18 U.S.C. §1347 Healthcare Fraud Statute Overview
Facing a federal healthcare fraud investigation under 18 U.S.C. § 1347 is a life-altering event. Whether you are a physician, executive, billing professional, or healthcare organization, the moment federal agents contact you or a subpoena arrives, the stakes are immediately clear: your career, reputation, and freedom are on the line. Federal prosecutions are fundamentally different from ordinary legal matters—these cases are built by highly coordinated agencies with vast resources and prosecuted by the U.S. Department of Justice (DOJ).
Working with a seasoned 18 U.S.C. §1347 Healthcare Fraud Statute Attorney is not optional—it is critical. Chapman, Dowling & Mallek represents clients in federal courts across all 50 states and U.S. territories. Led by a former federal prosecutor and U.S. Marine Corps Judge Advocate, the firm understands how federal cases are built—and how to dismantle them.
If you are under investigation, have received a target letter, or believe you may be implicated, confidential legal intervention must begin immediately. What follows is a clear breakdown of federal healthcare fraud law, the risks you face, and how a strategic defense can protect you.
What Is Healthcare Fraud Under 18 U.S.C. § 1347?
18 U.S.C. § 1347 makes it a federal crime to knowingly and willfully execute — or attempt to execute — a scheme or artifice to defraud any healthcare benefit program, or to obtain money or property from a healthcare benefit program through false or fraudulent pretenses, representations, or promises. The statute covers federal programs like Medicare and Medicaid, as well as private insurers operating in interstate commerce.
The Department of Justice, through its Health Care Fraud Unit within the Criminal Division and through individual U.S. Attorney’s Offices, prosecutes these cases aggressively. The government does not need to prove that every claim in the alleged scheme was fraudulent — only that the defendant executed or attempted to execute a broader fraudulent scheme.
The federal government must prove beyond a reasonable doubt:
- The defendant executed or attempted to execute a scheme to defraud
- The scheme targeted a healthcare benefit program
- The defendant acted knowingly and willfully — not merely negligently or by mistake
- The scheme involved a material false statement, representation, or promise
- The defendant intended to obtain money, property, or services from the program
Healthcare fraud under § 1347 can be prosecuted alongside related charges including wire fraud (18 U.S.C. § 1343), mail fraud (18 U.S.C. § 1341), money laundering (18 U.S.C. § 1956), and conspiracy (18 U.S.C. § 371). Civil exposure under the False Claims Act (31 U.S.C. § 3729) frequently runs in parallel with criminal proceedings.
Criminal vs. Civil Federal Exposure
Federal healthcare fraud cases almost always carry dual exposure. The DOJ may pursue criminal prosecution under § 1347 while simultaneously pursuing civil False Claims Act liability. These two tracks can move concurrently, meaning a provider may face simultaneous criminal indictment and civil qui tam litigation — compounding both financial exposure and strategic complexity. Federal counsel experienced in both tracks is essential from day one.
Common Examples and Healthcare Fraud Allegations
Federal healthcare fraud charges arise from an extraordinarily wide range of conduct. The government frequently alleges that routine billing practices, clinical decisions, or administrative shortcuts crossed the line into knowing fraud. The distinction between billing error, overpayment, and federal crime is not always obvious — but the consequences of that distinction are severe.
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- Upcoding and billing manipulation: Submitting claims using procedure codes that reflect a higher level of service than was actually documented or provided — whether driven by a coder’s interpretation or a provider’s direction
- Billing for services not rendered: Submitting claims for patient encounters, procedures, or tests that did not occur, including “gang visits” billed at skilled nursing facilities
- Unnecessary medical procedures: Performing and billing for procedures not medically indicated, including unnecessary laboratory tests, imaging studies, durable medical equipment, or surgical interventions
- Kickback-driven billing: Submitting claims for services referred or ordered in connection with unlawful remuneration arrangements under the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b))
- Home health and hospice fraud: Billing for home health services or hospice care for patients who do not meet eligibility criteria, or fabricating physician orders and certifications
- Compounding pharmacy schemes: Marketing, prescribing, or dispensing compounded medications primarily for billing purposes rather than clinical need
- Identity theft and provider number fraud: Using another provider’s NPI number to submit claims, or billing under the names of deceased or inactive physicians
- Telehealth fraud: Submitting claims for telehealth services never provided, or using telehealth platforms to generate high-volume prescriptions or orders with minimal clinical interaction
Which Federal Agencies Investigate 18 U.S.C. § 1347 Healthcare Fraud Status?
