Medical Frauds Punishment

Medical fraud, also known as health care fraud, is a severe crime with devastating penalties. Beyond the financial impact, a conviction can destroy your reputation and career, especially if you’re a licensed medical professional in Texas. Whether you’re a doctor, pharmacist, nurse or any other healthcare provider, understanding the consequences of medical fraud is essential to protecting your livelihood. At Lype Dest & Smith, we’ve helped medical professionals across Texas defend their licenses and deal with these challenging legal situations. We know what’s at stake, and we’re here to guide you every step of the way.

What is Health Care Fraud?

Medical Frauds Punishment

This term refers generally to intentionally providing false information about health care services to gain financial benefits and often involves exploiting government healthcare programs for illegal payments or services. This is considered a white-collar crime and can happen in several ways. Some of the most common examples of medical fraud include:

• Billing for services that were not performed: When a health care provider submits a claim for treatments or procedures that never occurred.  This is sometimes seen in conjunction with provision of telehealth services.
• Billing for services that were not properly documented: When a service is submitted for payment, but the documentation supporting the charge is either insufficient or entirely falsified.
• Billing for services that are medically unnecessary: When tests and treatments are provided to inflate reimbursement in the absence of medical necessity.
• Prescription fraud:  When prescriptions are issued and/or dispensed that are not based on medical need or are billed for without actually dispensing the medication- often without the patient’s knowledge.  
• Unbundling: When services are billed as individual charges to increase the total amount, rather than as a recognized bundle of services.
• Falsifying a patient’s diagnosis: When a patient is given an unsupported diagnosis to justify expensive or unnecessary treatments.
• Misrepresenting procedures performed: When a more costly procedure is billed for than what was actually performed.
• Accepting improper kickbacks or referrals: The Anti-Kickback Statute (AKS) makes it illegal for medical professionals to receive payments or incentives in exchange for referring patients to other providers or suppliers for services payable by Federal health care programs.  Both the referrer and the entity receiving the referrals are subject to this law.
• Referring patients to entities with whom the physician has a financial relationship:  The Stark Law prohibits physicians from referring patients to receive designated health services payable by Medicaid or Medicare to entities with whom the physician has a financial relationship.  The Stark Law does not require a specific intent on the part of the physician to violate the law.  
• Forging or altering bills or receipts: When a financial document or patient record is altered to mislead insurance companies and increase reimbursement.
• Using someone else’s insurance card or coverage: When another person’s insurance is used to bill for services.  

Government enforcement is aggressive as fraudulent medical practices significantly strain the healthcare system, costing billions of dollars yearly and harming patients. According to the Centers for Medicare & Medicaid Services (CMS), healthcare fraud is not just a financial crime—it’s a public health issue.

Penalties for Medical Fraud

The penalties can be severe and can threaten ongoing practice if you are convicted of medical fraud. Below are some of the most common consequences:

• Prison: A conviction in Federal Court for health care fraud often results in prison time. The average sentence for health care fraud is 27 months, and over 70% of those convicted are incarcerated. The length of the sentence depends on factors like the amount of money involved, whether patient harm occurred, and any prior offenses.
• Fines: Convictions can carry fines up to $25,000, though they can be higher in larger cases and with multiple infractions. These financial sanctions are intended to punish the offender and compensate for the financial losses caused by the fraud.
• Exclusion from Federal Health Care Programs: Those convicted of medical fraud may be barred from participating in federal health care programs such as Medicare and Medicaid. For medical professionals, this exclusion can severely limit your practice, as federal programs make up a significant portion of patient care.
• Loss of Medical License or DEA Registration: A fraud conviction will result in a Texas Medical Board and/or DEA investigation that can result in severe restrictions and potential loss of your medical license or DEA registration.  Your ability to practice medicine and prescribe controlled substances can be greatly affected by a fraud conviction.
• Asset Seizure and Forfeiture: Federal agencies like the DOJ and FBI may seize assets connected to fraudulent activities. In some cases, this can lead to criminal forfeiture, meaning you permanently lose ownership of assets such as property or financial accounts tied to the fraud.
• Anti-Kickback Statute (AKS): Violations of the AKS can result in heavy fines, exclusion from federal programs, and, in severe cases, criminal prosecution.

Facing Healthcare Fraud Charges? 

If you’re a medical professional facing allegations of medical fraud in Texas, the consequences can be overwhelming. We understand the personal and professional toll these accusations take. That’s why Lype Dest & Smith are ready to offer the legal support you need. As experienced Texas Medical Board License Defense Attorneys, we’ve successfully assisted countless healthcare professionals navigate such investigations and manage the effects that healthcare fraud charges can have on their licenses and livelihoods. Contact us today.

Betty Smith

Ms. Smith’s practice focuses on administrative and health care law with a primary emphasis on professional license defense. She has represented numerous clients before various state agencies including the Texas Board of Nursing, Texas Medical Board, Texas Department of Licensing and Regulation, and the Texas Real Estate Commission.

Years of experience: 7 years
Bar number: 24102510 (TX) & 36027 (LA)
Location: Austin, TX
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Dan Lype

Not afraid to go to court when necessary, Dan has successfully litigated cases all the way to the Supreme Court of Texas. Dan also prides himself on being readily available to clients throughout their cases. He strongly believes effective representation should be a collaborative effort between a client and their attorney.

Years of experience: 15 years
Justia Profile: Dan Lype
Bar number: 24065658
Location: Austin, TX