Healthcare fraud prosecuted by the U.S. Department of Justice carries some of the steepest penalties in federal white-collar enforcement: prison sentences that reach life imprisonment when a patient dies, civil damages set at three times the government’s loss plus a per-claim penalty between $14,308 and $28,619, mandatory restitution of everything stolen, and exclusion from Medicare and Medicaid that can end a medical career. Because a single scheme typically violates several statutes at once, defendants routinely face criminal charges, civil False Claims Act liability, and administrative consequences stacked on top of one another.
Prison Time by Statute
The prison exposure depends on which criminal statute the DOJ charges. Most large healthcare fraud indictments include more than one.
The criminal health care fraud statute, 18 U.S.C. 1347, is the broadest tool. It reaches anyone who knowingly carries out a scheme to defraud any healthcare benefit program, whether federal or private. The base maximum is 10 years in prison per count. If the fraud causes serious bodily injury to a patient, the ceiling rises to 20 years. If a patient dies as a result, the defendant faces up to life imprisonment.1Office of the Law Revision Counsel. 18 USC 1347 Health Care Fraud
The Anti-Kickback Statute at 42 U.S.C. 1320a-7b makes it a felony to offer, pay, solicit, or receive anything of value to influence referrals for services covered by a federal healthcare program. Both sides of the transaction are liable. A conviction carries up to 10 years in prison and a $100,000 fine per violation.2Office of the Law Revision Counsel. 42 USC 1320a-7b Criminal Penalties for Acts Involving Federal Health Care Programs
The Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. 220, targets kickback arrangements involving clinical laboratories, recovery homes, and clinical treatment facilities, and it applies to all health plans rather than only federal programs. The maximum is 10 years in prison and a $200,000 fine per violation.3Office of the Law Revision Counsel. 18 U.S. Code 220 – Illegal Remunerations for Referrals to Recovery Homes, Clinical Treatment Facilities, and Laboratories
Prosecutors regularly add general charges such as wire fraud and conspiracy. Those counts carry their own prison terms and sit on top of the healthcare-specific ones.
Civil Exposure Under the False Claims Act
The financial hit from civil enforcement often exceeds the criminal fine. The False Claims Act imposes liability on anyone who knowingly submits a false claim to the federal government, and “knowingly” reaches actual knowledge, deliberate ignorance, and reckless disregard for the truth.4Office of the Law Revision Counsel. 31 USC 3729 False Claims Intent to defraud is not required.
Every false claim triggers a civil penalty between $14,308 and $28,619 under the current inflation adjustment.5Federal Register. Civil Monetary Penalties Inflation Adjustments for 2025 On top of the per-claim penalty, the government recovers three times its actual loss.4Office of the Law Revision Counsel. 31 USC 3729 False Claims
The math compounds quickly. A billing scheme with 500 false claims and $2 million in fraudulent payments generates $6 million in treble damages before the per-claim penalties are counted; those alone can add $7 million to $14 million at current rates. Total liability regularly runs several multiples of the money actually taken. This is why most FCA cases settle. In fiscal year 2025 the DOJ recovered more than $5.7 billion in healthcare-related FCA settlements and judgments.6United States Department of Justice. False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025
A defendant who reports the violation within 30 days of discovering it, cooperates fully, and has no knowledge of any existing investigation can have damages reduced to double the loss rather than triple.4Office of the Law Revision Counsel. 31 USC 3729 False Claims
The civil standard of proof is lower than the criminal standard. The government has to show liability by a preponderance of the evidence, so the DOJ can pursue civil penalties in cases where the evidence would not sustain a criminal conviction.
The Anti-Kickback Overlap
Any claim submitted to Medicare or Medicaid that results from an Anti-Kickback Statute violation is automatically a false claim under the FCA.2Office of the Law Revision Counsel. 42 USC 1320a-7b Criminal Penalties for Acts Involving Federal Health Care Programs A physician who takes referral payments and then bills Medicare for those patients faces criminal prosecution under the kickback statute and treble-damage civil liability for every resulting claim.
Stark Law Liability Without Intent
The Stark Law, 42 U.S.C. 1395nn, prohibits physicians from referring Medicare or Medicaid patients for designated health services to any entity with which the physician or an immediate family member has a financial relationship, absent a qualifying exception.7Office of the Law Revision Counsel. 42 U.S. Code 1395nn – Limitation on Certain Physician Referrals Stark is strict liability. Prosecutors do not have to prove intent. Penalties include denial of payment, required refunds, civil monetary penalties, and exclusion from federal healthcare programs.