Federal healthcare fraud investigations are typically multi-agency operations. The resources available to federal investigators are substantial, and coordination between agencies is standard practice.
The primary investigating agencies include:
- Federal Bureau of Investigation (FBI) — Health Care Fraud Unit, often the lead criminal investigative agency
- U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) — Conducts administrative and criminal investigations; controls Medicare/Medicaid exclusion authority
- Centers for Medicare & Medicaid Services (CMS) — Oversees billing data analytics through the Unified Program Integrity Contractor (UPIC) network; often the originating referral source
- Department of Justice, Criminal Division, Fraud Section — Health Care Fraud Unit; also coordinates annual National Health Care Fraud Enforcement Actions
- Drug Enforcement Administration (DEA) — Involved where allegations include prescription fraud or controlled substance diversion
- IRS Criminal Investigation (IRS-CI) — Follows money; involved in cases with significant cash-flow irregularities or offshore financial structures
- U.S. Postal Inspection Service (USPIS) — Activated where mail is used to transmit fraudulent claims or payments
Warning Signs a Federal Healthcare Fraud Investigation May Already Be Underway
- Employees or former employees have been approached or interviewed by federal agents
- Your practice has received a federal grand jury subpoena for records, emails, or billing data
- Federal agents have executed a search warrant at your office, home, or vehicle
- You have received a Civil Investigative Demand (CID) from the DOJ or a UPIC audit demand from CMS
- Your bank has contacted you about a Suspicious Activity Report (SAR)
- A payer audit has escalated to a demand to repay large sums and has been referred to law enforcement
- A business partner, employee, or former employee has retained criminal defense counsel
Federal Penalties for 18 U.S.C. § 1347 Healthcare Fraud
Federal healthcare fraud convictions carry severe, layered consequences. Penalties are not limited to incarceration — financial, professional, and collateral consequences frequently outlast any prison sentence.
| Penalty Category | Details |
| Federal Prison | Up to 10 years per count; up to 20 years if the offense results in serious bodily injury; life imprisonment or death if the offense results in death |
| Criminal Fines | Up to $250,000 per count for individuals; up to $500,000 per count for organizations |
| Mandatory Restitution | Full repayment of all fraudulently obtained funds under 18 U.S.C. § 3663A |
| Asset Forfeiture | Criminal forfeiture of all proceeds and property traceable to the offense under 18 U.S.C. § 982 |
| Supervised Release | Up to 3 years following any prison term |
| Medicare/Medicaid Exclusion | Mandatory exclusion from all federal healthcare programs by HHS-OIG — effectively ending the ability to practice medicine in any setting that accepts federal reimbursement |
| Professional License | State medical boards routinely act on federal convictions; license suspension or revocation is common |
| Civil Monetary Penalties | Up to three times the amount of damages under the False Claims Act, plus $13,000+ per false claim |
| Debarment | Exclusion from all federal contracts and programs |
| Immigration Consequences | Non-citizens face potential deportation following conviction for an aggravated felony |
Key Federal Healthcare Fraud Statutes and Regulations
Primary Criminal Statutes:
- 18 U.S.C. § 1347 — Healthcare Fraud: Criminalizes execution of a scheme to defraud any healthcare benefit program or obtain money through false representations
- 18 U.S.C. § 1349 — Attempt and Conspiracy to Commit Healthcare Fraud: Extends § 1347 liability to attempts and conspiracies, same penalties as the substantive offense
- 18 U.S.C. § 1035 — False Statements Relating to Healthcare Matters: Criminalizes material false statements in connection with healthcare benefit programs; up to 5 years
- 18 U.S.C. § 1343 — Wire Fraud: Frequently charged alongside § 1347 where electronic billing, email, or electronic fund transfers are involved
- 18 U.S.C. § 1341 — Mail Fraud: Charged where the U.S. mail was used in furtherance of the scheme
- 18 U.S.C. § 1956 / § 1957 — Money Laundering: Charged when proceeds from healthcare fraud are used in financial transactions; significantly increases sentencing exposure
- 18 U.S.C. § 371 — Federal Conspiracy: Broad charge covering agreements to commit any of the above offenses
Administrative and Civil Statutes:
- 42 U.S.C. § 1320a-7b(b) — Anti-Kickback Statute: Criminalizes remuneration intended to induce or reward referrals billable to federal healthcare programs
- 31 U.S.C. §§ 3729–3733 — False Claims Act: Imposes civil liability for false claims submitted to the federal government; enables qui tam relator suits
- 42 U.S.C. § 1395nn — Stark Law (Physician Self-Referral Law): Prohibits physician referrals to entities in which the physician has a financial relationship, for services billable to Medicare
Key Regulatory Framework:
- 42 C.F.R. Part 1001 — HHS-OIG exclusion authority and administrative sanctions
- 42 C.F.R. Part 411 — CMS self-referral prohibition implementing regulations
The Ruan v. United States, 597 U.S. 450 (2022) decision — though arising in the controlled substance context — reinforced the scienter requirement in federal healthcare prosecutions, confirming that the government must prove a defendant knowingly acted without authorization, not merely acted in a manner later deemed unauthorized.
