessary procedures can result in up to ten years in federal prison per count, with no maximum if the patient was seriously harmed.
How Does the Intent Standard Work in Telehealth Fraud Cases?
To prove intent, prosecutors must only show that the telehealth provider knew that their actions were unlawful, not that they had a specific intent to violate this statute.
A key detail in Section 1347(b) is a 2010 amendment that lowered the intent threshold, making it easier for prosecutors to file charges.
The government doesn't need to prove the defendant had "actual knowledge" of the statute or "specific intent" to violate it.
Instead, they only need to show the defendant knew their actions were generally unlawful. This lower standard poses risks for providers, as consistent billing errors or aggressive coding could be more easily framed as criminal fraud rather than administrative mistakes.
What Are the Potential Penalties?
The consequences of a conviction are severe and can instantly dismantle a medical career.
- Standard Violation: A conviction can result in fines and imprisonment of up to 10 years per count.
- Serious Bodily Injury: If the violation results in serious bodily injury to a patient (for example, due to a fraudulent prescription), the sentence can increase to up to 20 years.
- Death: If the violation results in the death of a patient, the defendant may face imprisonment for any term of years or even life.
Why Is the Government Targeting Telehealth for Fraud Investigations?
Telehealth providers are often targeted due to the rapid expansion of the industry, complex remote billing codes, and aggressive federal oversight aimed at curbing perceived vulnerabilities in the system.
Explosive Growth and Regulatory Lag
The rapid adoption of telehealth services after the COVID-19 pandemic ensured continuity of care but also opened the door to "fraud, waste, and abuse." Federal agencies like HHS and DOJ view this expansion as high-risk and have allocated significant resources to address it.
Complexity of Billing and Coding
Telehealth billing relies on unique and evolving Current Procedural Terminology (CPT) codes and place-of-service modifiers that are specific to remote services.
These codes are easily misinterpreted; for example, the billing requirements for audio-only visits are distinct from those for audio-video visits.
If a provider or their staff misapplies these codes, it can lead to billing errors. To federal investigators, a pattern of such errors can appear to be a deliberate attempt to illegally maximize revenue.
To combat these perceived risks, the government has created specialized task forces, such as the Health Care Fraud Strike Force, to identify and prosecute fraud in the telehealth sector.
These agencies use data analytics to spot irregular billing patterns. If your billing data deviates significantly from your peers—for instance, billing for more high-level consultations than average—you may be flagged for an audit or investigation.
Related Federal Healthcare Fraud Crimes
Healthcare fraud investigations involving telehealth providers often include additional federal charges. Prosecutors frequently combine multiple statutes when they believe fraudulent billing, kickbacks, or financial transactions were used to obtain money from federal healthcare programs.
False Claims Act – 31 U.S.C. §§ 3729–3733
The False Claims Act makes it illegal to knowingly submit false or fraudulent claims for payment to the federal government. In healthcare cases, this often involves submitting improper Medicare or Medicaid reimbursement claims. Violations can lead to civil penalties, treble damages, and whistleblower lawsuits brought by private individuals under the law's “qui tam” provisions.
Medicaid investigations may take months or even years, depending on the case's complexity, the amount of evidence, and whether they are conducted at the state or federal level.
Federal Anti-Kickback Statute – 42 U.S.C. § 1320a-7b
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving anything of value in exchange for patient referrals or healthcare services paid for by federal programs. Telehealth providers may face kickback allegations if investigators believe referral relationships were financially motivated rather than medically necessary.
Stark Law (Physician Self-Referral Law) – 42 U.S.C. § 1395nn
The Stark Law prohibits physicians from referring Medicare patients to entities for certain healthcare services when the physician or their family member has a financial interest in that entity. Unlike criminal fraud statutes, Stark Law violations are typically civil matters, but they often arise in investigations involving healthcare billing practices.
Wire Fraud – 18 U.S.C. § 1343
Wire fraud occurs when someone uses electronic communications—such as emails, online billing systems, or electronic funds transfers—to carry out a fraudulent scheme. Because telehealth services rely heavily on electronic communication and digital billing systems, wire fraud charges are frequently added to federal healthcare fraud indictments.
Conspiracy to Commit Healthcare Fraud – 18 U.S.C. § 1349
Federal conspiracy law makes it illegal for two or more individuals to agree to commit healthcare fraud or other federal crimes. A person can be charged with conspiracy even if they did not personally submit fraudulent claims, as long as prosecutors believe they agreed to participate in the scheme.
Money Laundering – 18 U.S.C. §§ 1956–1957
Money laundering involves conducting financial transactions to conceal the source of money obtained from unlawful activity. In healthcare fraud cases, prosecutors may allege that defendants transferred or invested fraudulent proceeds through bank accounts, businesses, or real estate to disguise their origin.
False Statements Relating to Healthcare Matters – 18 U.S.C. § 1035
This federal law makes it illegal to knowingly provide false information in connection with healthcare benefit programs. Providers may face charges if investigators believe they made false statements in billing records, patient documentation, or communications with insurers.
