California commonly prosecutes healthcare fraud as insurance fraud, medical billing fraud, Medicare fraud, or Medi-Cal fraud. Investigations have increased significantly in recent years at both the state and federal levels.

California prosecutes healthcare fraud cases strictly and can pursue felony charges, jail time, hefty fines, and license revocation.

Although some cases involve deliberate fraud schemes, many healthcare fraud claims stem from billing errors, clerical mistakes, or misunderstandings of complex insurance regulations.

Unfortunately, investigators and prosecutors frequently suspect criminal intent where none exists. Because medical billing systems are complex, honest mistakes sometimes trigger criminal investigations, but prosecutors must prove intent before a conviction can occur.

What Is Healthcare Fraud Under California Law? (PC 550)

Prosecutors most often charge healthcare fraud under California Penal Code 550. Under this law, it is illegal to knowingly:

• Submit a false or fraudulent insurance claim

• Bill for medical services or procedures never provided

• Submit duplicate or double-billing claims

• Prepare documentation supporting a fraudulent claim

To secure a conviction, prosecutors must prove both knowledge and a specific intent to defraud the insurance provider or government program.

Most Common Types of Healthcare Fraud in California

Healthcare investigations typically focus on several recurring categories:

• Billing for Services Never Provided: Charging for appointments, diagnostic tests, or treatments that were never actually administered.

• Upcoding: Billing for a more expensive procedure or medical service than the one actually performed (e.g., billing for complex surgery instead of a routine office visit).

• Double Billing: Submitting multiple claims for the same medical procedure, which can trigger fraud allegations if prosecutors suspect purposeful intent.

• Kickbacks and Referral Schemes: Offering or receiving unlawful compensation for patient referrals, such as paying marketers for Medicare patients.

• Prescription Fraud: Falsifying prescriptions or unlawfully obtaining controlled substances under California Health and Safety Code 11173.

• Workers' Compensation Fraud: Submitting false injury claims or billing for unperformed treatments under workers' compensation insurance.

Penalties for Healthcare Fraud in California

Penalties for healthcare fraud depend heavily on the monetary value of the alleged fraud:

• Fraud Under $950 (Misdemeanor): Up to 6 months in county jail, fines up to $1,000, and misdemeanor probation.

• Fraud Over $950 (Wobbler Offense): Can be prosecuted as a felony carrying 2, 3, or 5 years in county jail, formal probation, and steep fines up to $50,000 or double the amount of the fraud.

• Professional Consequences: Healthcare professionals face automatic license suspension, professional discipline, and permanent exclusion from billing Medicare or Medi-Cal.

Strategic Defenses Against Healthcare Fraud Charges

Because medical billing infrastructure involves intricate coding systems and administrative layers, strong legal defenses often center on:

• Lack of Intent: Proving that administrative oversights or software errors are not crimes without concrete proof of a deliberate scheme.

• Lack of Knowledge: Demonstrating that the defendant did not know a submitted claim was false or inaccurate.

• Clerical or Coding Mistakes: Showing how data entry errors, miscommunication, or automated billing glitches generated duplicate or flawed claims.

Frequently Asked Questions (FAQs)

What constitutes healthcare fraud under California law?

Healthcare fraud under Penal Code 550 involves knowingly submitting false insurance claims, billing for services never rendered, upcoding procedures, or engaging in kickback schemes with the specific intent to defraud a government program or insurer.

What is the difference between upcoding and billing for unperformed services?

Billing for unperformed services means charging for medical care or tests that never happened at all. Upcoding means a service was performed, but the provider intentionally billed for a more expensive, higher-level procedure than what actually took place.

Can administrative billing errors lead to criminal charges?

Yes. Because medical billing and coding systems are deeply complex, honest administrative errors, data entry mistakes, or software glitches can occasionally trigger investigations. However, prosecutors must prove intentional criminal wrongdoing beyond a reasonable doubt to secure a conviction.

What are the penalties for felony healthcare fraud in California?

When charged as a felony (for fraud amounts exceeding $950), penalties can include 2, 3, or 5 years in custody, formal probation, fines up to $50,000 or double the fraud value, and the revocation of professional medical licenses.

How can a criminal defense lawyer help with a healthcare fraud investigation?

An experienced defense attorney can intervene early to analyze complex audit logs, review billing records, challenge faulty loss calculations, and demonstrate a lack of fraudulent intent to protect your professional license, reputation, and freedom.

Your best chance of a positive outcome in a healthcare fraud case is to work with an experienced California criminal defense attorney at Cron, Israels & Stark. To schedule a consultation, call (424) 372-3112 or complete the online contact form.