Healthcare Fraud Defense Alert
The Stakes of a Healthcare Fraud Investigation Not Going In Your Favor? The Information Below Can Avoid Jail Time and Hefty Fines.
Facing a federal investigation or federal indictment for healthcare fraud can be your company’s most critical legal challenge. Whether you are a hospital, pharmaceutical firm, physician practice group, or durable medical equipment provider, federal law enforcement agencies such as the Department of Justice (DOJ), Health and Human Services Office of Inspector General (HHS-OIG), and FBI treat these allegations with utmost seriousness.
Although you may wonder why in criminal cases, the old saying that you are innocent until proven guilty is not reflected by the government’s s search warrants, investigations and criminal justice process may not seem fair, the reality is that the government does have a right to investigate healthcare fraud cases and any whistleblower (Qui Tam) reporting.
Healthcare fraud investigations of your company are not limited to isolated billing disputes. They often span years of operations, thousands of records, and millions in federal healthcare dollars.
If your company or practice is under scrutiny, the first thing to understand is the scope and investigative and indictment power of the federal agencies involved.
Federal prosecutors have access to whistleblower filings (qui tam lawsuits), audit data from Medicare and Medicaid, and enhanced data-mining tools that flag suspicious billing patterns. Often, by the time you are contacted, the federal government has already built a preliminary case against you. Healthcare fraud Investigations can lead to civil penalties under the False Claims Act (FCA), or, in more serious cases, federal criminal charges such as healthcare fraud (18 USC 1347), conspiracy (18 USC 371), or wire fraud charges (18 USC 1343).
At Watson & Associates, LLC, our federal healthcare fraud attorneys provide critical legal guidance and defense strategies for healthcare companies under investigation or federal criminal indictment. We understand the gravity of these situations and approach each matter with precision, discretion, and a client-centered strategy.
This information attempts to answer the common questions you may ask when you first hear you are being investigated or criminally charged — including what steps to take, how to protect your business, and how to prepare for federal defense.
Many organizations make the mistake of waiting too long to call defense counsel. The earlier you consult a healthcare fraud defense attorney, the more options you have to respond strategically and stand a chance of successfully prevailing.
At Watson & Associates law firm, we know that healthcare criminal charges are not just business issues — they are also personal and impact your future. Federal healthcare fraud charges can damage your professional license, reputation, and the livelihood of everyone who works with you.
We encourage our clients to treat any communication from the DOJ, OIG, or HHS as the beginning of a high-stakes process — one that requires strong legal guidance, a clear understanding of risk, and the confidence to act quickly.
We are positioned to work with national clients who first realized they were under scrutiny when they received a visit from federal agents, a grand jury subpoena, or a civil investigative demand from the DOJ.
In some cases, they had no idea a whistleblower complaint had been filed (normally, you will bot because such lawsuits are filed under seal).
Many worry about what this means for their professional license, their billing privileges, and even their personal freedom. These are not abstract concerns — they’re real and immediate concerns.
Our law firm takes more of a different approach than most due to our ability to tailor legal strategies to the current phase of your case.
- There is no templated approach to your case
- We develop a unique plan of action to your specific facts
- We literally build a specific legal defense team to deal with your case
Are you still being investigated? Is your name on a qui tam filing? Are you responding to a subpoena or facing grand jury questions? Or have you already been indicted? We help clients understand what they are facing — and what actions must be taken now to control the damage and protect the future.
Understanding Healthcare Fraud Allegations – What is Healthcare Fraud?
Healthcare fraud is broadly defined as knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or to obtain by false pretenses any money or property owned by a healthcare program. This can apply to Medicare, Medicaid, TRICARE, or other government-funded healthcare plans.
Common healthcare fraud allegations include:- Submitting claims for services not rendered; Upcoding or unbundling billing codes; Providing unnecessary services; Falsifying medical records; Kickbacks or illegal referral arrangements; and Failing to return overpayments.
