California Medi-Cal Fraud Defense Lawyers

Medi-Cal is California’s Medicaid program. It provides public health insurance coverage for low income adults and children. Medi-Cal was instituted in 1966 and now accounts for about one-quarter of California’s state budget. It provides health coverage for approximately one out of every six Californians.

However, Medi-Cal fraud…a California "white collar" crime…is on the rise and costs the state over a billion dollars each year. Because of these facts, Medi-Cal fraud cases are prosecuted aggressively.

That’s where we come in. As former prosecutors and law enforcement officers, we have experience investigating, prosecuting, and defending Medi-Cal fraud cases. This inside knowledge allows us to provide you with the most comprehensive defense …and the best chance to fight your Medi-Cal fraud charges successfully.

False accusations, an overloaded bureaucracy, and even honest mistake are just a few defenses that may help us secure your acquittal or…at the very least…reduced charges.

In order to help you better understand Medi-Cal fraud, our Los Angeles fraud defense lawyers¹ will address the following:

What are Medi-Cal and Medi-Cal Fraud?

Examples of Medi-Cal Fraud

Penalties, Punishment, and Sentencing for Medi-Cal Fraud

Fighting Against Medi-Cal Fraud Charges

Medi-Cal Fraud and Related Offenses

If, after reading this article, you have additional questions, we invite you to contact us at Shouse Law Group.

You may also find helpful information in our related articles on California White Collar Crime, California Theft Offenses, Nursing Home Elder Abuse, Workers’ Compensation Fraud, and Insurance Fraud.

What are California’s Medi-Cal Program and Medi-Cal Fraud?

California’s Medi-Cal Program

California’s Medi-Cal program provides public health insurance to low income individuals, including

• adults, children, and seniors,



• persons with disabilities,



• pregnant women, and



• those suffering from illness or diseases such as tuberculosis, breast cancer, and HIV/AIDS.

Medi-Cal coverage does not apply to every low-income individual. Eligibility is determined according to very strict guidelines, which are primarily…although not entirely…based on one’s earnings. To find out more about Medi-Cal coverage, visit the California Department of Health Care Services website.

Medi-Cal’s health insurance program is equally funded by the state and the federal governments. Medi-Cal contracts with established preventative and primary health care professionals in order to provide health care to the individuals referenced above.

Medi-Cal Fraud

Medi-Cal fraud refers to intentional attempts to receive unauthorized payments or benefits from the Medi-Cal program. Although the most commonly prosecuted Medi-Cal fraud cases involve health care providers billing for unauthorized or unnecessary services or supplies, patients can be charged with Medi-Cal fraud for falsifying information in order to try to obtain benefits as well.

In direct response to an astounding increase in Medi-Cal fraud, Governor Gray Davis established the Governor’s Medi-Cal Fraud Task Force in 1999. This multi-agency unit is comprised of ten state agencies which include the California Department of Health Care Services, the State Department of Justice, the Federal Bureau of Investigation (FBI), and the U.S. Attorney’s Office. This task force is committed to combating Medi-Cal fraud.

In fact, the California Attorney General’s Medi-Cal Fraud and Elder Abuse Unit even offers a reward for information about specific instances of Medi-Cal fraud when that information results in a conviction.²

Medi-Cal fraud is specifically prohibited under California’s Welfare and Institutions Code. It is generally prohibited under California’s Penal Code sections dealing with generic insurance fraud.

Welfare and Institutions Code 14014 WIC penalizes individuals who make false claims about their eligibility in the Medi-Cal program.³ Welfare and Institutions Code 14107 WIC punishes providers who make fraudulent claims for reimbursement or who solicit or receive bribes or "kickbacks" for referrals for services or merchandise.⁴

California Penal Code 550 PC prohibits knowingly

• preparing,



• making, or



• submitting

fraudulent health insurance claims.⁵

Examples of Medi-Cal Fraud

Medi-Cal fraud is actually a California theft crime that can range from simple overbilling to sophisticated identity theft…its examples are endless.

Since provider fraud is the most common type of Medi-Cal fraud, let’s look at some examples dealing with this type of Medi-Cal fraud first:

• doctors ordering unnecessary lab tests for (or performing unnecessary procedures on) their patients,



• providers "padding" or "inflating" actual claims,



• doctors allowing untrained, uncertified assistants to treat patients (then billing Medi-Cal for a more expensive "doctor" visit),



• doctors allowing non Medi-Cal providers to use their billing privileges,



• medical supply companies billing for equipment that was neither ordered nor delivered,



• medical labs billing Medi-Cal for blood tests for pretend or "ghost" patients, and



• paying and/or receiving kickbacks for Medi-Cal billing referrals.