Defenses Strategies Against 18 U.S.C. § 1347 Healthcare Fraud Charges
Federal healthcare fraud prosecutions are not foregone conclusions. The statute’s willfulness requirement — the government must prove knowing and willful intent to defraud — is a demanding standard, and it creates real defense opportunities.
- Lack of Criminal Intent / Willfulness The most powerful defense in many § 1347 cases. Healthcare billing is extraordinarily complex. Coding errors, software misconfiguration, reliance on third-party billing companies, or misinterpretation of CMS guidance does not constitute criminal fraud. Proving that a defendant acted in good faith — following established practice norms or billing guidance — directly negates the government’s required proof.
- Insufficient or Ambiguous Evidence Healthcare fraud prosecutions are document-intensive. The government must reconstruct intent from billing records, emails, and testimony from cooperating witnesses — many of whom have their own criminal exposure and corresponding incentives to embellish. Challenging the reliability, completeness, and interpretation of that evidence is central to effective defense.
- Constitutional Violations — Fourth and Fifth Amendments Evidence obtained through unlawfully executed search warrants — those lacking particularity, based on stale or misleading affidavits, or exceeding their scope — may be subject to suppression. Statements made to federal agents without proper Miranda warnings, or following an unlawful seizure, may similarly be excluded.
- Absence of Scheme — Isolated Errors vs. Pattern of Fraud The statute targets the execution of a “scheme.” Isolated billing errors, even repeated ones, do not necessarily establish the existence of a fraudulent scheme. Defense counsel can challenge the government’s characterization of billing conduct as coordinated, intentional fraud.
- Good Faith Reliance on Counsel or Compliance Programs Where a provider sought legal or compliance advice and acted consistent with that guidance, good faith reliance can negate the willfulness element — even if the conduct was ultimately determined to violate program rules.
- Statute of Limitations The general statute of limitations for federal healthcare fraud is five years under 18 U.S.C. § 3282, though the government may argue for a longer period in certain circumstances. Conduct occurring outside the limitations window cannot form the basis of a criminal charge.
- Entrapment and Outrageous Government Conduct Where federal agents — through confidential informants or undercover operations — induced a defendant to engage in conduct they would not otherwise have pursued, entrapment may be a viable defense.
- Multiplicitous Indictment Federal healthcare fraud indictments sometimes charge multiple counts that in reality reflect a single criminal act. Challenging multiplicity protects against duplicative punishment and may narrow the government’s case at trial.
These are general defenses applicable across federal healthcare fraud matters. Effective defense strategy requires individualized analysis of the specific facts, charges, and evidence in your case.
Need help now? Call our healthcare fraud defense attorneys today.
Healthcare professionals and organizations trust us because we understand federal enforcement tactics, move quickly to protect careers and licenses, and focus on achieving the best possible outcome with minimal disruption to professional and business operations.346-CHAPMAN
Why You Need an Experienced Federal Healthcare Fraud Defense Lawyer
Federal healthcare fraud cases are among the most complex white-collar prosecutions. They involve:
- Massive data sets
- Medical and billing expertise
- Aggressive federal prosecutors
- Multi-agency investigations
A federal defense attorney provides critical advantages:
- Pre-Investigation: Internal reviews and compliance defense
- Investigation Stage: Managing subpoenas and protecting rights
- Pre-Indictment: Negotiating with DOJ to avoid charges
- Litigation: Filing motions and preparing trial defense
- Trial: Defending before a federal jury
- Sentencing: Minimizing exposure under USSG
- Appeals: Challenging convictions in federal appellate courts
Chapman, Dowling & Mallek represents clients in all 94 U.S. District Courts nationwide. With former federal prosecutors and investigators, the firm brings insider knowledge of how these cases are built—and how to dismantle them.
Confidential consultations are available immediately.