These formal accusations of alleged federal crimes can arise from whistleblower reports (qui tam actions), audits, competitor complaints, or internal government data analysis. It’s critical to understand that you don’t have to actually commit fraud to be investigated.
Even honest mistakes in billing, poor documentation, or loosely structured physician agreements can trigger an enforcement action.
If your healthcare business is receiving document requests, subpoenas, or has been named in a civil investigative demand (CID), it is vital to seek legal counsel early. Early action can protect the integrity of your business and minimize legal and financial exposure.
Common Healthcare Fraud Charges Under Federal Law
Several federal statutes govern healthcare fraud and are frequently used in criminal and civil cases including:
The False Claims Act (31 USC 3729–3733): This law allows the federal government to pursue you or your company if you knowingly submit false or fraudulent claims to government healthcare programs.
Civil and Criminal False Claims Act Penalties can include treble damages and civil fines exceeding $25,000 per claim.*
Anti-Kickback Statute (42 USC 320a-7b). This federal criminal statute prohibits offering, paying, soliciting, or receiving anything of value to induce or reward referrals or generate federal healthcare program business. Criminal convictions can result in felony charges, exclusion from federal programs, and up to 10 years in prison.
Stark Law (42 U.S.C. § 1395nn). This is a strict liability statute that prohibits physicians from referring patients for certain designated services payable by Medicare or Medicaid if the physician has a financial relationship with the entity. Penalties include fines and exclusion.
Healthcare Fraud (18 USC 1347) A criminal statute that makes it illegal to knowingly execute a scheme to defraud any healthcare benefit program. It carries up to 10 years in prison, or 20 years if it results in serious bodily injury.
Conspiracy (18 USC 371). Frequently added to fraud indictments, conspiracy charges involve two or more persons working together to commit healthcare fraud.
Wire Fraud (18 USC1343).Use of email, telephone, or internet to commit fraud can trigger additional felony charges.A single healthcare fraud investigation can implicate multiple statutes, significantly raising the stakes for a defendant.
Healthcare Fraud Investigation Defense Strategies
If your company is under federal investigation, what you do in the next two weeks can have a lasting impact. Healthcare fraud investigation defense strategies should begin with preserving evidence, ensuring staff do not communicate with investigators without retaining legal counsel, and evaluating your legal and financial exposure internally.
Key strategies include:
Early hiring legal defense counsel: Retain legal counsel and healthcare fraud defense attorneys immediately. They will communicate with government lawyers, analyze subpoenas or document requests, and manage your criminal and financial exposure.
Internal audits: Conduct internal investigations using outside counsel to assess compliance history and documentation.
Proactive disclosure (if appropriate): In some cases, voluntary self-disclosure can mitigate potential penalties.
Training and compliance review: Reinforce your internal compliance policies to prevent future exposure. Most importantly, never assume the investigation will quietly go away. Whether you are a hospital billing administrator, medical device company CEO, or pharmacy owner, the government is likely already deep into its probe.
Another important consideration is communication management. Staff members who are unaware of their rights may unintentionally harm the company’s position.
It’s vital to centralize all communication through your legal team and ensure that employees are instructed not to respond to investigators without legal clearance. This helps avoid potential obstruction or misinformation claims and protects the integrity of your defense.
How to Respond to a Healthcare Fraud Indictment?
Receiving a federal indictment for healthcare fraud signals that the government believes it has probable cause to charge your company or executives with criminal conduct. They intend to take the case to trial and get a jury to convict you.
Note: An indictment does not mean you are guilty. Instead, it only means that the prosecutor had put forth enough evidence to go to trial. The prosecution must now start preparing for trial to provide your guilt anew.
The first step is to consult with legal counsel who understands both the civil and criminal components of healthcare fraud.
As your healthcare defense attorney, we will: Review the indictment’s factual and legal allegations
– Analyze the evidence gathered via grand jury subpoenas
– Prepare for arraignment and negotiate conditions of release
– Develop an early trial strategy and interface with federal prosecutorsIt’s essential not to panic.
