Medical billing fraud cases usually begin with a pattern, not a person. A payer’s data analytics flags an Orange County practice as an outlier, an auditor pulls a sample of claims, and suddenly every chart note, superbill, and code choice is being re-read by someone whose job is to find false statements. My Rights Law Criminal Defense and DUI Lawyers represents Newport Beach physicians, dentists, chiropractors, mental health providers, billers, and practice owners whose billing has become the subject of an audit or criminal referral. This page explains what billing fraud actually requires, how these cases are built, and what defenses apply.
Billing fraud is not the same as a denied claim or an arguable coding choice. Prosecutors must prove that someone knowingly and intentionally submitted or caused the submission of false or fraudulent claims for payment. California Penal Code section 550 — the state’s insurance fraud statute — applies to health care benefit claims through sections 550(a)(6) through (9), covering knowingly false claims, claims for services not rendered, and multiple claims for the same service. Federally, 18 U.S.C. section 1347 reaches schemes to defraud any health care benefit program, and 18 U.S.C. section 1035 covers materially false statements and documents in health care matters.
Most audits find some of these patterns in almost any busy practice. The legal question is whether the discrepancies reflect knowledge and intent — or confusion, vendor error, staff turnover, and ambiguous payer guidance. That distinction is where billing defense is won or lost.
The typical arc: a payer or DHCS audit letter arrives, a records request follows, an extrapolated overpayment demand lands, and — if the reviewer believes intent — the file is referred for prosecution. Medi-Cal referrals go to the California DOJ’s Division of Medi-Cal Fraud and Elder Abuse; commercial payer referrals route through the Department of Insurance. State charges are filed at the Orange County Superior Court’s Harbor Justice Center at 4601 Jamboree Road; federal cases are filed in the U.S. District Court for the Central District of California. Each step has deadlines, and missing them can forfeit appeal rights that later become evidence problems.
Solo practitioners, group practices, billing vendors, office managers, and clinicians. Owners face exposure for billings they never personally reviewed; staff face exposure for entries they were instructed to make. Referral relationships — especially where marketing companies or “billing consultants” control the coding — create shared risk across multiple practices at once.
Penal Code section 550 violations can be charged as misdemeanors or felonies depending on the amount and history, carrying jail or prison exposure plus restitution and fines. A conviction also triggers payer network termination, Medicare and Medi-Cal exclusion, board discipline, and tax consequences for recouped amounts. Civil False Claims Act liability under 31 U.S.C. section 3729 can add treble damages and per-claim penalties in federal cases. The criminal file is rarely the whole exposure.
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No. An overpayment can result from coding confusion, payer rule changes, or documentation gaps. Fraud requires knowingly false claims. Repayment obligations and criminal liability are different questions with different standards.
Carefully. Audit responses are written statements that prosecutors can later read against you. Having counsel review or submit the response protects you without signaling guilt.
Yes — and the reverse. Prosecutors charge whoever’s knowledge and intent they believe they can prove. That is often the person who touched the claim, not necessarily the license holder.
Do not answer substantive questions, do not destroy or alter anything, and call a defense lawyer immediately. Warrant day conduct shapes the rest of the case.
This page is legal information, not legal advice, and reading it does not create an attorney-client relationship. Laws and enforcement priorities change, and outcomes depend on the facts of each case.
Newport Beach office: My Rights Law Criminal Defense and DUI Lawyers - Newport Beach, 4695 MacArthur Ct #1100, Newport Beach, CA 92660. Call 888-702-8882 for a free confidential consultation.
This page was written by the My Rights Law Editorial Team and reviewed for legal accuracy by Bobby Shamuilian.
Attorney Shamuilian is the founder and managing partner of My Rights Law and is widely recognized as a legal authority, frequently appearing as a legal analyst and TV pundit on national news outlets.
He has earned a perfect “10.0 – Top Attorney” rating on AVVO and a “10.0” rating on Justia, and has been named among the “Top 40 Under 40” and the “Top 100 Trial Lawyers” by The National Trial Lawyers.
With his proven expertise and dedication, Mr. Shamuilian is committed to protecting your rights and achieving the best possible outcome for your case.
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