In California’s health care industry, workers can have their reputations and careers ruined in a day by fraud allegations. If a provider or patient deliberately submits fraudulent claims to private insurers, Medicare, or Medi-Cal, they can be severely punished by law. If the value of the fraud is more than $950, it can be charged as a wobbler, and the offender may face prison time and hefty fines, sometimes twice the amount of the fraud.

Even minor crimes can lead to county jail terms and fines. Additionally, convictions usually lead to the suspension or revocation of medical licenses, making it impossible for doctors to continue practicing. In such severe cases, legal action should be taken right away. If you face charges, we at Monterey Criminal Attorney can help defend you for the best possible outcome.

Understanding Health Care Fraud

Health care fraud involves using dishonest methods to get money from medical billing. No matter what it is called—such as “billing fraud,” “health insurance fraud,” “HMO fraud,” or “Medicare fraud”—it means intentionally sending false claims to take money from insurance companies or government health programs. It is important to note that this crime applies to nurses, therapists, pharmacists, administrative staff, support personnel, patients, and even corporations that help with fraudulent billing.

When Is It a Crime?

Health care fraud in California is considered a crime under many laws that focus on false claims made to private insurance or Medicaid and Medicare. According to Penal Code 550(a), it is against the law to ask for services that were not provided, submit several claims for the same service, use false documents, or ask for health care benefits you have not used.

Moreover, Health and Safety Code 11153 and 11173 make it a crime to issue prescriptions without a valid reason or to obtain controlled substances by deceiving others. California Welfare and Institutions Code 14107 makes it a more serious crime to commit fraud against Medi-Cal, and offenders can be fined and sentenced to up to five years in prison.

Elements of the Offense

For a person to be found guilty of health care fraud in California, prosecutors must demonstrate that they committed the act and had the required mental state. All these elements must come together to form the “union of act and intent” as required by California law.

Actus Reus: Scheme to Defraud

Actus reus refers to actions that help carry out the fraudulent plan. This means presenting false claims, preparing or signing fake documents, billing for services not given, or filing the same claim more than once. According to Penal Code 550(a)(1)–(9), it is against the law to submit false or multiple claims, use false documents to prove them, or present unused health care benefits as claims.

Mens Rea: Knowledge and Intent

  • Knowledge of the Scheme

The defendant had to know that the claim or document was false. To secure a conviction, prosecutors must show the defendant was aware that the claim was fraudulent.

  • False Pretenses

Examples of these tricks are upcoding services or creating fake receipts to make the victim pay. Fake pretenses must be made to get benefits.

  • Intent to Defraud

For this crime, the defendant must have intended to trick the payer or insurer to get something valuable. The prosecution must prove that he intended to do what he did at the time of the act.

Common Types of Health Care Fraud

Submitting Claims for Services Not Delivered

If a provider bills for services not provided, it is considered one of the clearest fraud cases. This is when someone submits a claim for services, appointments, or equipment not supported by documentation. Missing records, no logs, and missing signatures are usually how auditors spot the fraud, but insurers are still paid for the services (Medicare fraud also includes “phantom billing”).

  • Billing for Unrendered Services”

This subtype includes sending insurance documents that show services or visits that did not happen. Some providers might sign for clinicians or make up session logs to support the claim, even if the sessions did not occur.

Upcoding of Services

When a provider bills for services at a higher level than what was provided, it is known as upcoding. Providers can use fake codes to receive more money from Medicare, Medicaid, or private insurers. Experts believe that about 7.5 percent of Medicare payments are affected by improper code reporting, which amounts to approximately $30 billion yearly, mainly because of upcoding.

Making small changes to billing codes can result in severe consequences. This is considered upcoding if you charge for a 60-minute consultation that only lasts 15 minutes. This fraud goes against the False Claims Act and can lead to substantial settlements, as shown when Prime Healthcare paid $65 million for claims involving overstated diagnoses.

Multiple Claims

Submitting several claims for the same service is considered double billing, and it is a fraudulent practice. Some providers may change the dates or numbers on their claims to make it harder to notice they are sending the same information twice. This overcharging is against the law and is often found in false claims.