And although patient Medi-Cal fraud is less rampant than provider fraud, it still subjects an offender to criminal penalties. Some examples include:

• allowing an ineligible person to use your Medi-Cal identification card and benefits,



• selling your Medi-Cal identifying information,



• stating false income and asset information on your Medi-Cal application, in order to gain eligibility, and



• accepting money from a particular Medi-Cal provider in exchange for using his/her services.

It is important to understand that these are only a small sample of the types of Medi-Cal fraud that prosecutors pursue. Any intentional misuse of Medi-Cal benefits or services is a criminal offense.

Penalties, Punishment, and Sentencing for Medi-Cal Fraud

Medi-Cal fraud is what’s known as a "wobbler". This means that

1. depending on the circumstances of the exact offense, and



2. on your criminal history,

prosecutors may elect to charge you with Medi-Cal fraud as either a misdemeanor or a felony. One of the key factors is the cost of the services or supplies that were fraudulently billed.

If the value exceeds $400, the offense is a wobbler, pursuant to Penal Code 487 PC grand theft. If the value of the fraudulently obtained services or supplies is $400 or less, prosecutors will file misdemeanor charges in accordance with Penal Code 484 PC petty theft.

That said, it is important to remember that cost isn’t the only factor in determining the seriousness of a Medi-Cal fraud charge. As stated above, prosecutors also weigh your criminal history and the facts of the case.

Misdemeanor Medi-Cal fraud

Which penalties you face will depend on the exact fraud violation for which you are convicted. Misdemeanor Medi-Cal fraud penalties include any or all of the following⁶:

• informal (otherwise known as "summary") probation,



• up to one year in a county jail,



• a fine of up to $10,000, or fines limited to three times the amount of the fraudulently obtained amount of money or benefits, and



• forfeiture of any fraudulently-obtained assets.

Felony Medi-Cal fraud

Similarly, there are a variety of felony Medi-Cal fraud penalties that judges may impose depending again, on the specific offense for which you are convicted. Felony Medi-Cal fraud penalties include any or all of the following⁷:

• formal probation,



• 16 months to five years in the California State Prison (and (1) an additional and consecutive 4 years for every person who…as a result of and because of the fraud…suffers a great or serious bodily injury, or (2) 25 years to life if any individual dies as a result of the fraud),



• up to $50,000 in fines or double the amount of the fraud (whichever is greater), and



• asset forfeiture.

While it seems pretty unlikely that someone would suffer "a serious or great bodily injury" or would be killed as a result of Medi-Cal fraud, it’s actually not as obscure as it sounds.

• Reusing syringes,



• performing unnecessary medical procedures, and/or



• assigning unqualified staff to provide treatment,

can all result in unintended, devastating consequences. These kinds of intentional, reckless acts could constitute "criminal negligence" which would elevate the provider’s criminal culpability…and result in the severe penalties described above.

Fighting Against Medi-Cal Fraud Charges

And now for the good news…there are a variety of Medi-Cal fraud defenses that a skilled California criminal defense attorney who has successfully defended these types of cases can present on your behalf. Below are examples of some of the most common.

False allegations / Mistake / Lack of intent to defraud

When it comes to entering billing codes, patient information, or notes into a computer, there is always a certain amount of expected human error.

As Orange County criminal defense lawyer John Murray explains⁸, "Just because drugs, equipment, a service, or procedure was billed…or even billed more than once…doesn’t mean that it was a correct or intentional entry. In fact, billing errors are extremely commonplace in the medical industry!"

Similarly, it is difficult to determine what constitutes an "unnecessary" procedure. What one doctor thinks is necessary, another may not. As long as you can show that your decision to perform a questionable procedure wasn’t completely whimsical, it would be difficult to prove that it was unnecessary and therefore fraudulent.

And as for patients charged with medi-cal fraud…perhaps you didn’t "sell" your identification card, but it was stolen (and you didn’t find out until you were accused of fraud). Maybe you did put incorrect information on a Medi-Cal application, but it was information that you honestly (but mistakenly) believed to be true.

