Defending Against Medicare and Medicaid Healthcare Fraud Charges in Texas

For medical professionals in Texas, from physicians in Houston to home health agency owners in the Rio Grande Valley, a healthcare fraud investigation is a career-threatening crisis. Both the federal government and the state of Texas aggressively audit and prosecute medical providers suspected of defrauding taxpayer-funded health programs. Whether you are accused of honest billing mistakes or intentional criminal conspiracies, navigating these charges requires an immediate and highly specialized defense. A conviction can result in decades in federal prison, millions in restitution, and the permanent loss of your medical license.

Federal OIG Investigations vs. Texas MFCU

Depending on which insurance program was allegedly defrauded, you will face different investigators. Federal Medicare fraud is primarily investigated by the U.S. Department of Health and Human Services, Office of Inspector General, Dallas (HHS-OIG), often working alongside the FBI. They pursue federal indictments in U.S. District Courts. Conversely, if the allegations involve state-administered Medicaid, the investigation is typically spearheaded by the Medicaid Fraud Control Unit, Office of the Attorney General, Austin (MFCU). The MFCU has statewide jurisdiction to investigate and prosecute Medicaid providers in Texas state courts for violations of Tex. Penal Code § 35A.02 (Medicaid Fraud). Often, these agencies share information, meaning a state audit can quickly escalate into a federal criminal case.

Common Types of Healthcare Fraud (Micro-Niches)

Prosecutors categorize healthcare fraud into several specific schemes. Understanding what you are accused of is the first step in building a defense.

Upcoding and Unbundling

Upcoding occurs when a provider bills Medicare for a more expensive procedure or a longer appointment than was actually provided to the patient. Unbundling involves billing separately for individual steps of a procedure that should be billed together at a lower, bundled rate. Defending these charges often requires hiring independent medical billing coders to prove that the billing codes submitted on Form CMS-1500, FED, Centers for Medicare & Medicaid Services, Health Insurance Claim Form were accurate or the result of a clerical error, not criminal intent.

Phantom Billing

Phantom billing is the outright fraudulent practice of submitting claims for patients who never visited the clinic, for procedures that were never performed, or for medical equipment that was never delivered. In cases like United States v. Sanjar, 876 F.3d 725 (US Court of Appeals for the Fifth Circuit 2017), federal courts in the Fifth Circuit (which includes Texas) deal harshly with clinic owners who systematically bill for phantom services.

Anti-Kickback Statute Violations

The federal 42 U.S.C. § 1320a-7b prohibits anyone from offering, paying, soliciting, or receiving anything of value to induce referrals for services covered by Medicare or Medicaid. This includes 'medical director' sham contracts, lavish gifts to referring doctors, or paying marketers for patient leads. Defense strategies often rely on proving the arrangement fits strictly within a statutory 'Safe Harbor' provision.

Stark Law Breaches

The 42 U.S.C. § 1395nn (Physician Self-Referral Law) is a strict-liability civil statute. It forbids a doctor from referring Medicare patients for designated health services to an entity with which the physician (or an immediate family member) has a financial relationship. Because it is a strict liability statute, you can be heavily fined even if you did not intend to break the law, though you will generally face civil monetary penalties rather than prison.

What Happens to Your Medical License?

If you are indicted for healthcare fraud, or if serious allegations of patient harm arise during the investigation, the Texas Medical Board, Austin (TMB) will intervene. The TMB has the authority to temporarily suspend your medical license pending the outcome of the criminal investigation, effectively shutting down your practice overnight. Your defense attorney must simultaneously fight the criminal charges and represent you in administrative hearings before the State Office of Administrative Hearings, Austin to protect your livelihood.

How Much Does a Fraud Defense Cost in Texas?

Healthcare fraud defense is highly document-intensive, often involving terabytes of medical records.

How Long Does the Process Take?

Federal OIG investigations are notoriously slow. It is not uncommon for a clinic in San Antonio or Fort Worth to be subpoenaed, and then hear nothing for 12 to 24 months before an indictment drops. If the case proceeds to a federal jury trial, the entire ordeal can last 3 to 5 years.

Frequently Asked Questions (FAQ)