Collateral Consequences of Medicare, Medicaid, Medi-Cal Fraud

There is no doubt that that the possibility of losing anything that you have worked hard to obtain is a hard pill to swallow. Especially, related to your livelihood. So for medical professionals avoiding any hint of billing fraud or abuse related to Medicare, Medicaid, and other Federal and State Health Care reimbursement programs is not only a priority but mandatory.

Billing Fraud

The reality is that even a whiff of fraud or other abuses of these programs may have you facing the possibility of exclusions from participation of any kind with Federal and State Health Care Programs, could result in the loss of your professional license, removal from professional associations, participation in private insurance panels, and/or loss of hospital privileges—anyone of which can set-off an avalanche of the others which could effectively end your career in Healthcare.
Furthermore, ignorance of the law does not release you from potential criminal or civil liability. Those guilty of flagrant fraud and abuse are the obvious suspects. However, even those attempting to bend the rules, ignoring investigation requests, or falling victim to one’s own disorganization or incompetency will suffer as well.
However, in addition to these broad categories of collateral consequences, there are more specific ones tied back to the referenced Federal and State Health Care reimbursement programs. The individual program itself actually has discretion to pursue administrative penalties. These include but are not limited to: exclusions, civil monetary penalties, and billing privileges termination.
The most devastating aspect of these consequences is that they may not be “appealable,” in of themselves. Rather, they may in fact be mandated by law due to the underlying circumstances of your conduct. And that conduct may not even be related to the program—it could be something as seeming unrelated or innocuous as a driving under the influence conviction.


Below, please find a listing of the applicable exclusions that come about as a result of a finding of fraud or abuse in the Medicare program:

  • Exclusion by the Office of the Inspector General from participation in all Federal Health Care Programs
  • Exclusion from participation in Federal Health Care Program for a designated period
  • An excluded provider cannot bill any Federal Health Care Program for any services they perform
  • At the end of the exclusionary period the provider must seek reinstatement, it is not automatic.
  • Your reputation is further marked because the List of Excluded Individuals and Entities is maintained by the OIG and is available for public viewing

Other Federal and State Health Care reimbursement programs’ collateral consequences mirror that of the Medicare program. But you should check with your state’s agency and their statutory and regulatory requirements.

Civil Monetary Penalties

Under this penalty, you can be penalized up to $50,000 per violation and assessed up to three (3) times the amount claimed for services or up to three (3) times the amount of remuneration offered, paid, solicited or received. Again, it’s important to note that these penalties are not just for knowingly committing these abuses but if you “should know” that the service provided is not appropriate, you can face this penalty.

Provider Agreement and Billing Privileges Termination

This penalty can arise as a result of a plea agreement. That means that if you decide to plead guilty to avoid the possibility of jail time, you may lose your  provider agreement because State Medicaid programs are required to terminate agreements of anyone convicted of criminal activity that has any ties to the Medicaid or Medicare program.  If your Medicaid provider agreement is terminated this could lead to the loss of your Medicare, Medicaid, or other state health care reimbursement program’s billing privileges.
State programs may even go further. For example, in the state of California, a conviction or license revocation can lead to you not only being ineligible to participate as a provider but also as any non-provider either (1) participating in the drafting or submission of bills for reimbursement to the program or (2) engaging in unlicensed work for which your employer seeks reimbursement.
There may be other civil or tax consequences that spring up as a result of fraud and so it’s important to know what fraud and abuse looks like and put safeguards in place to protect your license and your business.