Without fraudulent intent, there is no crime.

Insufficient evidence

Proving Medi-Cal fraud can be a rigorous task. If the prosecution’s case has holes…for example, they don’t have witnesses to support their case…they can’t show a "pattern" of fraudulent activity on your part...or the authorities conducted a shoddy investigation…it would be very difficult to convict you of Medi-Cal fraud.

Reduced charges

Even if the prosecution’s evidence is overwhelming, we can usually negotiate a lesser charge or lesser sentence on your behalf. Many times, by cooperating with the investigators and promptly returning any wrongfully-gained proceeds, we can strike a deal for leniency or even amnesty. We maintain excellent relationships with local prosecutors and judges which allow us the opportunity to obtain the most favorable results for our clients.

Medi-Cal Fraud and Related Offenses

Medi-Cal fraud ties in to a number of other related California offenses. Sometimes the offenses are related because they are both committed in similar fashion…and other times the offenses overlap.

The following is an example of the types of offenses that are closely related to California Medi-Cal fraud.

California nursing home elder abuse

If, for example, a nursing home was relying on untrained staff to care for their elderly patients…and billing Medi-Cal for actual "doctor" visits…the nursing home administration would be guilty of Medi-Cal fraud and California nursing home elder abuse.

California workers’ compensation fraud

California workers’ compensation fraud is similar to Medi-Cal fraud in that both offenses are committed in much the same way. Doctors, medical billing staff, employers, and employees can all submit fraudulent claims to receive extra money and/or benefits.

California insurance fraud

Medi-Cal fraud and, for that matter, workers’ comp fraud, are both covered under the umbrella of California insurance fraud. The penalties for insurance fraud are severe and may include criminal and civil punishment.

If you have additional questions about Medi-Cal fraud, or you would like to discuss your case confidentially with one of our California criminal defense lawyers, we invite you to contact us at Shouse Law Group.

We have local criminal law offices in Los Angeles, San Diego, Riverside, Orange County, San Bernardino, Ventura, San Jose, the San Francisco Bay area, and several nearby cities to conveniently serve you.

Legal References:

¹Our Los Angeles fraud defense lawyers have local criminal law offices in Beverly Hills, Burbank, Glendale, Lancaster, Long Beach, Los Angeles, Pasadena, Pomona, Torrance, Van Nuys, West Covina, and Whittier.

²California Welfare and Institutions Code 14107.12 -- Reward for the return of public funds taken from the Medi-Cal program. This section sets for the requirements for rewarding an individual who reports Medi-Cal fraud, as long as the information leads to a conviction and return of the fraudulently obtained funds.

³California Welfare and Institutions Code 14014 WIC -- False declarations as to eligibility; willful and knowing encouragement to make false declarations; penalties; implementation. ("(a) Any person receiving health care for which he or she was not eligible on the basis of false declarations as to his or her eligibility or any person making false declarations as to eligibility on behalf of any other person receiving health care for which that other person was not eligible shall be liable for repayment and shall be guilty of a misdemeanor or felony depending on the amount paid on his or her behalf for which he or she was not eligible, as specified in Section 487 of the Penal Code. (b)(1) Any person who willfully and knowingly counsels or encourages any individual to make false statements or otherwise causes false statements to be made on an application, in order to receive health care services to which the applicant is not entitled, shall be liable to the Medi-Cal program for damages incurred for the cost of services rendered to the applicant. (2) Paragraph (1) shall be implemented to the extent permitted by federal law and to the extent that implementation of paragraph (1) does not affect the availability of federal financial participation.")

⁴California Welfare and Institutions Code 14107 WIC -- Fraudulent claims; intent; punishment; other enforcement remedies. ("(a) Any person, including any applicant or provider as defined in Section 14043.1, or billing agent, as defined in Section 14040.1, who engages in any of the activities identified in subdivision (b) is punishable by imprisonment as set forth in subdivisions (c), (d), and (e), by a fine not exceeding three times the amount of the fraud or improper reimbursement or value of the scheme or artifice, or by both this fine and imprisonment. (b) The following activities are subject to subdivision (a): (1) A person, with intent to defraud, presents for allowance or payment any false or fraudulent claim for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (2) A person knowingly submits false information for the purpose of obtaining greater compensation than that to which he or she is legally entitled for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (3) A person knowingly submits false information for the purpose of obtaining authorization for furnishing services or merchandise under this chapter or Chapter 8 (commencing with Section 14200). (4) A person knowingly and willfully executes, or attempts to execute, a scheme or artifice to do either of the following: (A) Defraud the Medi-Cal program or any other health care program administered by the department or its agents or contractors. (B) Obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, the Medi-Cal program or any other health care program administered by the department or its agents or contractors, in connection with the delivery of or payment for health care benefits, services, goods, supplies, or merchandise…")

