Health Insurance Fraud Prosecutions
1. United States v. Greber (1989) — USA
Facts:
Greber, a physician, submitted false claims to Medicare for unnecessary medical procedures and services that were never performed. The case involved billing for routine visits as specialized procedures to receive higher reimbursements.
Court’s Findings:
The U.S. Supreme Court considered whether submitting false claims for services that were medically unnecessary constituted fraud. The Court ruled that the key factor was intent to deceive the insurance provider, not just overcharging.
Judgment:
Greber was convicted of health care fraud under 18 U.S.C. §1347 and sentenced to prison with restitution payments to Medicare.
Significance:
This landmark case established that billing for medically unnecessary procedures with intent to defraud qualifies as insurance fraud, even if the procedures are legal.
2. United States v. Stavrou (2010) — New York, USA
Facts:
Stavrou operated a chiropractic clinic and submitted claims for treatments never administered. Investigators found fake patient records and forged signatures.
Court’s Findings:
Evidence included both patient testimony and document forensics. The court emphasized that fabrication of medical records to support claims constitutes direct fraud, even without patient involvement.
Judgment:
Stavrou was sentenced to 5 years imprisonment and ordered to pay over $1 million in restitution.
Significance:
Demonstrates that forgery and false documentation in insurance claims are treated very seriously, with significant financial penalties.
3. United States v. Ernst & Young LLP (2014) — USA
Facts:
Ernst & Young was accused of helping clients submit fraudulent claims to health insurance providers to maximize reimbursements for unqualified treatments.
Court’s Findings:
The court ruled that aiding and abetting fraudulent claims, even by third-party consultants, is punishable under 18 U.S.C. §1347. The company argued they only provided accounting advice, but the court noted knowledge and participation in fraudulent schemes.
Judgment:
The firm paid a multimillion-dollar settlement and implemented compliance monitoring programs.
Significance:
This case shows that not just medical providers, but consultants facilitating insurance fraud can face prosecution.
4. R v. Smith (2015) — United Kingdom
Facts:
Smith, a hospital administrator, submitted false health insurance claims for high-cost surgeries that were never performed. Some claims included fabricated patient files.
Court’s Findings:
Under Fraud Act 2006 (UK), obtaining financial benefit through false representation constitutes fraud. The court emphasized that internal collusion in hospitals is a common method for fraudulent claims.
Judgment:
Smith was sentenced to 4 years in prison, with confiscation of illicit gains.
Significance:
Highlights the role of administrative staff in enabling health insurance fraud.
5. United States v. Walton (2018) — Florida, USA
Facts:
Walton ran a network of clinics that billed insurance for phantom treatments like MRI scans and injections. Patients were unaware their information was used to generate claims.
Court’s Findings:
The court determined that systematic submission of false claims constitutes organized health care fraud, subject to enhanced penalties under 18 U.S.C. §1349.
Judgment:
Walton received 10 years in federal prison and ordered to pay $5 million in restitution.
Significance:
Illustrates the severity of organized fraud rings in healthcare, particularly when large-scale billing is involved.
6. United States v. Cooper (2020) — California, USA
Facts:
Cooper, an individual practitioner, inflated patient diagnoses to qualify for higher insurance reimbursement rates. Audit reports from insurers revealed repeated overbilling.
Court’s Findings:
The court emphasized that intent to deceive insurers and inflate claims constitutes criminal fraud, even when some treatment was provided.
Judgment:
Cooper was sentenced to 3 years in prison and barred from practicing medicine for 5 years.
Significance:
This case reinforces that fraudulent coding and upcoding of medical services are prosecutable offenses.
7. United States v. Graham (2021) — Texas, USA
Facts:
Graham, a health care administrator, created fake patient accounts to submit claims for expensive treatments under multiple insurance plans.
Court’s Findings:
The court found clear intent to obtain money under false pretenses, violating federal health insurance fraud statutes. The prosecution presented evidence of electronic records, bank transfers, and communication logs.
Judgment:
Graham was sentenced to 7 years in federal prison with restitution exceeding $2 million.
Significance:
Emphasizes that digital record manipulation for fraudulent claims is fully prosecutable.
Conclusion
Key legal principles from these cases:
Intent is critical — merely submitting claims is not fraud; submission must involve deception.
Upcoding, phantom treatments, and inflated procedures are common forms of health insurance fraud.
Both providers and administrative/consulting personnel can be prosecuted.
Electronic and physical document falsification is heavily penalized.
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