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Medicaid Fraud

Medicaid is a joint federal and state health care program that helps with medical costs for families and individuals with limited income and resources. The Congressional Budget Office has estimated that federal spending for Medicaid in fiscal year 2016 will be $365 billion, with mandatory outlays or spending required by law expected to continue to increase over the next decade.

The amount of money that is funneled into Medicaid spending in Texas is distributed to a wide variety of participants in the health care industry, and several of the claims that are involved may involve come type of fraudulent activity. When an alleged offender engages in certain types of acts that defraud the Medicaid program, that person can face stiff criminal and civil penalties.

Lawyer for Medicaid Fraud Arrests in Dallas, TX

Do you think that you might be under investigation or were you already arrested for alleged fraud relating to Medicaid in North Texas? You should refuse to make any kind of statement to authorities until you have contacted The Law Offices of Richard C. McConathy.

Richard McConathy and Brian Bolton are criminal defense attorneys in Dallas who also aggressively defend clients accused of white collar offenses in Grand Prairie, Irving, Garland, Balch Springs, Richardson, Carrolton, Mesquite, and many other communities in the Dallas-Fort Worth area. They can review your case and discuss all of your legal options as soon as you call (972) 233-5700 to schedule a free consultation.


Overview of Medicaid Fraud in Texas


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State Medicaid Fraud Penalties in Dallas County

Texas Penal Code § 35A.02 establishes that a person commits Medicaid fraud if he or she does any of the following:

  • knowingly makes or causes to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;
  • knowingly conceals or fails to disclose information that permits a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;
  • knowingly applies for and receives a benefit or payment on behalf of another person under the Medicaid program and converts any part of the benefit or payment to a use other than for the benefit of the person on whose behalf it was received;
  • knowingly makes, causes to be made, induces, or seeks to induce the making of a false statement or misrepresentation of material fact concerning either the conditions or operation of a facility in order that the facility may qualify for certification or recertification required by the Medicaid program, including certification or recertification as a hospital, a nursing facility or skilled nursing facility, a hospice, an intermediate care facility for the mentally retarded, an assisted living facility, or a home health agency; or information required to be provided by a federal or state law, rule, regulation, or provider agreement pertaining to the Medicaid program;
  • except as authorized under the Medicaid program, knowingly pays, charges, solicits, accepts, or receives, in addition to an amount paid under the Medicaid program, a gift, money, a donation, or other consideration as a condition to the provision of a service or product or the continued provision of a service or product if the cost of the service or product is paid for, in whole or in part, under the Medicaid program;
  • knowingly presents or causes to be presented a claim for payment under the Medicaid program for a product provided or a service rendered by a person who is not licensed to provide the product or render the service, if a license is required or is not licensed in the manner claimed;
  • knowingly makes or causes to be made a claim under the Medicaid program for either a service or product that has not been approved or acquiesced in by a treating physician or health care practitioner, a service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry, or a product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate;
  • makes a claim under the Medicaid program and knowingly fails to indicate the type of license and the identification number of the licensed health care provider who actually provided the service;
  • knowingly enters into an agreement, combination, or conspiracy to defraud the state by obtaining or aiding another person in obtaining an unauthorized payment or benefit from the Medicaid program or a fiscal agent;
  • is a managed care organization that contracts with the Health and Human Services Commission or other state agency to provide or arrange to provide health care benefits or services to individuals eligible under the Medicaid program and knowingly either fails to provide to an individual a health care benefit or service that the organization is required to provide under the contract, fails to provide to the commission or appropriate state agency information required to be provided by law, commission or agency rule, or contractual provision, or engages in a fraudulent activity in connection with the enrollment of an individual eligible under the Medicaid program in the organization's managed care plan or in connection with marketing the organization's services to an individual eligible under the Medicaid program;
  • knowingly obstructs an investigation by the attorney general of an alleged unlawful act under Texas Penal Code § 35A.02 or under Section 32.039, 32.0391, or 36.002 of the Human Resources Code; or
  • knowingly makes, uses, or causes the making or use of a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to this state under the Medicaid program.

Medicaid fraud crimes are typically classified according to the amounts involved in the alleged offenses, although certain factors such as the specific activities involved or the number of fraudulent claims submitted can also impact sentencing. Medicaid fraud offenses are defined as follows under Texas Penal Code § 35A.02(b):