An illustrative example is when you request separate payment for a CT scan included in a bundled service. If a provider bills twice for the same test, using a different date or code, they can get paid for the same procedure.

Submitting Undercharges Without Overcharges

With this fraud, individuals claim late refunds for past undercharges but do not address the earlier overcharges. They do this to balance things, not mentioning the earlier $150 overcharge while asking for payment of the $200 undercharge, hoping it will go unnoticed.

Claiming that clerical error caused the omission of prior overpayment information is not believable. California makes it illegal to do this because reimbursement is allowed only if the information is fully and truthfully disclosed under Penal Code 550a.

Superfluous Issuance of Prescriptions

Fraud may also happen if a doctor gives out prescriptions that are not needed. Distributing controlled substances in excess or giving prescriptions for unapproved reasons is against Health and Safety Code 11153 and 11173. As a result, providers and patients may be charged with health care fraud.

Presenting False Health Care Claims

This happens when someone uses fake or stolen claim forms to make fraudulent claims. Whether they copy official forms or create counterfeit documents, providers use these to get benefits. California law considers it a crime to provide any false “writing in support of a fraudulent claim” under Penal Code 550a.

Preparing Supportive Evidence for Fraud

Using fake charts, receipts, entrance logs, or doctor’s notes is key to committing health care fraud. The evidence assists in covering up fraudulent activities and supporting these schemes. According to the courts, it is illegal to make such supporting evidence knowing it is false.

Investigation and Enforcement of Health Care Fraud Cases

Investigation and enforcement involve the methods used to find and prosecute health care fraud cases in federal, state, and local areas, as well as the legal tools available to investigators.

Federal Agencies

The DOJ’s Health Care Fraud Unit leads enforcement efforts nationwide and usually teams up with the DOJ’s Health Care Fraud Strike Force, which has prosecutors, data analysts, and agents from the HHS-OIG, FBI, and DEA. In 2024, the DOJ brought charges against 193 people, including 76 medical professionals, in 32 federal districts for attempting to receive $2.75 billion in false claims and seized over $231 million in assets.

HHS-OIG supports these efforts using specialized Strike Force teams that use data and quick legal moves, resulting in the shutdown of schemes worth more than $4.7 billion by 2022. The FBI investigates those who steal from federal and private systems, estimating that their actions cause losses of tens of billions each year, and works with insurance companies to find fraud. At the same time, the DEA works on cases where drugs are prescribed or distributed illegally.

State and Local Agencies

The California Attorney General’s Division of Medi-Cal Fraud & Elder Abuse (MFD/EA) prosecutes cases of abuse and false claims in the Medi-Cal system. Over FY 2021–2023, the agency recovered $544 million. These state units work under federal rules, and teams of lawyers, investigators, and auditors ensure that providers are held accountable. The Bureau of Investigation in the California Department of Justice sends its elite agents to assist in prosecuting complex fraud cases across the state.

Triggers and Tools

An essential aspect of preventing health care fraud is when people report it themselves or through their employers. If someone reports fraud through the HHS-OIG hotline, it can lead to a formal investigation. Once leads are created, authorities use search warrants, grand jury subpoenas, grand jury target letters, and civil investigative demands to collect evidence and require testimony. With these tools, authorities can check for hidden billing and take legal action against those responsible.

Penalties, Punishment, and Sentencing of Health Care Fraud

Here, we discuss the consequences of health care fraud on both the state and federal levels. It covers the whole range of punishments, from short sentences in county jail to many years in prison and the loss of professional licenses.

California Penal Code 550a Penalties

California Penal Code 550(a) considers health care fraud a wobbler, meaning the offense’s level depends on the amount of money involved.

  • Misdemeanor (up to $950)

The charge is considered a misdemeanor when the total amount of false claims is $950 or less. A person convicted of this crime may face up to six months in county jail or a fine of up to $1,000.

