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What California state agency investigates medical billing practices?
The Medical Board of California (“MBC”) investigates medical billing practices in California. The MBC is a state governmental agency within the California Department of Consumer Affairs.
The Board’s mission is to review and investigate complaints about, and discipline physicians and allied healthcare professionals.
A few examples of the types of complaints reviewed by the Medical Board include:
unprofessional conduct (e.g., filing fraudulent bills or insurance claims, misleading advertising, arrest or conviction),
office practice issues (e.g., failure to provide medical records to patients, failure to sign death certificates, patient abandonment), and
prescribing issues (e.g., violation of drug laws, excessive/under-prescribing).
Please note that medical billing can constitute a crime in California if it amounts to medical billing fraud, under PC 550. PC 550 is the California statute that makes health care fraud a crime. Health care fraud includes medical billing fraud.
Examples of this type of fraud include:
billing for medical services or procedures that the patient never actually received.
billing for more expensive services than the ones the patient received (this is known as “upcoding”).
submitting a so-called duplicate claim for the same procedure – or, in other words, billing the medical insurance provider for a service that actually was delivered to a patient, but then submitting a second claim for the service even though the patient only received it once.
A violation of PC 550 can be charged as either a misdemeanor or a felony depending on the facts of the case. And, the crime is punishable by:
imprisonment in the county jail for up to five years, and/or
a fine reaching up to $50,000.
Luckily, there are legal defenses available if a physician is accused of an unlawful billing practice under PC 550. For example, the defendant may assert that he made a mistake when billing.
The Board enforces the Medical Practice Act and implements regulations in accordance with its mission of public protection.
Examples of the types of complaints reviewed by the Medical Board (not mentioned above) include:
substandard care (e.g., misdiagnosis, negligent treatment, delay in treatment),
impairment (e.g., drug, alcohol, mental issues), and
unlicensed practice or aiding and abetting unlicensed practice.
A thorough investigation conducted by the MBC may involve:
obtaining medical records or other information/evidence,
locating and interviewing the complainant, any witnesses, and the physicians,
obtaining expert review of the case,
drafting and serving investigational subpoenas,
inspecting the location where the allegations occurred,
executing search warrants, and
conducting undercover operations.
If, after an investigation, the MBC determines that a physician was engaged in a criminal act, then the Board may subject that physician to discipline. This is provided the criminal act was “substantially related” to the qualifications, functions, or duties of the physician.
Discipline for criminal acts can take the form of:
license suspension, or
Can medical billing be illegal in California?
Medical billing can constitute a crime in California if it amounts to medical billing fraud, per Penal Code 550.
PC 550 is the California statute that makes health care fraud a crime. Health care fraud is also commonly called:
medical insurance billing fraud,
health insurance fraud,
Medicare fraud, or
Per PC 550, there are several ways that a physician may commit health care fraud via billing practices. Some examples include:
a doctor performs a service that the patient didn’t need, and he then bills the insurance carrier for it,
a physician submits multiple claims for the same medical service (for example, double billing the insurance provider).
a physician submits a “false or fraudulent” claim for health care benefits, and
a doctor sends a bill to a health insurer for services that were undercharged for in the past, without also sending at the same time a bill for services that were overcharged for in the past.
What are the penalties for medical billing fraud?
The potential criminal penalties for medical billing fraud depend on whether the amount of the fraudulent claim is greater than $950.
If a claim adds up to $950 or less, then health care fraud is a misdemeanor in California. As such, the crime is punishable by:
a fine of up to $1,000, and/or
up to six months in a county jail.
If a claim adds up to more than $950, then health care fraud becomes a “wobbler” in California. This means that it can be charged as either a misdemeanor or a felony.
If charged as a misdemeanor, the crime is punishable by:
up to one year in county jail, and/or
a fine of up to $10,000.
If charged as a felony, then the offense is punishable by:
two, three, or five years in county jail, and/or
a maximum fine of $50,000.
Are there legal defenses available if a person is accused under PC 550?
Luckily, there are legal defenses available if a physician is accused of medical billing fraud or health care fraud under PC 550. A good defense can work to reduce a charge or even get it dismissed.
A few common legal defenses include that the defendant-physician:
made a mistake within his billing practices,
did not act with the specific intent to defraud an insurance carrier, or some other party, and/or
was falsely arrested or arrested without probable cause.
About the Author
A former Los Angeles prosecutor, attorney Neil Shouse graduated with honors from UC Berkeley and Harvard Law School (and completed additional graduate studies at MIT). He has been featured on CNN, Good Morning America, Dr Phil, The Today Show and Court TV. Mr Shouse has been recognized by the National Trial Lawyers as one of the Top 100 Criminal and Top 100 Civil Attorneys.