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Ask a Financial Crime Lawyer: What Constitutes Medical Fraud in Texas?

If you are a healthcare provider, or if you are involved in billing at a healthcare facility, it is essential to be aware of what constitutes medical fraud. Avoiding fraudulent activities can help you avert the consequences of white-collar crimes, including an FBI investigation that might result in jail time. If you are currently the subject of an investigation, a financial crime lawyer can help you fight the charges.

Ask a Financial Crime Lawyer: What Constitutes Medical Fraud in Texas?

Medical fraud, also known as healthcare fraud, is the practice of billing for medical services in a dishonest manner with the purpose of increasing profits. Often, individuals who engage in healthcare fraud target private insurance providers, Medicare, or Medicaid. Other times, the patients themselves are asked to pay for services already covered by their insurance.

Submitting Bills for Unnecessary Services or Services Not Provided

One of the most common forms of healthcare fraud happens when a provider submits a bill for a service he or she did not provide or one that was not medically necessary. Similarly, a billing department might charge a patient’s insurance for an ambulance ride that was not provided or needed. Often, federal investigators are alerted to this type of fraud after auditors go through the facilities’ records, examining large groups of patients.


Upcoding is a type of healthcare fraud that occurs when a patient’s insurance is billed for a service that was more expensive than the one provided. This type of fraud can also occur at pharmacies if the pharmacist bills for a brand-name medication after providing the patient with a generic version of the same drug.


The third most common type of healthcare fraud is unbundling, or the practice of double charging a patient’s insurance for services that were already included or “bundled” into one package. Unbundling is especially common with lab tests because the labs that analyze the results often offer physicians bundles of tests that are frequently ordered together.

Trust Fund Violations

Sometimes, home health providers or bookkeepers write themselves checks out of their patients’ healthcare trust funds. This practice constitutes health care fraud when it is done without the patient knowing and/or when the amount of the checks exceeds the amount due.

Where Can Healthcare Fraud Occur?

Healthcare fraud can happen in any setting where medical services are offered, including the patient’s home. In addition to large hospitals and private medical practices, healthcare fraud can occur at pharmacies, dental practices, and skilled nursing facilities.

What Are Some Examples of Healthcare Fraud?

Some examples of the kinds of healthcare fraud cases a Houston financial crime lawyer might see are:

  • A provider ordering a second round of x-ray images when the first round yielded enough information to diagnose the patient
  • A dentist billing for work on a tooth that was not done
  • A surgeon billing for an operation that was more costly than the one he or she actually performed

What Kind of Lawyer Can Represent Me in a Healthcare Fraud Case?

Healthcare fraud is a highly nuanced white-collar crime that involves detailed medical terminology and legislation that changes frequently. A healthcare fraud case is not appropriate for a jack-of-all-trades lawyer or someone who is fresh out of law school. In fact, the Model Rules of Professional Conduct set by the American Bar Association specify that only a lawyer with experience in healthcare law can represent a client in a healthcare fraud case.

What Legal Recourses Do I Have During a Healthcare Fraud Investigation?

If the FBI suspects your practice of healthcare fraud, you could be subject to a lengthy investigation that may or may not result in formal charges. Your lawyer’s first approach will be to help you satisfy the audit and cooperate with the investigation to avoid further violating the law. After having obtained the information they request, the authorities may find that there isn’t sufficient evidence to press charges.

If the investigation yields grounds for taking you to court, your lawyer may recommend that you reach a deferred prosecution agreement. If such an agreement is reached, you will have the opportunity to negotiate a settlement with the government and avoid formal charges. In the event that your lawyer needs to litigate on your behalf, available defense strategies include:

  • Casting doubt on key evidence against you, such as the testimony of an expert witness
  • Pointing to discrepancies in the governments’ published guidelines pertaining to healthcare coding
  • Demonstrating that the billing was done correctly and that the treatments were necessary
  • Optimizing the jury to avoid individuals who are biased against people accused of white-collar crimes

If you believe that there is evidence that you were responsible for healthcare fraud at your practice, it is important to speak with an attorney as soon as possible. Being investigated usually involves sensitive communications with government agents, and it is important to have an experienced attorney on your side. In addition to helping clients get through an investigation, many firms also offer educational programs on healthcare fraud aimed at preventing allegations of white-collar crime.