  • Wobbler (Above $950)

If the amount of fraud is more than $950, the prosecution can select whether to charge a misdemeanor or a felony. A misdemeanor can result in a year in county jail and/or a fine of up to $10,000. If convicted of a felony, the consequences are much more serious, with a prison sentence of two to five years and a fine that may reach $50,000 or the total amount of the fraud, whichever is greater.

  • Felony

If someone is found guilty of health care fraud under 550(a), they may be sentenced to up to five years in prison. Fines may be as high as $50,000 or twice the amount of the fraud, whichever is more.

Federal Penalties

If someone executes a scheme to defraud a health care benefit program under 18 U.S.C. § 1347, they may face severe penalties from the federal government.

If you are convicted for the first time, you could be sentenced to 10 years in federal prison and must pay hefty fines. However, if fraud causes serious harm to a person’s body, the maximum time of imprisonment is 20 years. Sentences for cases that result in a patient’s death may result in life imprisonment.

In addition to criminal penalties, people may face civil and administrative fines, including triple damages and fines for each claim under the False Claims Act, and be barred from federal healthcare programs.

Professional Consequences

No matter what type of health care fraud is charged, a conviction can seriously affect a person’s career. There is a risk that medical professionals could have their license suspended or revoked. Anyone with a federal conviction may be prevented from using Medicare and Medicaid, which stops them from working or billing in those systems.

Fighting Health Care Fraud Charges

This section outlines the main steps to defend against health care fraud. The steps include:

Early Case Evaluation

When you learn about a possible fraud probe, you should act quickly. Legal representation as soon as possible helps prevent investigators from accessing private information without challenge.

Experienced attorneys often stop allegations from becoming formal charges by noticing if procedures or constitutional rights have been violated early on. Early involvement by a lawyer ensures client discussions are secure and allows the defender to guide on evidence storage and internal audits before compliance is at risk.

Building a Defense Strategy

A strong defense is built by examining the evidence and finding weaknesses in the prosecution’s case. Experienced lawyers examine medical records, billing information, and audit procedures to find any problems. They dispute the use of statistical sampling, doubt the validity of expert witnesses, and highlight mistakes in government audits. Defense strategies can also point out that errors were made accidentally, not intentionally.

The Process of Defense Hearings

Some health care fraud cases are settled in one session, while others take several hearings because of their complexity. Before the trial, lawyers may argue that evidence gathered illegally or through coercion should not be allowed. As the hearing continues, attorneys ensure that witnesses are credible: they prepare experts to explain billing, consult medical professionals to confirm the need for care, and prepare character witnesses to support the person’s integrity.

California Penal Code 550(a)

California law includes health care fraud in its targeting of fraudulent insurance claims. A charge under this statute may be a misdemeanor or a felony, depending on the situation and the amount of money involved.

Prohibited Acts

It is against the law to submit or assist in submitting a false or fraudulent request for payment or benefits under an insurance contract, including health care benefits, as stated in 550(a). The law forbids people from requesting reimbursement for services they didn’t use, filing several claims for one benefit, or lying to get reimbursement. It is also illegal to present several claims, even to different insurers, to defraud them. Even if fraudulent claims are not paid, using or making fake documents to support them is still against the law.

What is “Intent to Defraud”?

Under Section 550(a), the defendant must have purposely tried to trick another party into losing money, goods, services, or property value. Even if the claim is technically incorrect, California courts require proof of intent to defraud before a crime can be found.

Workers’ Compensation Benefits

Under paragraph (a)(10) of the statute, workers’ compensation health care claims are included. So, when someone makes false or repeated claims for workers’ comp-related medical treatment, the same laws apply. Both providers and claimants can be charged with fraud under 550(a) if they defraud workers’ compensation systems.

Legal Defenses to a Health Care Fraud Charge

This section examines the primary defenses that can be used in health care fraud cases. Every defense focuses on one of the main parts of the prosecution’s job: knowing the facts, intending the action, following constitutional rules, or being coerced.

