Medicare fraud is prosecuted principally under 18 U.S.C. § 1347, the health care fraud statute, which makes it a felony to knowingly and willfully execute a scheme to defraud a health care benefit program or to obtain its money by false or fraudulent pretenses. Conspiracy is charged under 18 U.S.C. § 1349, which carries the same penalty as the substantive offense and, unlike the general conspiracy statute, requires no proof of an overt act. Where the allegation involves payments for referrals, the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), is charged alongside it.
What the government must prove
For a § 1347 count, the government must establish that a scheme to defraud a health care benefit program existed, that the defendant knowingly and willfully participated in it with intent to defraud, and that the scheme involved the delivery of or payment for health care benefits, items, or services. The statute reaches private insurers as well as federal programs.
Two elements do the most work. The first is knowledge and willfulness. Medical billing is governed by an enormous body of coding rules, coverage determinations, and documentation requirements, and error is common. The line between an incorrect claim and a criminal one is intent, and the government must prove the defendant knew the claims were false. The second is medical necessity. Where the theory is that services were not medically necessary, the government is asking a jury to reject a treating clinician's documented judgment — which requires expert testimony and, ordinarily, evidence that the clinician did not actually hold that judgment.
How these cases are built
Modern health care fraud enforcement begins with data. The Justice Department's Health Care Fraud Unit and its Strike Forces analyze Medicare claims data to identify providers whose billing patterns diverge from peers — outlier volumes for a given code, services billed at impossible frequencies, or beneficiaries whose records show duplicated services across unrelated providers. Data identifies a target; it does not prove intent.
From there the investigation moves to conventional methods: interviews with beneficiaries and former employees, review of patient charts against submitted claims, undercover contacts, cooperating witnesses drawn from marketers and billing staff, and financial analysis of where reimbursements went. Search warrants for practice records and grand jury subpoenas for billing data typically precede any charge, and civil False Claims Act exposure and administrative payment suspensions often run in parallel.
Billing data can identify an outlier. It cannot, standing alone, establish that a provider knew a claim was false — and knowledge is the element that separates a billing error from a felony.
The role of loss and forfeiture
In health care fraud cases the alleged loss amount frequently drives the sentencing exposure more than any other factor. The government commonly starts from the total amount billed or paid over a period, and the defense response is that billed amounts include legitimate, medically necessary services rendered to real patients. Courts must find loss by a preponderance for guidelines purposes, and the contested space between "amount billed" and "amount attributable to fraud" is often the most consequential dispute in the case. Forfeiture and restitution calculations follow the same figures.
What a dismissal signifies
A dismissal ends the prosecution without an adjudication of guilt. It can follow a Rule 12 challenge to the indictment, a government motion under Rule 48(a) with leave of court, a suppression ruling that removes the evidentiary foundation for the charge, or a reassessment of whether the proof establishes intent rather than error. There is no conviction, no sentence, no restitution order, and no forfeiture judgment on a dismissed count.
The distinction matters unusually much for health care providers. A felony conviction relating to health care fraud triggers mandatory exclusion from Medicare, Medicaid, and all federal health care programs under 42 U.S.C. § 1320a-7(a), and state licensing boards act on convictions. Those mandatory consequences are keyed to a conviction. A dismissal does not by itself resolve separate civil or administrative proceedings, which apply different standards of proof and proceed independently.