The Role of Intent in Healthcare Fraud Cases

Healthcare fraud allegations can show up in many different ways: Billing patterns do not match your documentation, or investigators claim pharmaceutical consulting fees were tied to your prescription volume. A former employee alleges you knew about insurance fraud in your practice, or the government suggests that the payments you received were actually referral kickbacks.

These situations all raise the same question that prosecutors need to prove beyond a reasonable doubt: Did you know the claims were incorrect when they were submitted? That question of intent often determines whether billing discrepancies become criminal charges.

What is healthcare fraud?

Healthcare fraud is a white-collar crime involving deception in healthcare transactions to obtain unlawful benefits or payments. According to the FBI, healthcare fraud wastes tens of billions of dollars every year, and both state attorneys general and federal prosecutors heavily investigate these crimes.

Healthcare fraud prosecutions have increased by 4.2% from 2019 to 2023, and recent federal enforcement actions have resulted in charges against more than 500 healthcare providers nationwide. Medical providers, patients, pharmaceutical companies, and others may find themselves accused of:

Billing and claims fraud

• Phantom billing for services patients never received
• Upcoding (billing for more expensive services than actually provided)
• Double-billing or submitting multiple claims for the same service
• Unbundling (submitting separate bills for the same service)

Kickback and referral schemes

• Paying or receiving money for patient referrals
• Disguising kickbacks as consulting fees or research payments
• Providing free goods or services in exchange for business

Identity and insurance fraud

• Using stolen patient insurance information
• Identity swapping between patients
• Enrolling patients in fake benefit plans

Prescription and drug fraud

• Illegal distribution of controlled substances
• “Pill mill” operations prescribing unnecessary medications
• Promoting off-label uses illegally

These are just a few examples of activities that fall into the category of healthcare fraud, which is a broad and diverse area.

Although these activities can cause significant harm when committed intentionally, not all allegations prove to be criminal acts. The healthcare system is complex, and well-meaning providers, professionals, and even patients can find themselves under investigation for conduct that may have innocent explanations.

If you find yourself caught up in a criminal healthcare fraud investigation, one factor in particular influences the outcome: Did you act with intent to deceive? Prosecutors must prove, beyond a reasonable doubt, that you knowingly engaged in fraudulent conduct.

The legal definition of intent in healthcare fraud cases

If you are facing healthcare fraud allegations, the laws you are charged under determine what prosecutors need to prove about your knowledge and intent. The specific requirements vary significantly, which directly impacts your potential exposure, consequences, and defense options. For example:

• Federal cases involve multiple statutes with different intent requirements.
  • Healthcare fraud (18 U.S.C. § 1347) requires “knowingly and willfully” executing a scheme to defraud.
  • Anti-Kickback Statute violations require “knowingly and willfully” paying or receiving prohibited remuneration.
  • The False Claims Act (civil) requires “actual knowledge, deliberate ignorance, or reckless disregard” of claim falsity.
  • Drug diversion cases also often require proving “knowingly and intentionally” distributing controlled substances outside legitimate medical practice.
• New Jersey state cases under N.J.S.A. 2C:21-4.3 distinguish between “knowing” and “reckless” conduct, with more severe penalties for “knowing” violations.

These different statutes matter because healthcare fraud can be prosecuted both criminally (with potential prison time) and civilly (with financial penalties and loss of billing privileges). The same underlying conduct might face both types of cases simultaneously, but the government’s burden of proof differs.

In criminal cases, prosecutors must prove you knew your conduct was fraudulent AND willfully violated a known legal duty. In civil cases, such as False Claims Act matters, they only need to show “reckless disregard” for whether the claims were accurate, which is much easier to prove.

How intent varies by type of healthcare fraud

Prosecutors build intent cases differently depending on what they are alleging you did wrong. Here is what investigators typically look for in each type of case.

Billing and claims fraud

In cases alleging phantom billing or upcoding, prosecutors often seek evidence that you knew the services billed did not match what was provided. They may point to documentation showing awareness of things like: 

• Billing discrepancies
• Training records indicating knowledge of proper coding
• Communications discussing billing practices

Kickback and referral schemes

In these cases, the government seeks to show you “knowingly and willfully” violated anti-kickback laws. Prosecutors may point to evidence of concealment, arrangements they characterize as fraudulent consulting agreements, or payments they argue clearly exceeded fair market value.

Identity and insurance fraud

When patients or others are accused of insurance fraud, prosecutors typically focus on evidence that suggests you knew insurance information was false or stolen. They might claim you: 

• Used multiple identities
• Coordinated with others to share insurance cards
• Received medical services under false pretenses

Prescription and drug fraud

For cases involving controlled substances, prosecutors must prove you “knowingly and intentionally” distributed drugs outside a legitimately established medical practice. They often turn to evidence like prescribing patterns outside of medical standards, frequent cash payments, lack of proper examinations, or communications about non-medical drug distribution.

False Claims Act cases

Though these cases are civilly prosecuted, they can result in substantial damages. Prosecutors may attempt to establish intent through what they characterize as “reckless disregard for truth”—a lower standard than criminal cases—or by arguing you knew that claims were false.

The key is that prosecutors must prove intent beyond a reasonable doubt, and experienced defense attorneys can help you figure out the right way to challenge their claims at every step.

What defense strategies are available for healthcare fraud?

Depending on the allegations you are facing, your attorney may take several different approaches to building the strongest possible defense for you. 

It is important to remember that during this time, you should consult with your attorney about what, if anything, you should say. If investigators contact you, do not speak to law enforcement without an attorney present. Statements made during investigations can be used against you later, even if you believe you are just providing helpful information.

Document analysis and investigation

Your attorney should thoroughly review all relevant communications, billing records, training materials, and software systems, which helps them understand what you actually knew at the time of the alleged conduct. What prosecutors characterize as deliberate schemes may actually be responses to software malfunctions, consultant advice, or regulatory confusion.

Expert testimony

Healthcare billing experts can testify that your conduct fell within acceptable industry standards or that the regulatory requirements were so complex that mistakes were more likely than intentional violations. These experts help juries understand the practical realities of healthcare billing.

Challenging timeline

Prosecutors often construct timelines that make coincidences appear deliberate. Defense attorneys examine whether it is reasonable to infer that you intended to commit fraud or whether other explanations better account for the evidence, such as responding to changing regulations, following consultant advice, or addressing compliance concerns.

Demonstrating good faith efforts

Evidence showing attempts to comply with regulations, correct errors when discovered, or seek guidance from consultants demonstrates a lack of intent to defraud. Records of compliance training, billing audits, or corrective action plans all support a good-faith defense.

Regulatory complexity defense

Your attorney may demonstrate how constantly changing requirements, unclear guidance, and complex documentation rules make honest mistakes more likely than deliberate fraud. For example, the distinction between evaluation codes often depends on subjective documentation requirements that even experienced physicians struggle to navigate consistently.

Consult with an experienced healthcare fraud defense attorney

Healthcare fraud cases are won and lost on the details. Through thorough investigation and strategic defense, we can often demonstrate that what prosecutors characterize as deliberate fraud was, in fact, reasonable conduct in a complex regulatory environment.

We understand the grave impact these charges can have on your career, reputation, and family, and our healthcare fraud defense attorneys will vigorously defend your rights.

Contact us today to discuss your situation and learn how we can help you fight accusations of healthcare fraud.