No Knowledge

A valid defense occurs if the defendant did not realize the fraudulent claim or documents. In California, the defendant must be proven to have found the claim invalid. If the prosecution lacks this information, they may not prove mens rea, and the case could not proceed. If, for instance, a clerk made a mistake in billing because they thought they were following the rules, this might not be considered a crime.

There Was No Intent To Defraud

A person is not liable for a false claim unless they intended to deceive. Fraud involves a conscious effort to mislead someone or gain personal benefit. Courts have agreed that errors in billing systems do not necessarily suggest criminal intent. Often, attorneys argue that mistakes were caused by misunderstanding the system, not being adequately trained, or poor communication, not by any intentional misconduct. If the prosecution does not prove intent, their case becomes much weaker.

Constitutional Violations

Defendants can challenge critical evidence if they believe the authorities violated their rights. If a person is questioned in custody without being told their rights, the statements made can be excluded from the trial under the Fifth Amendment. Also, evidence obtained by threatening or depriving someone is prohibited in court. The Fourth Amendment also states that any evidence gathered illegally during a search or seizure cannot be used in court; this rule was established in Brown v. Illinois, and Dunaway was a case about the Fourth Amendment. New York. Because of these protections, simple mistakes in the process can still stop a strong case of fraud.

You Acted Under Duress

A defendant can claim duress if they can prove that they acted under immediate and illegal pressure with no other option. Courts recognize that when someone is forced by threat, they may be unable to form criminal intent. Regarding health care fraud, if someone acts illegally at a superior's direction, duress can be used to avoid being held criminally responsible.

Related Offenses

This part of the guide examines laws in California that deal with health care fraud, including fraud related to Medi-Cal eligibility, providers, workers' compensation, and prescription/drug schemes. Every type of disaster brings its risks and consequences that can affect many people in the same way.

Medical Fraud, WIC 14107 & 14107.2

Welfare & Institutions Code 14107(b)(2) states that lying about or falsifying information to get Medi-Cal is considered eligibility fraud. If the amount requested for reimbursement is high, they may be charged with a felony, but if it is low, they may be charged with a misdemeanor.

According to Section 14107.2, providers can be held responsible for giving or receiving kickbacks, bribes, or referral payments against the law. A first offense may be considered a misdemeanor or a felony, but if you commit the crime again, you will be charged with a felony and could face jail time of 16 months to three years.

Workers’ Compensation Fraud

Workers’ compensation fraud is committed when people lie about their job-related injuries or situations to get or avoid benefits. Under Penal Code 550(a)(10), these fraudulent workers' comp claims are handled with the same rules as health care fraud, and the charges can be either misdemeanors or felonies based on the amount involved.

Prescription Fraud, HS 11153 & 11173

As stated in Health & Safety Code 11173, patients are not allowed to get controlled substances by doctor shopping or lying. This involves making fake prescriptions, pretending to be a doctor, or getting several prescriptions without telling the truth. For misdemeanors, the penalty can be up to one year in county jail, while for felonies, it can be up to three years in state prison.

Health & Safety Code 11153 makes it illegal to prescribe controlled substances for reasons other than a proper medical purpose. For instance, it is not allowed to write prescriptions for people who are addicted or for non-medical purposes. It is considered a “wobbler” because it can be charged as a misdemeanor with up to one year in jail and $20,000 in fines or a felony with up to three years in state prison.

Find a Fraud Crimes Defense Attorney Near Me

You should know federal and state laws to handle health care fraud allegations. You should also have practical knowledge of Medicare rules, how to bill, and how health care systems are regulated. However, healthcare fraud attorneys are there to help defend you if you are facing these charges. Attorneys specializing in health care fraud can examine the prosecution’s case, dispute forensic billing, and build defenses based on specific legal details. They can achieve better results because they better understand health care rules, whistleblower claims, and state fraud laws than general counsel.

At Monterey Criminal Attorney, we provide thorough defense, including a prompt review of the case, effective representation, and strong negotiation or trial efforts. Contact us now at 831-574-1791 to set up a free consultation and protect your future and reputation.