Frequently Asked Questions
What is healthcare fraud under 18 U.S.C. § 1347?
Federal definition of healthcare fraud
Healthcare fraud under 18 U.S.C. § 1347 occurs when a person knowingly and willfully executes a scheme to defraud a healthcare benefit program or obtain money or property through false or fraudulent claims submitted to programs such as Medicare, Medicaid, or private insurers.
Why are telehealth providers being investigated for healthcare fraud?
Increased federal scrutiny of telehealth services
Telehealth providers are increasingly investigated because the rapid expansion of remote healthcare services has created complex billing and coding practices. Federal agencies use data analytics to identify unusual billing patterns that may suggest fraudulent claims or improper reimbursements.
What penalties apply for healthcare fraud convictions?
Federal sentencing consequences
A conviction for healthcare fraud can result in severe penalties, including up to 10 years in federal prison per count, significant fines, restitution payments, and exclusion from federal healthcare programs. If serious bodily injury occurs, penalties can increase to 20 years, and if a patient dies, the defendant may face life imprisonment.
Can billing mistakes lead to healthcare fraud charges?
Administrative errors versus criminal intent
Yes. Billing errors or incorrect coding can trigger investigations if regulators believe they represent a pattern of fraudulent claims. However, prosecutors must prove the provider knowingly and willfully engaged in fraud rather than making administrative mistakes.
How do federal investigators detect telehealth fraud?
Use of data analytics and audits
Federal agencies often rely on advanced data analytics to detect unusual billing activity. Providers may be flagged for investigation if they bill significantly more telehealth services or higher-level consultation codes than other providers in the same specialty.
How Will a Good Attorney Defend Against Telehealth Fraud Charges?
A strong defense against healthcare fraud charges involves challenging the prosecution's evidence of intent, demonstrating compliance with billing regulations, and leveraging procedural defenses to protect the provider's rights.
At Eisner Gorin, LLP, our attorneys commonly leverage the following defense strategies as relevant to your case:
Challenging "Knowing and Willful" Intent
The core of many defenses is attacking the element of intent. Since the government must prove you acted "knowingly and willfully," if we can demonstrate that the alleged fraud resulted from confusion, administrative error, or a misunderstanding of complex regulations, the prosecution's case weakens significantly.
To do this, we often present evidence of good faith. This might include proof that you sought advice from billing consultants, utilized compliance software, or attempted to correct errors once they were discovered.
We aim to show that there was no criminal mindset, only a desire to provide care in a complex regulatory environment.
Demonstrating Lack of Fraudulent Action
We also work to validate the legitimacy of the medical services provided. In cases alleging "medically unnecessary" services, we may engage independent medical experts.
These experts can review patient files and testify that your treatment decisions were within the standard of care and medically appropriate for the patient's condition.
Internal audits are another powerful tool. If the government flags 50 "fraudulent" claims, but an internal audit of thousands of your files shows that these were isolated incidents rather than a systemic pattern, it supports the argument that these were mistakes, not a scheme.
Procedural and Evidentiary Challenges
A thorough defense also scrutinizes the government's investigation. We examine whether evidence was obtained legally.
If search warrants were executed improperly or if patient data was seized in violation of privacy laws, we can file motions to suppress that evidence. We also challenge the credibility of government witnesses and the accuracy of the data analytics used to target you.
Relevant Case Study
Despite a federal government raid and serious fraud charges, we fought to have the charges against our client dismissed.
How Our Firm Defends Professionals in High-Stakes Cases
Our firm provides a multi-layered defense strategy, engaging at every stage from initial law enforcement contact through trial and post-conviction matters to protect our clients' careers and futures.
- Early-Stage Intervention: The moment you suspect you are under investigation—or the moment agents arrive at your office—is the moment you need counsel. We engage immediately to manage all communications with federal agents. This prevents you from making inadvertent admissions that could be used against you. Early intervention can sometimes result in charges being reduced or even declined before an indictment is ever filed.
- Comprehensive Case Analysis and Team Model: In complex and high-exposure cases, relying on a single perspective is a risk. We employ a multi-lawyer review process. This team-based model ensures that your case is viewed from every angle. We provide a structured second opinion on strategy, stress-testing our defense theories to ensure they will hold up in federal court.
- Full Support Throughout the Legal Process: We represent clients through every phase of the federal criminal process, from responding to subpoenas and negotiating with prosecutors to defending against charges in court. We also handle appeals and post-conviction relief to mitigate consequences like license revocation or exclusion from federal healthcare programs.
An accusation of healthcare fraud under 18 U.S. Code § 1347 poses a significant threat to a telehealth provider's license, career, and liberty. At Eisner Gorin LLP, our experienced federal defense attorneys work diligently to fight government overreach and ensure your rights are protected and your good name preserved.
To schedule a consultation, call (818) 781-1570 or contact us here.