Federal healthcare fraud Indictments are legal accusations, not convictions. With a strategic response and experienced legal representation, you can challenge the evidence, suppress illegal searches or seizures, and even move for dismissal if the indictment lacks legal sufficiency.
Your company’s future and your personal freedom may be at stake. Watson & Associates, LLC can help you move decisively and wisely in the days following an indictment.
Legal Steps After Being Charged with Medical Fraud
If you or your healthcare business has been formally charged with medical fraud, timing is critical. Charges under federal criminal statutes trigger a myriad of legal processes
— from arraignment to discovery, plea negotiations, and potential trial.
It’s natural to ask: What are the first legal steps after being charged with healthcare fraud?
Step 1: Review the Charging Documents and Understand what you are being accused of. Are the charges based on billing irregularities? Are kickbacks or referrals implicated? An in-depth understanding of the government’s theory helps your legal team formulate a defense.
Step 2: Secure Legal Counsel. Federal healthcare fraud charges are not handled by general criminal attorneys. You need lawyers experienced in federal healthcare law in addition to federal criminal defense.
Step 3: Protect Your Constitutional Rights. Do not speak to investigators without legal counsel. Do not delete or alter documents. These actions can lead to obstruction charges.
Step 4: Start Building Your Legal Defense. Your lawyers will investigate internal billing systems, compliance training history, and contracts. In some cases, expert witnesses in billing or medical coding may be used to challenge the government’s allegations.
These early steps can dramatically affect the outcome of your case. It is also wise to begin reputational planning. Even if you’re not convicted, public records of federal charges can harm your business relationships and insurance contracts.
Consider working with legal counsel who can coordinate with PR professionals when needed to manage press inquiries and minimize negative exposure.
Defense Strategies for Healthcare Providers Under Investigation
Providers under healthcare fraud investigation often ask:
How do I defend myself if I didn’t intend to commit fraud?
Intent is a key element in criminal fraud cases. One of the strongest defense strategies is to demonstrate lack of intent and the existence of good-faith efforts to comply with federal healthcare regulations.
Key Defense Tools:
- Robust compliance program: Evidence that your organization had clear policies, training, and auditing practices.
- Industry-standard billing practices: Showing that your practices align with accepted norms.
- Legal review of contracts: Proving that financial relationships were reviewed by counsel and structured to comply.
- Documented efforts to self-correct: Demonstrating that when issues were identified, the action was taken promptly Being proactive and transparent (within the bounds of legal advice) can be beneficial.
The earlier you retain legal counsel, the better prepared you’ll be to defend your healthcare practice.
Another underappreciated strategy is to identify inconsistencies or assumptions in the government’s data analysis.
For example, many medical fraud accusations hinge on extrapolated billing data or flawed audit sampling. If your legal team can challenge the statistical model or show that the outliers were explainable and documented, it can weaken the foundation of the government’s case.
Healthcare providers should also review all written policies, provider agreements, and credentialing forms. If you followed your legal team’s advice or industry guidance when structuring your business, your team may argue that good-faith reliance reduces culpability — even if errors occur.
False Claims Act Defense for Pharmaceutical Companies
Pharmaceutical companies face intense scrutiny under the False Claims Act Allegations often involve pricing, marketing misrepresentations, or relationships with third-party providers.
Common Allegations:- Off-label marketing that leads to reimbursement submissions- Overcharging government programs or inflating Average Wholesale Price (AWP)- Illegal rebates, discounts, or referral arrangements
Effective Defense Strategies:- Demonstrate that marketing claims were FDA-compliant- Show good-faith reliance on legal advice or guidance from regulators- Argue lack of causation (e.g., that company conduct did not directly cause false claims to be submitted) FCA cases can be devastating financially, with treble damages and per-claim penalties. Quick legal response and document preservation are vital.
