Health Care Fraud Laws in California – Penal Code 550
Health care fraud is aggressively prosecuted in California and can result in felony convictions, prison sentences, massive fines, and loss of professional licenses.
These cases are commonly referred to as medical billing fraud, insurance fraud, Medicare fraud, or Medi-Cal fraud, but many fall under California Penal Code 550 PC.
While some cases involve intentional fraud schemes, many health care fraud accusations arise from billing errors, clerical mistakes, or misunderstandings of complex insurance rules. Unfortunately, investigators and prosecutors often assume criminal intent where none exists.
Our criminal defense attorneys represent health care professionals, office staff, and individuals accused of health care fraud throughout Los Angeles and Southern California.
Cron, Israels & Stark is here to help. Schedule your consultation at (424) 372-3112 or contact us here.
What Is Health Care Fraud Under Penal Code 550?
California Penal Code 550 PC criminalizes knowingly submitting false or fraudulent claims to an insurance company or government health program.
In simple terms, health care fraud occurs when someone intentionally tries to obtain insurance benefits or payments they are not legally entitled to receive.
Common Programs Involved in PC 550 Cases
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Private health insurance plans
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Medi-Cal
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Medicare
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Workers' compensation insurance
Common Types of Health Care Fraud in California
Health care fraud can take many forms. The most commonly alleged violations include:
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Billing for services never provided
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Submitting false or misleading insurance claims
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Upcoding (billing for more expensive procedures than those performed)
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Double-billing for the same medical service
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Creating or altering documents to support fraudulent claims
These allegations often involve doctors, nurses, therapists, medical assistants, billing clerks, and office administrators.
Key Penal Code 550 Statutes Explained
Penal Code 550(a)(1) PC – False Insurance Claims
It is a crime to knowingly present, or cause to be presented, any false claim for payment of a loss or injury under an insurance policy.
Example:
Submitting a claim for an injury allegedly sustained at work when it actually occurred at home.
Penal Code 550(b)(1) PC – False Statements
This section makes it illegal to submit any statement knowing it contains false or misleading information about a material fact in support of an insurance claim.
Example:
Providing false answers on insurance questionnaires or claim forms to obtain benefits.
Billing for Services Not Rendered
Penal Code 550 also prohibits submitting claims for:
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Medical services were never performed
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Procedures provided to someone other than the named patient
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Multiple claims for the same procedure
Who Is Commonly Charged With Health Care Fraud?
Health care fraud investigations often target:
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Physicians and surgeons
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Nurses and therapists
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Medical office staff and billers
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Clinic administrators
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Practice owners
In some cases, employees unknowingly violate the law by following office billing procedures without realizing errors are being submitted.
How Prosecutors Prove Health Care Fraud
To convict someone of health care fraud, prosecutors must prove the elements of the crime beyond a reasonable doubt.
Required Elements
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Knowledge: You knew the claim was false or fraudulent
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Intent to defraud: You intentionally tried to deceive the insurer or program
Intent is the most critical element.
If the prosecution cannot prove criminal intent—as opposed to negligence or mistake—the case may fail.
Penalties for Health Care Fraud in California
Misdemeanor Health Care Fraud
If the alleged loss is less than $950, penalties may include:
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Up to 6 months in county jail
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A fine of up to $1,000
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Or both
Felony Health Care Fraud (Wobbler Offense)
When the alleged loss exceeds $950, Penal Code 550 becomes a wobbler offense.
Felony penalties may include:
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2, 3, or 5 years in jail or prison
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Probation with up to 1 year in county jail
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Fines up to $50,000 or double the amount of the fraud
Professional License Consequences
Health care professionals may also face:
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License suspension
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License revocation
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Mandatory reporting to licensing boards
Related offenses include prescription fraud under Health and Safety Code 11173 and workers' compensation fraud.
Common Defenses to Health Care Fraud Charges
Every case is fact-specific, but common defenses include:
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Lack of intent to defraud
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Lack of knowledge, the claim was false
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Billing errors or clerical mistakes
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Inadequate training or supervision
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Reliance on office staff or billing services
Because California's health care billing system is extremely complex, honest mistakes are often mischaracterized as fraud.
Can Health Care Fraud Charges Be Dismissed?
Yes. In some cases, defense counsel may persuade the District Attorney to:
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Reduce felony charges to misdemeanors
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Dismiss charges entirely
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Decline to file charges after investigation (DA reject)
Early legal intervention is often the key to these outcomes.
Speak With a California Health Care Fraud Defense Lawyer
Health care fraud allegations can jeopardize your freedom, career, and professional reputation. If you are under investigation or have been charged under Penal Code 550, you should speak with a criminal defense attorney immediately.
Early defense strategy can make the difference between dismissal, reduced charges, or devastating long-term consequences.
Your best hope for a favorable outcome is with a highly experienced criminal defense attorney at Cron, Israels & Stark in Los Angeles. To schedule a consultation, call (424) 372-3112 or contact us here.
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