See also California Welfare and Institutions Code 14017.2 WIC -- Kickbacks, bribes or rebates; punishment. ("(a) Any person who solicits or receives any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind, either: (1) In return for the referral, or promised referral, of any individual to a person for the furnishing or arranging for the furnishing of any service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200); or (2) In return for the purchasing, leasing, ordering, or arranging for or recommending the purchasing, leasing, or ordering of any goods, facility, service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or state prison, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment in the state prison. (b) Any person who offers or pays any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind, either: (1) To refer any individual to a person for the furnishing or arranging for furnishing of any service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200); or (2) To purchase, lease, order, or arrange for or recommend the purchasing, leasing, or ordering of any goods, facility, service, or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or state prison, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment in the state prison…")

⁵California Penal Code 550 PC -- False or fraudulent claims or statements; prohibited acts. ("(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following:…(5) Knowingly prepare, make, or subscribe any writing, with the intent to present or use it, or to allow it to be presented, in support of any false or fraudulent claim. (6) Knowingly make or cause to be made any false or fraudulent claim for payment of a health care benefit. (7) Knowingly submit a claim for a health care benefit that was not used by, or on behalf of, the claimant. (8) Knowingly present multiple claims for payment of the same health care benefit with an intent to defraud. (9) Knowingly present for payment any undercharges for health care benefits on behalf of a specific claimant unless any known overcharges for health care benefits for that claimant are presented for reconciliation at that same time…")

⁶California Welfare and Institutions Code 14014 WIC -- False declarations as to Medi-Cal eligibility…("(a) Any person receiving health care for which he or she was not eligible on the basis of false declarations as to his or her eligibility or any person making false declarations as to eligibility on behalf of any other person receiving health care for which that other person was not eligible shall be liable for repayment and shall be guilty of a misdemeanor or felony depending on the amount paid on his or her behalf for which he or she was not eligible, as specified in Section 487 of the Penal Code.")

See also California Welfare and Institutions Code 14107 WIC -- Fraudulent Medi-Cal claims; intent; punishment; other enforcement remedies. ("California Welfare and Institutions Code 14107 WIC -- Fraudulent claims; intent; punishment; other enforcement remedies. ("(a) Any person, including any applicant or provider as defined in Section 14043.1, or billing agent, as defined in Section 14040.1, who engages in any of the activities identified in subdivision (b) is punishable by imprisonment as set forth in subdivisions (c) , (d), and (e), by a fine not exceeding three times the amount of the fraud or improper reimbursement or value of the scheme or artifice, or by both this fine and imprisonment…(g) Pursuant to Section 923 of the Penal Code, the Attorney General may convene a grand jury to investigate and indict for any of the activities subject to fine, imprisonment, or asset forfeiture under this section.")

See also California Welfare and Institutions Code 14107.2 WIC -- Medi-Cal kickbacks and bribes. ("(2) In return for the purchasing, leasing, ordering, or arranging for or recommending the purchasing, leasing, or ordering of any goods, facility, service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or state prison, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment in the state prison. (b) Any person who offers or pays any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind, either: (1) To refer any individual to a person for the furnishing or arranging for furnishing of any service or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200); or (2) To purchase, lease, order, or arrange for or recommend the purchasing, leasing, or ordering of any goods, facility, service, or merchandise for which payment may be made, in whole or in part, under this chapter or Chapter 8 (commencing with Section 14200), is punishable upon a first conviction by imprisonment in a county jail for not longer than one year or state prison, or by a fine not exceeding ten thousand dollars ($10,000), or by both that imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment in the state prison.")