Anti-Kickback Statute Violation Defense for Hospitals
Hospitals under investigation for Anti-Kickback Statute (AKS) violations must act quickly. These violations can trigger both serious and expensive civil and criminal liability — and often lead to False Claims Act exposure.
What Triggers AKS Scrutiny?
Employment contracts with physicians- Consulting fees paid to referral sources- Use of vendors or marketers compensated on volume
Building a Legal Defense:- Rely on statutory safe harbors (e.g., for bona fide employment)- Document compliance training and legal vetting of agreements- Show absence of corrupt intent Hospitals that demonstrate thorough review and good faith often fare better when dealing with the DOJ or OIG.
One of the most common AKS defenses is to show that arrangements fit within a regulatory safe harbor. Hospitals that contract with physicians, marketers, or vendors should ensure those arrangements are vetted by counsel and properly structured.
If the compensation was at fair market value, unrelated to referral volume, and documented, those facts can form the foundation of a strong defense. In some cases, prosecutors may misunderstand how hospital groups compensate team members — particularly when shared bonuses or departmental incentives are involved.
Your healthcare fraud defense law firm can clarify how performance is measured and how decisions are made within regulatory frameworks.
Stark Law Compliance and Defense Strategies
Unlike the AKS, the Stark Law is a strict liability statute — intent does not matter. That makes compliance especially important for group practices, imaging centers, and physician-owned hospitals.
Defending Against Stark Violations:
- Demonstrate compliance with statutory exceptions (e.g., in-office ancillary services)
- Use fair market value analyses to support compensation arrangements
- Provide contemporaneous documentation of referrals and financial relationships. If you’re under audit or facing repayment demands tied to Stark issues, working with a legal team early is essential.
Physician practices and imaging centers often find themselves in Stark Law audits due to poorly documented financial relationships. CMS auditors and OIG investigators scrutinize whether referrals are tied to improper incentives, even when no harm was intended.
One strategy is to retain valuation experts who can demonstrate that physician compensation was set at fair market value and in line with regulatory guidelines.
Additionally, organizations should review leases, employment agreements, and group practice structures to verify compliance with in-office ancillary services and other exceptions.
The burden of proof lies with the provider — and negligent or careless recordkeeping can tip the scales in favor of federal enforcement agencies.
It’s not uncommon for enforcement agencies to allege violations even when referral relationships were reviewed by compliance officers. In these cases, your attorney can argue that your actions were reasonable under the circumstances and supported by industry guidance.
Federal Courts have sometimes ruled that complex laws like the Stark Law — with over 30 regulatory exceptions — require flexibility in interpretation.
In defending against civil or criminal actions, your legal defense team may also highlight that any technical violations did not result in harm to patients or federal programs, and that your organization acted in good faith.
As with all healthcare fraud charges, context, documentation, and compliance culture can influence the outcome.
Medicare Fraud Defense for Doctors and Clinics
Medicare fraud allegations against physicians and clinics are among the most common healthcare fraud investigations. Doctors often ask: How do I prove I didn’t commit Medicare fraud?
Common Allegations:
- Billing for services not rendered-
- Upcoding or unbundling procedures-
- Submitting claims without proper documentation
- Ordering unnecessary tests or equipment
Strategic Defenses:
Use of expert medical witnesses to verify that services were medically necessary
- Demonstrate billing errors were clerical or due to staff inexperience- not intentional fraud
- Show efforts to implement compliance plans or corrective action when issues were flagged.
A skilled healthcare fraud defense attorney can reframe the government’s narrative and prevent civil or criminal escalation.
Doctors and small clinics frequently ask:
“If I didn’t know my staff were billing incorrectly, am I still liable?”
Unfortunately, under the FCA, knowledge can be actual, deliberate ignorance, or reckless disregard. This means that providers can be held liable even if they didn’t personally submit the claims.
That’s why compliance training, billing oversight, and accurate documentation are essential.
Physicians should ensure that every billed service is medically necessary, supported by clear charting, and submitted using the proper CPT codes.
