Health care fraud and kickback charges

What does the law make illegal?

Health care fraud, 18 U.S.C. § 1347

It is a crime to knowingly and willfully carry out, or try to carry out, a scheme to defraud a health care benefit program, or to get its money by false or fraudulent statements or promises, in connection with health care services or payment for them (18 U.S.C. § 1347). "Willfully" means the person knew the conduct was wrong. The government does not have to prove the person knew about this specific law or meant to break it (§ 1347(b)).

A "health care benefit program" is any public or private plan that pays for medical care (18 U.S.C. § 24(b)). So the law covers fraud against private insurers as well as Medicare and Medicaid.

Kickbacks, 42 U.S.C. § 1320a-7b(b)

The Anti-Kickback Statute makes it a felony to knowingly and willfully offer, pay, ask for or take anything of value in return for referring patients, or for ordering or recommending items or services, paid for by a federal health care program such as Medicare or Medicaid. "Anything of value" includes cash, gifts, free rent and inflated salaries. The law has exceptions, called safe harbors, for some arrangements, such as payments to real employees for covered work (§ 1320a-7b(b)(3)). As with § 1347, the government need not prove the person knew about the statute itself (§ 1320a-7b(h)).

A separate law, the Eliminating Kickbacks in Recovery Act, covers kickbacks for referrals to recovery homes, treatment facilities and laboratories, whether a public or private plan pays (18 U.S.C. § 220). It carries up to 10 years.

Other charges that often come with it

• False statements in a health care matter: up to 5 years (18 U.S.C. § 1035).
• False statements on a Medicare or Medicaid claim by a person furnishing the items or services: up to 10 years and $100,000 (42 U.S.C. § 1320a-7b(a)).
• Conspiracy to commit health care fraud: the same penalties as the fraud (18 U.S.C. § 1349).
• Wire and mail fraud, money laundering, and, for prescribers, unlawful distribution of controlled substances (21 U.S.C. § 841).

Civil laws that often run alongside

Two civil laws carry money penalties, not prison. The False Claims Act, 31 U.S.C. § 3729, makes a person liable for knowingly submitting false claims to the government, with penalties per claim plus three times the government's damages. A claim that results from a kickback counts as a false claim (§ 1320a-7b(g)). The Stark Law, 42 U.S.C. § 1395nn, generally bars a doctor from referring Medicare patients for certain services to a business the doctor or a family member has a financial relationship with, unless an exception applies.

What are the penalties?

• Health care fraud (§ 1347): up to 10 years; up to 20 years if the violation results in serious bodily injury; any term of years or life if it results in death.
• Kickbacks (§ 1320a-7b(b)): up to 10 years and a fine of up to $100,000 per count.
• Mandatory minimum: none for these offenses.
• Fines: for § 1347, up to $250,000 for a person or $500,000 for an organization, or twice the gross gain or loss (18 U.S.C. § 3571).
• Forfeiture: the court must order forfeiture of property derived from the gross proceeds of a federal health care offense (18 U.S.C. § 982(a)(7)).
• Restitution: generally required for fraud losses (18 U.S.C. § 3663A).
• Exclusion: a felony health care fraud conviction, or a conviction for a crime related to Medicare or a state health program, leads to mandatory exclusion from federal health care programs for at least five years (42 U.S.C. § 1320a-7(a), (c)(3)(B)).

How does sentencing work for this charge?

Health care fraud is sentenced under USSG §2B1.1, the same fraud guideline used for wire fraud. The dollar loss drives most of the range (see the loss table on our wire fraud and mail fraud page). Two rules matter most in health care cases:

• Billed amounts as intended loss. When the conviction involves a government health care program, the total of the fraudulent bills is treated as enough evidence of the intended loss unless the defense rebuts it (§2B1.1, Application Note 3). Because providers often bill more than programs pay, this can produce a much higher loss figure than the money actually received.
• Extra increase for government programs. If the loss to a government health care program is more than $1,000,000, add 2 levels; more than $7,000,000, add 3; more than $20,000,000, add 4 (§2B1.1(b)(7)).

Kickback convictions can be sentenced under §2B1.1 or under §2B4.1, which starts at level 8 and adds levels based on the value of the bribe or the benefit it was meant to bring. Increases for sophisticated means, a leadership role, or abuse of a position of trust (USSG §3B1.3) often come up for licensed professionals. A timely guilty plea usually earns 2 or 3 levels off (USSG §3E1.1).

Pending at the Supreme Court. In Beaird v. United States, No. 25-5343, set for argument on October 13, 2026, the Court agreed to decide whether Stinson v. United States (1993) still states the rule for how much weight courts must give the Guidelines’ commentary, the notes that follow each guideline. The answer could affect rules on this page that come from commentary rather than from the guideline text itself.

Guideline numbers on this page are from the Guidelines Manual in effect since November 1, 2025, which no longer uses “departures”: the judge calculates the range, then weighs the factors in 18 U.S.C. § 3553(a). For more depth, see How the federal Sentencing Guidelines work, at Sentencing.net, a Criminal Center site.

