NRS § 686A.2815 is the Nevada law that defines healthcare insurance fraud. This is when medical providers purposely overbill insurance companies or accept payments they are not entitled to. Healthcare fraud is a Category D felony punishable by
- 1 to 4 years in Nevada prison,
- fines up to $5,000.00, and
- restitution to any victims.
The offense is sometimes called “medical insurance fraud” or “medical billing fraud.”
NRS 686A.2815 states that “Insurance fraud” means knowingly and willfully… [p]resenting … a claim for payment or other benefits under a policy of insurance, if the person … knows that the statement … contains false or misleading information concerning any fact material to that claim.
In addition to facing possible fines and prison, defendants can have their medical licenses suspended or revoked.
In this article, our Las Vegas criminal defense attorneys answer frequently asked questions about healthcare fraud in Nevada:
1. What is healthcare fraud in Nevada?
An NRS 686A.2815 violation is when doctors or their staff deliberately swindle health insurance companies out of money they did not earn.1
Example: Oncologist Dr. Smith treats his patient John with a standard form of chemotherapy. But Dr. Smith deliberately bills John’s insurance program United Healthcare for a more expensive type of medical service covered by John’s health plan. (This type of fraudulent medical records billing for pricier procedures is called upcoding.) Since Dr. Smith is intentionally trying to get United Healthcare to pay him more money than he has eligibility for, Dr. Smith could be convicted of health insurance fraud in Las Vegas.
Dr. Smith, in the above example, would still be criminally liable if United Healthcare caught the fraud before they overpay. A defendant may be convicted of fraud whether or not the victim loses any money. Nor does it matter whether the insurer is private or government-funded.
In addition to upcoding, other common examples of health insurance fraud include:
- Double-billing for medical procedures that were performed only once (“making duplicate claims”);
- Charging for health care procedures, office visits, surgeries, and tests that were never rendered;
- Charging for health care procedures or equipment that were unnecessary or excessive;
- Exaggerating / inflating costs of performing medical procedures;
- Falsifying patient records to justify tests and operations that are unnecessary;
- Using unnecessary equipment or meds in exchange for kickbacks from pharmaceutical companies (such as cash or other gifts);
- Unbundling services (submitting bills in piecemeal, which usually increases the costs);
- Using increased billing codes or any other type of false billing; and
- Conspiring with anyone – or aiding and abetting – do any of the above
Health insurance fraud also goes by the names “medical billing fraud,” “HMO fraud,” and “Medicare fraud.” In Nevada, cases are prosecuted by the Nevada Attorney General’s Office, not the local district attorney’s office.
Potential defendants
Note that any type of health care worker — and not just physicians — may be liable for NRS 686A.2815 violations.2 Other potential defendants include:
- Physician’s assistants (PAs)
- Dentists
- Chiropractors
- Therapists
- Nurses (RNs)
- Medical equipment suppliers
- Hospital management and staff
- Medical laboratory management and staff
- Drug researchers
- Nursing home or group home management and staff
- Medical support staff, including administrative assistants and record clerks
Federal health care fraud
Health insurance fraud is a crime under not only Nevada law but also federal law. Depending on the case, defendants may face fraud charges in both state court and federal court.
The federal crime of health care fraud often involves federal health insurers such as Medicare.3
NRS 686A.2815 prohibits intentionally deceiving insurance companies in Nevada.
2. What are the defenses?
Two defenses to fight NRS 686A.2815 charges are:
- The defendant had no intention to defraud, or
- Law enforcement committed misconduct
Lack of fraudulent intent
A key element of NRS 686A.2815 is that the defendant intentionally gives a health insurer false information to defraud them. It is no crime to accidentally give false information. This is true even if the mistake causes the health insurer to pay out extra money.4
Nevada judges understand that health insurers are confusing bureaucracies with complicated procedures. And they expect that innocent people will make honest errors:
Example: Dr. Jones is a neurosurgeon in Henderson who buys a new CT scan machine that is cheaper to operate than his old one. But by mistake he continues to bill his patients’ insurers for scans done under the old CT machine. Because Dr. Jones had no intention of tricking the insurance companies, his overbilling for healthcare services does not make him criminally liable for health insurance fraud. (However, the insurers may be able to sue Dr. Jones in civil court to recoup the extra money they paid due to his oversight of providing false insurance information.)
Even if Dr. Jones, in the above example, was prosecuted in federal instead of state court, the criminal charges should still be dismissed. This is because his actions were a pure oversight, not part of a healthcare fraud scheme or artifice.5
Police misconduct
Sometimes Nevada courts dismiss criminal charges solely due to police error, such as:
- Making unlawful arrests,
- Manipulating evidence,
- Coercing a confession, and/or
- Carrying out an unlawful search and seizure6
For instance, if law enforcement performs an illegal search while investigating a health insurance fraudulent claim case, then the defendant’s attorney can file a motion to suppress evidence. A suppression motion asks the judge to throw out any evidence found from the illegal police search.