Mandatory Restitution
Federal courts must order restitution in healthcare fraud sentencings under the Mandatory Victims Restitution Act, which covers offenses committed by fraud or deceit.8Office of the Law Revision Counsel. 18 U.S. Code 3663A – Mandatory Restitution to Victims of Certain Crimes The full amount of the government’s loss is repaid on top of any prison sentence, fine, or civil settlement. Restitution is not discretionary and is not offset by an inability to pay.
Administrative Consequences
The consequences that follow a healthcare fraud case often outlast the prison term. For many providers, they are the penalty that actually ends the career.
Exclusion From Federal Healthcare Programs
The HHS Office of Inspector General can exclude an individual or entity from Medicare, Medicaid, and every other federally funded healthcare program. An excluded provider cannot receive any federal payment for items or services they furnish, order, or prescribe.9U.S. Department of Health and Human Services, Office of Inspector General. Exclusions
Exclusion is mandatory for anyone convicted of a program-related crime, patient abuse, a healthcare fraud felony, or a controlled-substance felony. The minimum mandatory period is five years.10Office of the Law Revision Counsel. 42 U.S. Code 1320a-7 – Exclusion of Certain Individuals and Entities From Participation in Medicare and State Health Care Programs The OIG has discretion to impose permissive exclusions in less severe cases, with the same program-wide reach.11U.S. Department of Health and Human Services Office of Inspector General. Exclusions FAQs
Corporate Integrity Agreements
Healthcare organizations that settle fraud cases often sign a Corporate Integrity Agreement as a condition of avoiding exclusion. The entity has to overhaul its compliance program, install a compliance officer, retain an independent review organization to audit its practices, and file annual reports with the OIG.12U.S. Department of Health and Human Services Office of Inspector General. Corporate Integrity Agreements CIAs typically run five years. If the entity fails to meet its obligations, the OIG can seek exclusion.13U.S. Department of Health and Human Services Office of Inspector General. About Corporate Integrity Agreements
Payment Suspension Before Any Conviction
CMS can suspend Medicare payments before charges are filed or a case is resolved. If CMS, after consulting the OIG and the DOJ, determines that a credible allegation of fraud exists, it can halt payments in whole or in part.14eCFR. Suspension, Offset, and Recoupment of Medicare Payments to Providers and Suppliers of Services CMS reviews the suspension every 180 days and generally must lift it after 18 months unless the DOJ requests an extension for a pending criminal or civil action. For a practice that runs on Medicare reimbursements, a suspension can force closure long before trial.
How Long the Government Has to File
Civil False Claims Act suits must be filed within six years of the violation, or within three years of the date the government learned or should have learned the relevant facts, up to a 10-year outer limit. Whichever deadline falls later controls. In complex schemes, the 10-year outer limit is usually what governs.
Qui tam whistleblowers get the benefit of the government’s knowledge date, not their own. The Supreme Court has held that this applies even when the government declines to intervene.
Criminal healthcare fraud charges under 18 U.S.C. 1347 are generally subject to the standard five-year federal statute of limitations, though conspiracy and other charges can carry different windows. There is no statute of limitations when the fraud caused a patient’s death.
Reporting Fraud and the Whistleblower Share
Anyone can report suspected healthcare fraud to the HHS-OIG hotline at 1-800-HHS-TIPS (1-800-447-8477) or through the OIG website.15Office of Inspector General. Submit a Hotline Complaint The FBI also takes healthcare fraud tips through its field offices and online portal.16Federal Bureau of Investigation. Health Care Fraud Tips can be anonymous.
The False Claims Act’s qui tam provisions go further. A private individual, called a relator, can file suit on the government’s behalf. The complaint is filed under seal for at least 60 days while the DOJ investigates and decides whether to intervene. If the government intervenes and recovers, the relator receives 15 to 25 percent of the recovery. If the government declines and the relator pursues the case alone, the share is 25 to 30 percent. The relator also recovers reasonable attorneys’ fees and costs from the defendant.17Office of the Law Revision Counsel. 31 USC 3730 Civil Actions for False Claims
Employees who report healthcare fraud are protected from retaliation under the FCA. A worker who is fired, demoted, suspended, threatened, or harassed for reporting fraud or assisting an FCA investigation is entitled to reinstatement, double back pay with interest, and compensation for special damages including attorneys’ fees. The deadline to file is three years from the retaliatory act.17Office of the Law Revision Counsel. 31 USC 3730 Civil Actions for False Claims The retaliation claim is separate from any qui tam recovery, so a whistleblower can pursue both.