Last Updated on: 20th October 2023, 11:47 am

How Federal Defense Lawyers Handle Medicare and Medicaid Fraud Cases

Defending clients accused of Medicare or Medicaid fraud can be a complex and challenging area for federal defense attorneys. With the government cracking down on healthcare fraud in recent years, charges of defrauding federal health programs have become more common. So how exactly do federal defense lawyers approach these types of cases?

First, it’s important to understand the basics of Medicare and Medicaid fraud. This type of fraud typically involves schemes to illicitly bill the government health programs for services that were never provided, were unnecessary, or were more expensive than what was actually done. Some examples include billing for medical equipment that patients didn’t need, upcoding services to get higher reimbursements, paying kickbacks for patient referrals, or using a patient’s information to bill for services they never got.

The consequences for Medicare or Medicaid fraud can be severe. The government often seeks tough criminal penalties like prison time and massive fines. For example, each fraudulent claim can be charged as a felony under federal law, carrying up to 10 years in prison. Healthcare providers or executives can also face exclusion from federal health programs entirely.

Understanding the Elements of the Crime

In defending Medicare fraud cases, lawyers first aim to understand exactly what conduct their client is accused of, and whether it fits the elements required to prove fraud. The main federal law is the False Claims Act, which makes it illegal to knowingly submit false claims for payment to the government. Prosecutors must show the claims were objectively false or fraudulent, and that the defendant knew they were false or acted with “reckless disregard” of their truth or falsity.¹

Often, the alleged fraud involves complicated billing practices and medical coding that can be ambiguous. The defense may argue the claims were actually valid under a reasonable interpretation of the rules. Or they may say a doctor lacked the intent to defraud Medicare if there was a good faith basis for their billing practices.

Attacking the Evidence

Federal prosecutors rely heavily on documentary evidence to prove Medicare/Medicaid fraud schemes. This includes medical records, billing records, patient files, and financial statements. Defense lawyers will meticulously review this evidence to identify potential weaknesses in the government’s case.

For example, if the prosecution alleges certain medical services were not actually provided, the defense will examine the corresponding medical records for any documentation showing otherwise. Or if the government claims patient records were falsified to justify unnecessary procedures, the defense will look for factual support that the procedures were medically warranted.

Oftentimes prosecutors will use statistical sampling and extrapolation to calculate total damages, rather than reviewing every single patient file. The defense may argue this methodology is flawed and exaggerates the scope of the alleged fraud.

Questioning Witness Credibility

Cases of Medicare/Medicaid fraud often rely on testimony from cooperating witnesses who have “flipped” against the defendant in exchange for leniency. Typically these are former employees or partners testifying about instructions to falsify records or bill improperly. The defense will closely scrutinize the background of these witnesses to undermine their credibility.

For example, if a witness has their own history of dishonesty or criminal conduct, the defense can argue they cannot be trusted. Or if a witness has made inconsistent statements, that may call their entire account into question. Oftentimes witnesses have strong incentives to fabricate allegations against the defendant to help their own case.

Focusing on a Lack of Knowledge or Intent

Since fraud requires intent, the defense will work to show the defendant did not knowingly try to deceive Medicare or Medicaid. In complex corporate healthcare settings, executives can claim they were unaware of improper billing by lower-level employees. Doctors may argue they reasonably relied on billing personnel to handle claim submissions accurately.

The defense may shift blame to third-party medical coders who actually submitted the false claims unbeknownst to the defendant. They may also highlight the defendant’s lack of financial motive, good faith efforts to comply with rules, and any corrective actions taken upon discovering billing irregularities.

Negotiating Plea Deals or Settlements

If a conviction at trial appears likely, the defense will often negotiate a plea deal or settlement to minimize penalties. In health fraud cases, deals may require repaying funds, paying additional fines, and agreeing to compliance measures. Settlements avoid admitting guilt and may allow the defendant to continue participating in federal health programs. Deals can range from misdemeanors with probation to reduced felonies with little to no prison time.

Avoiding Program Exclusion

One of the worst penalties for healthcare providers convicted of Medicare/Medicaid fraud is exclusion from federal health programs. This is essentially a professional death sentence for doctors, nurses, clinics and healthcare companies that rely on this funding. Even if a plea deal is reached, the Department of Health and Human Services can still pursue exclusion based on the fraudulent conduct.

Avoiding program exclusion is a top priority for defense lawyers in negotiating pleas or settlements. This may require demonstrating the defendant’s conduct was an isolated incident, emphasizing compliance measures, and expressing contrition. The defense highlights factors weighing against exclusion, like harm to innocent patients from losing access to the provider.