  • Class C misdemeanor punishable by a fine of up to $500 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is less than $100;
  • Class B misdemeanor punishable by up to 180 days in jail and/or a fine of up to $2,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $100 or more but less than $750;
  • Class A misdemeanor punishable by up to one year in jail and/or a fine of up to $4,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $750 or more but less than $2,500;
  • State jail felony punishable by up to two years in state jail and/or a fine of up to $10,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $2,500 or more but less than $30,000, the offense involved the alleged offender knowingly obstructing an investigation by the attorney general of an alleged unlawful act under Texas Penal Code § 35A.02 or under Section 32.039, 32.0391, or 36.002 of the Human Resources Code, or if the amount of the payment or value of the benefit described by this subsection cannot be reasonably ascertained;
  • Third-degree felony punishable by up to 10 years in prison and/or a fine of up to $10,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $30,000 or more but less than $150,000, or the alleged offender submitted more than 25 but fewer than 50 fraudulent claims under the Medicaid program that each violated Texas Penal Code § 35A.02;
  • Second-degree felony punishable by up to 20 years in prison and/or a fine of up to $10,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $150,000 or more but less than $300,000, or the alleged offender submitted 50 or more fraudulent claims under the Medicaid program that each violated Texas Penal Code § 35A.02; or
  • First-degree felony punishable by up to life or 99 years in prison and/or a fine of up to $10,000 if the amount of any payment or the value of any monetary or in-kind benefit provided or claim for payment made under the Medicaid program, directly or indirectly, as a result of the conduct is $300,000 or more.

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Federal Medicaid Fraud Penalties

The federal government takes Medicaid fraud allegations very seriously and typically prosecutes alleged offenders under one or more of five federal statutes:

  • False Claims Act (Title 31 U.S. Code § 3729) — Submitting false Medicaid claims is punishable by up to five years in prison and civil monetary penalties (CMPs) of up to $11,000 per claim filed plus up to three times the amount of the government’s damages;
  • Anti-Kickback Statute (Title 42 U.S. Code § 1320a–7b) — Knowingly and willfully soliciting or receiving any remuneration directly or indirectly, overtly or covertly, in cash or in kind, in exchange for referrals or the generation of business involving any item or service payable by Medicaid is punishable by fines of up to $25,000 per violation and up to five years in prison for each violation as well as CMPs of up to $50,000 per violation and up to three times the amount of the alleged kickback, and criminal penalties.
  • Physician Self-Referral Law (Title 42 U.S. Code § 1395nn) — Making patient referrals to entities with which the physician or an immediate family member has a financial relationship for “designated health services” that are paid by Medicaid is punishable by CMPs of up to $15,000 per service and civil assessments of to three times the amount claimed.
  • Exclusion Statute (Title 42 U.S. Code § 1320a–7) — Certain excluded physicians who bill directly for treating Medicaid patients or bill indirectly through an employer or a group practice can be ordered to pay CMPs and/or repay any amounts attributable to the services of excluded individuals or entities.
  • Civil Monetary Penalties (Title 42 U.S.C. § 1320a-7a) — Other types of improperly filed claims can result in CMPs ranging from $10,000 to $50,000 per violation for certain offenses or CMPs ranging from $2,000 per individual to three times the amount of payments made to the alleged offender for payments made, directly or indirectly, to induce reduction or limitation of services.

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Dallas Resources for Medicaid Fraud Charges

Civil Medicaid Fraud | Texas Attorney General — The Civil Medicaid Fraud (CMF) Division of the Attorney General’s Office enforces chapter 36 of the Texas Human Resources Code, better known as the Texas Medicaid Fraud Prevention Act (TMFPA). On this website, you can report Medicaid fraud violations, read recent news releases, and learn about related consumer topics. The CMF has field offices all over Texas, including one in Dallas at the following address:

Dallas Medicaid Fraud Control Unit Field Office
1250 W. Mockingbird Lane, Suite 300
Dallas, TX 75247
(214) 922-7046

State Medicaid Investigations Produce Paltry Results — On March 14, 2015, the Texas Tribune published this investigation of the Office of Inspector General's Medicaid Provider Integrity (MPI) unit. The article links to a Sunset Advisory Commission report that found that cost-recovery data from OIG did “not show that the state is receiving an appreciable return on its investment in OIG. Specific to Medicaid provider investigations, OIG reports that it identified $1.1 billion in Medicaid provider overpayments in fiscal years 2012 and 2013, but only $5.5 million in provider overpayments was collected in that period of time.” The Tribune also reported that in the past three years, OIG's budget spiked 30 percent to $48.9 million.


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The Law Offices of Richard C. McConathy | Dallas Medicaid Fraud Lawyer

If you have been indicted, arrested, or think that you could currently be under investigation in North Texas for alleged Medicaid fraud, it is in your best interest to immediately retain legal counsel. The Law Offices of Richard C. McConathy can fight to help you achieve the most favorable outcome to your case, including possibly having the criminal charges reduced or dismissed.

Our Dallas criminal defense attorneys represent clients all over Tarrant County, Collin County, Dallas County, and Denton County. Call (972) 233-5700 or submit an online contact form today to have our lawyers provide a full evaluation of your case during a free, confidential consultation.


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