Routine internal audits and the use of outside compliance consultants can demonstrate due diligence — a key defense when accusations arise.
In recent cases, courts have accepted defenses based on medical necessity where the provider could show that treatment decisions were clinically justifiable and not influenced by financial motives. Your healthcare fraud defense lawyer may work with a medical coding expert, an internal medicine specialist, or even compliance auditors to testify about standard industry practices and your documentation efforts.
It is also helpful to keep clear records of any compliance training you received, billing audits performed, and corrective actions taken. These demonstrate that you were not ignoring problems, but actively working to stay compliant — a key narrative that may persuade prosecutors, judges, or juries.
What to Do After Being Indicted for Healthcare Fraud?
If you’ve been indicted for healthcare fraud, you are now in a formal criminal process. Time and planning are your greatest allies.
Immediate Steps:
Understand the indictment: Know the charges and their legal implications.
Avoid public statements: Media or social media posts can be used against you
Secure financial documentation: Gather billing records, contracts, and policy manuals.
Ask yourself: Are there documents or testimony that show I acted on legal advice? That I relied on professional staff?
A careful, documented trail of compliance efforts can be pivotal in defense.
Being indicted for healthcare fraud may feel like the end of the road — but it’s not. It’s the start of a legal process in which you still have rights, leverage, and opportunities to present your side. An indictment doesn’t mean the government has a winning case; it simply means that a grand jury found probable cause based on what the prosecution presented — often without any counter-evidence or defense witnesses.
You and your trial defense attorney can now engage in discovery, challenge the strength of the case, and even seek to have certain charges dismissed pre-trial.
Many healthcare fraud indictments result in reduced charges or settlements when the defense team acts swiftly and strategically.
Navigating a Federal Healthcare Fraud Prosecution
Federal prosecutions follow a structured process — but every case is different. Understanding the phases of prosecution helps you plan:
- Indictment and Arraignment: Formal charges are read; you enter a plea
- Discovery: Exchange of evidence; request and review documents
- Pretrial Motions: File to exclude evidence or dismiss certain charges
- Plea Negotiations: Evaluate if a resolution is possible without trial
- Trial: The Government must prove each charge beyond a reasonable doubt.
Your defense lawyer may use motions to suppress illegally obtained evidence or challenge witness credibility.
A good defense team will anticipate the prosecution’s strategy and build a counter-narrative.
During trial, expert witnesses may be called to testify about medical billing standards, medical necessity, compliance protocols, and the role of various staff.
Your defense team should prepare witnesses carefully and consider filing motions to exclude prejudicial evidence that lacks relevance. Jury selection is also critical — ensuring that jurors understand complex billing systems and don’t assume wrongdoing based on technical regulations alone.
Some prosecutions hinge on intent. If your team can show a pattern of corrective action, reliance on consultants, or staff errors rather than fraud, that may sway a jury or convince prosecutors to consider alternative resolutions.
Options After Being Accused of Medicaid Fraud
Medicaid fraud investigations often start with a probe from the state Medicaid Fraud Control Unit (MFCU) and may escalate to federal prosecution.
Healthcare providers accused of Medicaid fraud can:- Request clarification or provide records to explain billing variances- Challenge audit findings that led to referrals- Demonstrate billing was based on standard care, not deceptionIf a qui tam (whistleblower) complaint initiated the investigation, your attorney will also need to understand the relator’s allegations and build a counter-narrative. Providers accused of Medicaid fraud often face both repayment demands and criminal scrutiny.
Even innocent healthcare providers may feel overwhelmed by the complexity of Medicaid billing requirements across different states. A single error — such as using the wrong provider number or misunderstanding service caps — can lead to large overpayment findings.
Your defense lawyers should explore whether the accusations stem from misunderstandings, administrative errors, or alleged systemic abuse.
Also, examine whether the audit methodology used by Medicaid contractors holds up under scrutiny. In many cases, statistical sampling methods may be flawed or overly broad.