Utilizing Consultant Experts

Given the highly complex nature of medical billing rules and regulations, defense teams often consult experts like retired Medicare auditors, fraud investigators, or specialized medical coders. These consultants can critically review the prosecution’s theory of fraud and determine if the claims in question were actually legitimate.

Their analysis may reveal flaws in the government’s statistical methods. Consultants can also opine on whether billing errors resulted from innocent mistakes rather than intentional deception. Their expertise lends credibility in rebutting allegations of fraud.

Stressing Unclear or Evolving Rules

Billing rules for federal health programs are both dense and constantly changing. This provides opportunities for the defense to argue a defendant’s billing practices were permissible under reasonable interpretations of unclear regulations. Or they may claim the rules related to a certain procedure were modified midway through the period in question, unbeknownst to the defendant.

While prosecutors argue it is a provider’s responsibility to keep abreast of billing requirements, defense lawyers can often muddy the waters by identifying ambiguities. They may also emphasize how the government routinely issues clarifications and guidance around new or complex rules.

Getting Charges Dismissed

In the best case scenario, the defense can win a motion to dismiss some or all charges prior to trial based on fatal defects in the prosecution’s case. For instance, if critical evidence was obtained improperly, the defense can argue for exclusion of that evidence leading to dismissal. Or if the statute of limitations has expired for certain charges, those counts may be dismissed.

Early in the case, the defense may also petition the court to dismiss the indictment entirely due to insufficient evidence establishing probable cause of fraud. While challenging to win, dismissal motions provide opportunities to end charges without going to trial.

Taking Cases to Trial

If charges cannot be dismissed through pretrial motions, the case may ultimately go to trial. The defense will aim to create reasonable doubt in jurors’ minds by questioning the credibility of witnesses and the reliability of the government’s evidence. Defense lawyers will emphasize the prosecution’s burden to prove each element of fraud beyond a reasonable doubt.

Success at trial often turns on effective expert witnesses for the defense who can rebut the government’s allegations and provide alternative explanations. Even if an acquittal seems unlikely, the defense may proceed to trial in hopes of a hung jury. Otherwise, they can set the stage for strong appeals arguments challenging evidentiary rulings or jury instructions.

Pursuing Appeals

For defendants convicted at trial, the defense will likely pursue appeals to overturn the verdict or reduce the sentence. Arguments may include insufficient evidence, improper exclusion or admission of evidence, flawed jury instructions, prosecutorial misconduct, and excessive sentences.

At the appellate level, the legal team will thoroughly comb the trial record for appealable errors made by the judge or prosecution. Statistical sampling methods used to calculate damages may also come under scrutiny on appeal. And ineffective assistance of counsel claims can be raised if the trial lawyers failed to make critical arguments or objections.

Navigating Parallel Civil Cases

Medicare/Medicaid fraud allegations often spawn parallel civil whistleblower lawsuits under the False Claims Act. These cases involve substantial potential damages and liability under a lower standard of proof than criminal charges. The defense aims to leverage the civil case to help mitigate criminal prosecution using joint defense and settlement strategies.

Information obtained during civil discovery may aid the criminal defense, while concessions won in negotiating civil damages can persuade prosecutors to drop criminal charges. Civil settlements also avoid the collateral consequences of criminal convictions like exclusion from federal health programs.

Emphasizing Collateral Consequences

Beyond fines and imprisonment, convictions for Medicare/Medicaid fraud carry severe collateral consequences spanning reputational harm, professional discipline, job loss, and financial ruin. Defense lawyers emphasize these consequences to prosecutors in pursuing plea deals allowing defendants to avoid some of the most serious penalties.

They argue clients have already suffered major losses from long investigations, suspended licenses, damaged careers, and exclusion from healthcare programs. These factors provide leverage in negotiating resolutions that avoid the harshest outcomes and allow defendants to move on with their lives.

Takeaways

Defending Medicare and Medicaid fraud cases requires understanding the complex web of regulations governing federal health programs. Lawyers aim to identify technical defects in the prosecution’s legal theories and evidence of fraud. They also leverage weaknesses in witness credibility, gaps in the defendant’s intent or knowledge, and ambiguities in evolving rules.

Though convictions are common, skilled federal defense lawyers can often achieve favorable plea deals or settlements that avoid the most severe penalties. Dismissals, acquittals, and appeals provide opportunities to defeat or reduce charges. Ultimately, effective advocacy requires creativity, meticulous preparation, and a nimble negotiation strategy.