If the court grants the motion, then the D.A. may be left with too little evidence to sustain a conviction for healthcare fraud.
3. What is the sentence for healthcare fraud?
Health insurance fraud in Nevada is a category D felony. Violating NRS 686A.2815 carries:
- 1 – 4 years in Nevada State Prison;
- Restitution to the insurance company;
- Up to $5,000 (at the judge’s discretion);
- Court costs; and
- Reimbursement costs to the state for investigating and prosecuting the insurance fraud case7
However, prosecutors may be willing to negotiate a charge reduction or even a dismissal.
Depending on the case, healthcare providers may also face suspension or revocation of their professional license. So, in addition to criminal penalties, defendants face the loss of their livelihood.8
Federal penalties:
Federal law carries harsher penalties than Nevada law for health insurance fraud. And the extent of the sentence depends on whether the patient sustains serious harm or death:9
| Federal healthcare fraud offense | Penalties under 18 USC 1347 |
|---|---|
| If no bodily injury results | Up to 10 years in prison plus possible fines |
| If serious bodily injury results | Up to 20 years in prison plus possible fines |
| If death results | Up to life in prison plus possible fines |
Healthcare system insurance fraud is both a federal crime and a Nevada state crime.
Unlike in Nevada state court, billing fraud is a strict liability offense in federal court. Federal law judges presume that false billing indicates an intent to defraud. Prosecutors do not have to prove that the defendant meant to defraud insurers.
4. Can the criminal record get sealed?
Yes. An NRS 686A.2815 conviction can be sealed in the state of Nevada five years after the case ends. But there is no waiting period for a record seal if the charge gets dismissed.10
Learn more about getting criminal records sealed in Nevada.
5. What are the immigration consequences?
Healthcare program fraud is an aggravated felony, which is deportable.11 However, a skilled criminal defense attorney may be able to persuade the prosecutor to lessen the charge to a non-deportable offense.
Any aliens charged with a crime should retain an attorney immediately in an effort to safeguard their resident status.
6. Related offenses
Forgery
Forgery (NRS 205.090) is when someone intentionally tries to defraud another person or company by using falsified documents. A common example is signing someone else’s name to a contract.
As a category D felony, a Nevada forgery conviction carries:
- 1 – 4 years in prison;
- Up to $5,000 in fines (at the judge’s discretion); and
- Restitution
Commercial bribery
Commercial bribery (NRS 207.295) is when a company employee is offered gifts, cash, or benefits in return for making a business decision without the employer’s permission. As a Nevada misdemeanor, violating NRS 207.295 carries
- Up to 6 months in jail; and/or
- Up to $1,000 in fines
Obtaining money by false pretenses
Obtaining money by false pretenses (NRS 205.380) is when people knowingly misrepresent themselves to obtain money from someone else relying on their misrepresentation. A common example in Nevada is getting paid for a job the person never performed.
Fraudulently obtaining less than $1,200 is a misdemeanor, carrying:
- Up to 6 months in jail; and/or
- Up to $1,000 in fines; and
- Restitution
Fraudulently obtaining $1,200 or more is a felony, carrying prison, fines, and restitution.
Illegally obtaining prescription drugs
Illegally obtaining prescription drugs (NRS 453.391) is a category C felony. The Nevada penalty is:
- 1 – 5 years in prison; and
- Up to $10,000 in fines
It does not matter whether the drug is an opioid or a non-addictive medication.
Helpful Links:
- Nevada Medicaid Fraud Control Unit (MFCU)
- Nevada Attorney General Hotline for Health Care Fraud Investigations
- Nevada Division of Public Health and Behavioral Health
- Healthcare Fraud Prevention Partnership Participation, Medicaid.gov.
- Health Care Fraud Unit, Department of Justice
- U.S. Attorneys, Department of Justice (DOJ)
- U.S. Department of Health and Human Services – Report Fraud
- U.S. Department of Health and Human Services – Whistleblower Protection Coordinator
- FBI – Health Care Fraud (Washington, D.C.)
- Centers for Medicare and Medicaid Services (CMS)
- Office of Inspector General (OIG)
- National Correct Coding Initiative
Legal References:
- NRS 686A.2815.
- Id.
- 18 U.S.C. § 1347; also see 42 U.S.C. § 1320a-7a; Anti Kickback law (42 U.S.C. § 1320a-7b); Stark Law (42 U.S.C. § 1395); False Claims Act (31 U.S.C. §§ 3729 – 3733); 18 U.S.C § 1035.
- See Perelman v. State, (1999) 981 P.2d 1199, 115 Nev. 190.
- 18 U.S.C. § 1347.
- Illinois v. Gates, (1983) 462 U.S. 213, 103 S. Ct. 2317.
- NRS 686A.291.
- NRS 630.160.
- 18 U.S.C. § 1347(a)(2).
- NRS 179.245; NRS 179.255.
- See, for example, United States v. Popov, (9th Cir., 2014) 742 F.3d 911.