Civil vs. Criminal Healthcare Fraud Offenses

Healthcare fraud is a major focus of both federal and state enforcement agencies. In California, healthcare providers, from doctors and pharmacists to durable medical equipment suppliers and home health agencies, can face allegations of fraud under either civil or criminal law. While both types of cases carry serious consequences, there are important differences in how they are investigated, prosecuted, and resolved. Understanding these distinctions can help providers better prepare for scrutiny and mount an effective defense when allegations arise. If you are facing healthcare fraud allegations with the potential for civil or criminal penalties at the state or federal level in California, contact The Law Offices of Stanley L. Friedman in Beverly Hills to speak with an experienced Los Angeles healthcare fraud defense attorney certified as a Specialist in Criminal Law by the State Bar of California.

What Constitutes Healthcare Fraud?

Healthcare fraud generally involves any intentional deception or misrepresentation made to gain an unauthorized benefit in the healthcare system, often involving false or misleading claims submitted to insurance companies or government programs. Common examples include billing for services not rendered, upcoding to higher-reimbursed procedures, receiving kickbacks for referrals, or falsifying medical records. Fraud can be pursued as a civil violation, a criminal offense, or both, depending on the circumstances and intent attributed to the provider.

Civil Healthcare Fraud

Civil healthcare fraud cases typically arise when enforcement agencies such as the U.S. Department of Health and Human Services (HHS), the Office of Inspector General (OIG), or the California Department of Health Care Services (DHCS) believe that improper claims have been submitted to Medicare, Medi-Cal, or private insurers.

Civil enforcement focuses on recovering money rather than imposing criminal punishment. The government may seek repayment of claims, treble damages, and substantial civil penalties. These cases are often pursued under the federal False Claims Act or California’s False Claims Act.

One unique feature of civil enforcement is the role of whistleblowers. Under the qui tam provisions of the False Claims Act, private individuals can file lawsuits on behalf of the government and share in any recovery. This greatly increases the number of civil fraud investigations healthcare providers may face.

Importantly, civil cases do not require proof of criminal intent beyond a reasonable doubt. Instead, the government must typically show that a provider “knowingly” submitted false claims—a standard that can be satisfied through a provider’s reckless disregard or deliberate ignorance. As a result, civil cases often hinge on billing errors, compliance failures, or documentation issues, even when there was no intent to defraud.

Criminal Healthcare Fraud

Criminal healthcare fraud, on the other hand, is prosecuted by agencies such as the U.S. Department of Justice (DOJ), the FBI, or state prosecutors in California. Criminal charges are reserved for more serious cases where prosecutors believe they can prove intentional deception or fraudulent conduct.

To secure a conviction, the government must prove guilt beyond a reasonable doubt, which is the highest standard in the legal system. Criminal charges may involve statutes such as federal healthcare fraud laws, mail and wire fraud statutes, or the Anti-Kickback Statute. Convictions can result in prison sentences, criminal fines, restitution, and exclusion from federal healthcare programs.

Criminal prosecutions often involve evidence of deliberate schemes, such as falsified patient records, ghost patients, kickback arrangements, or conspiracies involving multiple providers. Unlike civil enforcement, where mistakes may lead to penalties, criminal cases focus on intentional wrongdoing.

The Overlap Between Civil and Criminal Proceedings

A single healthcare fraud investigation can give rise to both civil and criminal proceedings. For example, a provider accused of submitting fraudulent claims to Medicare may face civil liability under the False Claims Act while simultaneously being prosecuted criminally for healthcare fraud.

This overlap increases the stakes significantly, as providers must defend themselves on multiple fronts. Settling a civil case does not necessarily resolve a parallel criminal case, and statements made in one proceeding may be used in the other.

Defending Against Healthcare Fraud Allegations in California

Whether a case is civil or criminal, providers should take allegations seriously from the outset. A strong defense often begins with ensuring that compliance programs are robust and that billing practices are transparent and well-documented.

If faced with an investigation, providers should avoid making statements without legal counsel, as even inadvertent comments can be misconstrued. Healthcare fraud defense attorneys play a critical role in assessing the nature of the case—civil, criminal, or both—and developing a strategy that protects the provider’s rights and livelihood.

Defense strategies may include challenging the government’s interpretation of billing regulations, demonstrating the absence of intent to defraud, or negotiating settlements in civil cases to avoid escalation into criminal charges.

Why the Distinction Matters

The consequences of civil versus criminal healthcare fraud are vastly different. Civil liability can be financially devastating, but providers may continue practicing if they can resolve the matter and implement compliance reforms. Criminal convictions, however, often end careers and result in long-term exclusion from healthcare programs, along with incarceration in some instances.

For these reasons, understanding whether an investigation is likely to proceed civilly or criminally is essential. Early legal intervention can sometimes prevent a civil case from escalating into a criminal one by demonstrating cooperation and remediation.

Contact The Law Offices of Stanley L. Friedman for Healthcare Fraud Defense in Los Angeles

Healthcare fraud enforcement in California is aggressive, and providers must remain vigilant in maintaining compliance with federal and state regulations. The difference between civil and criminal fraud offenses lies primarily in intent, standards of proof, and the severity of penalties.

If your practice is under investigation, the most important step is to seek experienced legal representation. A skilled healthcare fraud defense attorney can help you understand the scope of the allegations, protect your rights, and work toward the best possible outcome, whether that means disputing the claims, negotiating a civil resolution, or mounting a strong defense in court. In Los Angeles, contact The Law Offices of Stanley L. Friedman for practical advice and smart, strong, and effective legal defense.