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Can allegations of health care fraud effect my license??

November 27, 2013
Est read time: 4 minutes

Doctors, nurses, dentists, chiropractors, psychiatrists, psychologists, physical therapists, and other licenses health care providers are subject to harsh penalties under state and federal law if found by the government to have engaged in health are fraud.


A.        What is health care fraud?

Generally speaking, the term “fraud” means deceit, trickery, or misrepresentation perpetrated for the purpose of gaining some unfair or dishonest advantage.  In health care it refers to such practices as misrepresentation for the purpose of getting a third-party payor such as an insurance company or government program like Medicare or Medicaid to pay for services that either were not rendered or not medically necessary.

Examples of situations where the government has alleged health care fraud include:

Billing for medical services that weren't ordered or provided

Billing for durable medical equipment items that weren't ordered or provided

Providing services or items a person doesn't need based on his or her medical history

Upcoding, selecting billing codes that are not justified for the purpose of seeking a higher reimbursement rate.


            B.        State and Federal Laws

Under federal law, it is illegal to present to the government for payment a bill or statement that is false or fraudulent.  The False Claims Act (FCA), 31 U.S.C. Section 3729, provides for treble (x3) damages and civil penalties against anyone who knowingly presents or causes to be presented to an officer or employee of the United States Government a false or fraudulent claim for payment or approval or who knowingly makes, uses, or causes to be made or used a false record or statement to get a false or fraudulent payment paid or approved by the federal government.

An example of how this law is applied can be found in the case of United States v. Krizek, 859 F. Supp. 5 (U.S. District D.C. 1954).  One of the allegations against Dr. Krizek, a psychiatrist, was that he and his billing clerk engaged in “up-coding”

Dr. Krizek used the CPT Code for a 45-50 minute psychotherapy session (CPT Code 90844) when he should have used the CPT Code 90843, AND BILLED FOR A 20-30 MINUTE SESSION.  The U.S. Government alleged that at least 33% of his patients were up-coded this way.  One of the practices in r. Krizek’s clinic which the court found most egregious was his billing clerk’s presumption that all patients were seen for 50 minutes and billed Medicare/Medicaid accordingly.  The court found that this presumption constitutes a violation of the False Claims Act and held:

  " Dr. Krisek must be held accountable for his billing system along  with those who carried it out.  Dr. Krizek was not justified in            seeing patients and later not verifying the claims submitted for services to those patients.  Doctors must be held strictly  accountable for requests filed for insurance reimbursement."

Krizek at p. 13.


This case resulted in a judgment against Dr. Krizek and hefty monetary penalties and civil fines.

The Florida False Claims Act imposes liability on people and corporations who, among other violations, knowingly present fraudulent or false claims for payment to the state; misappropriate state property; or deceptively conceal or avoid an obligation to pay the state.

A defendant may be ordered to pay up to three times the actual harm to the state, plus a fine of between $5,500 and $11,000 for each violation of the Act. A plaintiff filing a False Claims Act case may receive between 15 and 25 percent of any recovery in matters joined by the Florida Attorney General, and between 25 and 30 percent of the recovery if the whistleblower proceeds on his own. The court may reduce the amount of the award if the whistleblower's allegations are based on publicly disclosed information, or if the plaintiff planned or initiated the fraud.

The Act also protects whistleblowers from retaliation by their employers. Plaintiffs may not file their complaint more than ten years after the date on which the violation occurred.


            C.        The Effect of an Allegation of “Health Care Fraud” on Your Professional  License

In addition to civil and criminal penalties which can be imposed by the state or federal government, every practitioner should know that their professional Board can discipline the license of the individual health care practitioner.  Often times the penalties for health care fraud are severe, particularly when the Florida Department of Health is seeking a revocation of the license.

Many of the administrative rules of the health care professions in Florida deal with penalties against licensees who are found to have violated criminal laws involving health care fraud.


For example, the Board of Medicine has disciplinary guidelines, which state for:

For:  “a crime related to healthcare fraud in dollar amounts in excess of $5,000.00.”

             Penalty: “Revocation or in the case of application for licensure, denial of licensure and a

a fine of $ 10,000.00.”

Similarly, the Board of Nursing has disciplinary guidelines which call which state:


For:  “Being convicted or found guilty of, or entering a plea of nolo contendere to,

regardless of adjudication of a felony violation of Chapter 409, 817 or 893, F.S., or

of any crime related to health care fraud. (Section 456.072(1)(ll), 464.018(1)(d)3. or

464.018(1)(e), F.S., for crimes set forth in Section 435.04(2)(u) or (ee), F.S.)

Penalty:   A minimum of a $ 10,000 fine and probation all the way to a maximum of a

$10,000 fine and revocation of the nurse’s license.

Please note:  other licensed health care professionals have similar penalties which can be imposed on a licensee if found guilty or implicated in acts of health care fraud.

If you have questions regarding allegations that have been made against you or you are a subject of an investigation it is wise to see the advice of an experienced health care attorney who is familiar with these issues.  To set up a free no obligation consultation call me at 850-877-7776.

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Contact the law firm of Howell, Buchan & Strong at 850-877-7776 to set up a FREE no-obligation consultation. Our firm represents physicians, nurses, psychologists, and other licensed professionals statewide.
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