Statutes covered on this page

Each federal law this page covers, listed by how often it was a statute of conviction in fiscal year 2025 (U.S. Sentencing Commission data). For each one: the official section heading, what the government must prove, the penalties, and the sentencing guideline the Commission's Statutory Index assigns to it. See all statutes by title and section.

• 18 U.S.C. § 1347
• 18 U.S.C. § 1035
• 42 U.S.C. § 1320a-7b(b)
• 18 U.S.C. § 669
• 18 U.S.C. § 220

How do these cases usually start and move?

Health care cases are often worked jointly by the FBI and the HHS Office of Inspector General, under a program Congress created for health care fraud (42 U.S.C. § 1320a-7c). They often start with billing data that looks unusual, a payment suspension, a records request from a Medicare contractor, a whistleblower's civil False Claims Act case filed under seal, or a search warrant at the office.

Billing staff, office managers and patients are often interviewed early. A target letter or a call from an agent is a good time to stop and talk with a lawyer before giving records or answers (Justice Manual 9-11.151). Criminal, civil and licensing matters can move at the same time, and a statement made in one can be used in another.

The usual stages of a federal case

1. 1Investigation. Agents gather records and interview witnesses, often using grand jury subpoenas. Someone the prosecutor views as a "target" may get a target letter before an indictment (Justice Manual 9-11.151, 9-11.153).
2. 2Charges. A federal felony is usually charged by indictment: a grand jury decides in private whether there is probable cause (Fed. R. Crim. P. 6, 7). Some cases start with an arrest on a criminal complaint.
3. 3First appearance and detention. After an arrest, the person goes before a magistrate judge without unnecessary delay (Fed. R. Crim. P. 5). The judge decides whether they are released or held until trial (18 U.S.C. § 3142).
4. 4Evidence and motions. The government must turn over certain evidence (Fed. R. Crim. P. 16). The defense can ask the court to suppress evidence or dismiss charges (Fed. R. Crim. P. 12).
5. 5Plea or trial. Many federal cases end in a guilty plea, which the judge must find knowing and voluntary (Fed. R. Crim. P. 11). At trial, the government must prove every element beyond a reasonable doubt, and a jury verdict must be unanimous (Fed. R. Crim. P. 31(a)).
6. 6Sentencing. A probation officer writes a presentence report, and each side can object in writing within 14 days of receiving it (Fed. R. Crim. P. 32). The judge then decides the sentence under 18 U.S.C. § 3553(a).

More on what to do at each stage: Facing federal charges? What to do now.

What defense issues come up in these cases?

• Mistake versus crime. Both § 1347 and the Anti-Kickback Statute require that the person acted knowingly and willfully. Billing errors, coding disputes and unclear payer rules are not crimes by themselves. Who did the coding, what training and guidance existed, and what the person was told all matter.
• Medical necessity. Was the care actually needed, and do the records support the treating provider's judgment?
• Safe harbors and real jobs. Did a payment fit an Anti-Kickback safe harbor, such as pay to a bona fide employee for covered work?
• Prescribers. For doctors charged under 21 U.S.C. § 841, the government must prove the prescriber knew or intended that the prescription was unauthorized (Ruan v. United States, 597 U.S. 450 (2022)).
• Loss amount. Billed amounts can overstate intended loss. Rebutting the billed-amount rule, and crediting legitimate services, can change the guideline range a great deal.
• Data and statistics. Many cases rest on claims data, samples and extrapolation. How the sample was drawn and what it can prove are fair questions.
• Parallel matters. Coordinating the criminal case with False Claims Act claims, exclusion and licensing boards.

Every case turns on its own facts. These are issues to look at, not predictions about how any case will turn out.

What happens after a conviction?

• Appeal. A notice of appeal is usually due within 14 days after the judgment is entered (Fed. R. App. P. 4(b)(1)(A)). Many plea agreements waive the right to appeal, but in Hunter v. United States (2026) the Supreme Court held that a waiver can’t be enforced when doing so would cause a miscarriage of justice, a high bar. See federal appeals at Sentencing.net.
• A § 2255 motion. A motion asking the sentencing court to vacate, set aside or correct the sentence, for example for ineffective assistance of counsel. It is usually due within one year after the conviction becomes final (28 U.S.C. § 2255(f)). See 2255motion.com.
• Compassionate release. A motion asking the judge to reduce a prison sentence for extraordinary and compelling reasons, filed after the person asks the warden and either exhausts BOP appeals or waits 30 days (18 U.S.C. § 3582(c)(1)(A)). It can’t be used to attack the validity of the conviction itself (Fernandez v. United States (2026)). See CompassionateRelease.com.
• Clemency. The President can pardon a federal offense or commute (shorten) a federal sentence (U.S. Const. art. II, § 2). See Clemency.com.