Health insurance fraud is both a federal crime and a state crime. In the state of Pennsylvania, a person who has committed health insurance fraud is subject to both civil penalties and criminal prosecution under the state’s Insurance Fraud Statute. While it is often considered to be a white collar crime, the penalties for health insurance fraud both in Pennsylvania and federally are severe.
The statute specifies stiff financial penalties of $5,000 for the first violation, $10,000 for a second, followed by $15,000 for each additional violation. This means that a healthcare practitioner who bills an insurance company could face a staggering bill for repeatedly perpetrating a billing code fraud.
For example, consider a spine surgeon who administers a physical manipulation to a patient once a week for a period of 6 months, or 26 weeks. If instead of submitting a claim to the insurance company for the service provided the physician fraudulently uses the wrong code, replacing it with the code for a much more expensive spinal injection in order to receive a higher reimbursement, the penalty would add up to $375,000 ($5,000 for the first instance, $10,000 for the second, and $15,000 for each of the 24 instances that follow.) On top of that, the physician would likely have to pay court fees and could face up to 7 years in prison for fraud following criminal prosecution and conviction.
Health insurance fraud can take many different forms. Individuals can perpetrate a fraud against their health insurance company by providing another person with their insurance information and allowing them to use their coverage for health care services. An individual can also commit health insurance fraud by using their health care coverage to pay for prescription medications that their physician did not actually prescribe for them.
Most of the health insurance fraud that comes to the public’s attention is perpetrated by individual healthcare providers, medical practices, and even hospital systems. These fraudulent acts can include:
- Submitting claims to the insurer for medical services, procedures, medications or supplies that were never either delivered or utilized.
- Submitting improperly coded claims billing for services that are more expensive than the services that were actually provided
- Providing and administering services that the patient doesn’t actually need in order to submit higher claims to the insurance company
- Identifying treatments that are generally not covered because they are not considered a medical necessity as medically necessary
- Misrepresenting a patient’s symptoms or diagnosis in order to warrant administering expensive procedures, tests and operations
- Submitting a claim for a multi-step procedure broken down into individual steps and bills in order to increase the amount of the claim
- Requiring a patient to submit a co-pay that is higher than the terms of their coverage spell out
- Paying for the referral of accident victims for treatment
If you are being accused of health insurance fraud and you want to make sure your rights are protected, the white collar criminal defense team from Bochetto & Lentz is ready to assist you today.