See also California Penal Code 550 PC -- False or fraudulent Medi-Cal claims. ("(2) Every person who violates paragraph (6), (7), (8), or (9) of subdivision (a) [see endnote 5, above] is guilty of a public offense. (A) When the claim or amount at issue exceeds four hundred dollars ($400), the offense is punishable by imprisonment in the state prison for two, three, or five years, or by a fine not exceeding fifty thousand dollars ($50,000) or double the amount of the fraud, whichever is greater, or by both that imprisonment and fine, or by imprisonment in a county jail not to exceed one year, by a fine of not more than ten thousand dollars ($10,000), or by both that imprisonment and fine. (B) When the claim or amount at issue is four hundred dollars ($400) or less, the offense is punishable by imprisonment in a county jail not to exceed six months, or by a fine of not more than one thousand dollars ($1,000), or by both that imprisonment and fine, unless the aggregate amount of the claims or amount at issue exceeds four hundred dollars ($400) in any 12-consecutive-month period, in which case the claims or amounts may be charged as in subparagraph (A).")

⁷California Welfare and Institutions Code 14014 WIC -- False declarations as to Medi-Cal eligibility…("(a) Any person receiving health care for which he or she was not eligible on the basis of false declarations as to his or her eligibility or any person making false declarations as to eligibility on behalf of any other person receiving health care for which that other person was not eligible shall be liable for repayment and shall be guilty of a misdemeanor or felony depending on the amount paid on his or her behalf for which he or she was not eligible, as specified in Section 487 of the Penal Code.")

See also California Welfare and Institutions Code 14107 WIC -- Fraudulent Medi-Cal claims…(" (c) A violation of subdivision (a) [endnote 4, above] is punishable by imprisonment in a county jail, or in the state prison for two, three, or five years. (d) If the execution of a scheme or artifice to defraud as defined in paragraph (4) of subdivision (b) is committed under circumstances likely to cause or that do cause two or more persons great bodily injury, as defined in Section 12022.7 of the Penal Code, or serious bodily injury, as defined in paragraph (4) of subdivision (f) of Section 243 of the Penal Code, a term of four years, in addition and consecutive to the term of imprisonment imposed in subdivision (c), shall be imposed for each person who suffers great bodily injury or serious bodily injury. The additional terms provided in this subdivision shall not be imposed unless the facts showing the circumstances that were likely to cause or that did cause great bodily injury or serious bodily injury to two or more persons are charged in the accusatory pleading and admitted or found to be true by the trier of fact. (e) If the execution of a scheme or artifice to defraud, as defined in paragraph (4) of subdivision (b) results in a death which constitutes a second degree murder, as defined in Section 189 of the Penal Code, the offense shall be punishable, upon conviction, pursuant to subdivision (a) of Section 190 of the Penal Code. (f) Any person, including an applicant or provider as defined in Section 14043.1, or billing agent, as defined in Section 14040.1, who has engaged in any of the activities subject to fine or imprisonment under this section, shall be subject to the asset forfeiture provisions for criminal profiteering. (g) Pursuant to Section 923 of the Penal Code, the Attorney General may convene a grand jury to investigate and indict for any of the activities subject to fine, imprisonment, or asset forfeiture under this section.")

See also California Welfare and Institutions Code 14107.2 WIC -- Medi-Cal fraud bribes and kickbacks, endnote 5, above.

See also California Penal Code 550 PC -- False or fraudulent Medi-Cal claims…(" (c)(1) Every person who violates paragraph (1), (2), (3), (4), or (5) of subdivision (a) [endnote 5, above] is guilty of a felony punishable by imprisonment in the state prison for two, three, or five years, and by a fine not exceeding fifty thousand dollars ($50,000), or double the amount of the fraud, whichever is greater. (2) Every person who violates paragraph (6), (7), (8), or (9) of subdivision (a) [endnote 5, above] is guilty of a public offense. (A) When the claim or amount at issue exceeds four hundred dollars ($400), the offense is punishable by imprisonment in the state prison for two, three, or five years, or by a fine not exceeding fifty thousand dollars ($50,000) or double the amount of the fraud, whichever is greater, or by both that imprisonment and fine, or by imprisonment in a county jail not to exceed one year, by a fine of not more than ten thousand dollars ($10,000), or by both that imprisonment and fine.")

⁸ Orange County criminal defense lawyer John Murray represents clients accused of California fraud cases, including Medi-Cal fraud cases throughout Orange County, including Fullerton, Anaheim, Santa Ana, Irvine and Westminster.

Join us to discuss your criminal case at any of our
local offices: You can also contact us 24/7 at
888.327.4652 for a free consultation