FAQs and Search-Driven Questions Answered
What should I do if my practice is being investigated for healthcare fraud?
Contact a healthcare fraud defense attorney immediately. Do not speak to investigators or respond to subpoenas without retaining legal counsel.
What are the penalties for False Claims Act violations?
Civil penalties of over $25,000 per claim, treble damages, exclusion from federal healthcare programs, and potential criminal charges if intent is proven.
How can I defend against a kickback accusation?
If a safe harbor applies, your trial defense lawyer can present that defense. You may also show good-faith reliance on legal review or lack of intent.
Can I go to prison for healthcare fraud?
Yes. Convictions under 18 USC 1347 can carry up to 10 years in prison—or 20 years if serious injury is involved. Wire fraud and conspiracy charges can add additional time.
I’ve been indicted—what now?
Retain an attorney to analyze the indictment, preserve evidence, and prepare for discovery. Do not attempt to explain anything to investigators without legal counsel.
What is the difference between civil and criminal healthcare fraud charges?
Civil cases typically involve financial penalties and repayment demands. Criminal cases may lead to prison time and a criminal record. Often, the government brings both simultaneously, which increases the stakes dramatically.
How do I find the best healthcare fraud defense lawyer near me?
Search for attorneys who regularly handle federal healthcare fraud, have courtroom experience, and understand both the civil regulatory and criminal enforcement aspects of the case. Also, note that sometimes outside counsel may be able to bring fresh set of eyes to the table and creative legal defense strategy.
What agencies investigate healthcare fraud?
The DOJ, HHS-OIG, FBI, and state Medicaid Fraud Control Units (MFCUs) are all actively involved. CMS may also conduct audits and refer issues to law enforcement.
Can a healthcare fraud case be settled before trial?
Yes. Many federal fraud cases are resolved through civil settlements or deferred prosecution agreements, especially when legal counsel engages early and demonstrates cooperation or limited intent.
What is a civil investigative demand (CID)?
A CID is a subpoena-like request used in False Claims Act investigations. It may ask for documents, answers to written questions, or oral testimony. A timely and strategic response is essential.
What is the statute of limitations for healthcare fraud?
Generally, the statute of limitations is six years for FCA cases, but can extend to 10 years.
Criminal statutes vary depending on the charge. Prompt legal advice is critical.
How long do healthcare fraud investigations take?
Investigations can last from months to years. If you’re being investigated, assume the government is already deep into its case and act accordingly.
Why Contact Watson & Associates LLC
When your healthcare business is under investigation or indictment, you cannot afford to wait. Early legal intervention can prevent missteps, reduce penalties, and provide clarity when everything feels uncertain. At Watson & Associates, LLC, we help healthcare providers nationwide understand the charges they face and respond strategically.
Whether you are a physician group, billing company, or pharmaceutical distributor, we are here to defend your rights.
Call us today for a confidential consultation and protect your organization’s future. Call Toll Free 1.866.601.5518.
Your first call can make all the difference. Don’t wait until the government makes its next move—call Watson & Associates today.
- We don’t take shortcuts or provide cookie-cutter defenses.
- Each client’s facts, business model, and legal exposure are unique.
Call now to schedule a confidential consultation with a healthcare fraud defense lawyer. You can also initiate a confidential online inquiry.
We work with clients nationwide and across the healthcare spectrum — whether you’re a startup lab services company, a mid-size billing firm, or an individual provider facing whistleblower allegations.
- Our attorneys understand how to respond to investigations, subpoenas, audits, and indictments strategically.
- You don’t have to face this alone. Let us protect your rights, reputation, and freedom.
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Our goal is not just to defend — it’s to protect what you’ve built. We understand that a healthcare fraud charge isn’t just a legal issue; it’s a threat to your reputation, your livelihood, and your future. Whether you’re being investigated or already indicted, you need a team that treats your case with urgency and focus.