18 USC 1347 — Health Care Fraud: Penalties, Elements & Defenses

18 USC 1347 is the primary federal health care fraud statute. It makes it a crime to knowingly and willfully execute, or attempt to execute, a scheme to defraud a health care benefit program — or to obtain its money or property through false or fraudulent pretenses — in connection with the delivery of or payment for health care benefits, items, or services. A conviction carries up to 10 years in federal prison per count, with higher penalties when the offense causes serious bodily injury or death.

This page explains what 18 USC 1347 actually says, the elements the prosecution must prove, the penalties at each level, and how these charges are commonly challenged. It is intended as a plain-English legal reference for anyone trying to understand a federal health care fraud charge in California. If you are already under investigation or charged, our overview of how we defend these cases is on our Federal Health Care Fraud Defense page.

Summary of the Statute

Enacted as part of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, 18 USC 1347 gave federal prosecutors a dedicated tool for charging fraud against health care programs. Before it existed, the government had to rely on general statutes like mail and wire fraud.

In substance, the statute prohibits two things. First, knowingly and willfully executing or attempting to execute a scheme to defraud any health care benefit program. Second, using false or fraudulent pretenses, representations, or promises to obtain money or property owned or controlled by such a program. Both must be connected to the delivery of, or payment for, health care benefits, items, or services.

The reach of the statute is deliberately broad. A “health care benefit program,” defined in 18 USC 24(b), means any public or private plan or contract affecting commerce under which any medical benefit, item, or service is provided. That covers Medicare, Medicaid, and TRICARE, but also private insurers — so the statute is not limited to government programs. Importantly, the statute also makes clear that a defendant does not need to know that their conduct violates this specific law to be convicted.

Elements the Government Must Prove

To convict, federal prosecutors must prove four elements beyond a reasonable doubt. The Ninth Circuit — which governs federal prosecutions in California — sets these out in its model jury instructions. Each element is also a potential point of attack for the defense.

1. A Knowing and Willful Scheme

The defendant must have knowingly and willfully executed, or attempted to execute, a scheme or plan either to defraud a health care benefit program or to obtain its money or property by material false or fraudulent pretenses. The defense can challenge whether any “scheme” existed at all, or whether the conduct was simply a billing or administrative practice that the government has recast as fraud.

2. Intent to Defraud

This is the heart of most cases. The defendant must have acted with intent to defraud — not merely made a mistake. Because intent is rarely proven by direct evidence, the government often relies on circumstantial proof and, in some cases, a “deliberate ignorance” or willful blindness theory. The Ninth Circuit addressed the limits of that theory in United States v. Hong (2019). Demonstrating good faith, reliance on professional coders, or reasonable interpretation of ambiguous rules can defeat this element.

3. The Victim Was a Health Care Benefit Program

The target of the scheme must qualify as a health care benefit program under 18 USC 24(b). This element is usually straightforward where Medicare or a private insurer is involved, but it can still be tested where the payor or the program’s status is unclear.

4. Connection to Health Care Benefits, Items, or Services

The scheme must have been executed in connection with the delivery of, or payment for, health care benefits, items, or services. The defense can argue that the conduct, even if improper, was not sufficiently connected to a covered transaction.

Penalties Under 18 USC 1347

Health care fraud is a felony, and the penalties escalate sharply based on the harm caused. The statute also allows each execution of the scheme — for example, each fraudulent claim — to be charged as a separate count, so exposure can multiply quickly. The table below summarizes the structure.

Actual sentences are calculated under the U.S. Sentencing Guidelines, where the single biggest driver is usually the “loss amount” — the dollar figure the government attributes to the scheme. Disputing how that loss is calculated is often as important as fighting guilt itself, because it can dramatically change the recommended sentence. Restitution and forfeiture frequently accompany a conviction, and for licensed providers, exclusion from Medicare and Medicaid can end a career.

Related Federal Statutes

Health care fraud is rarely charged alone. Prosecutors routinely stack 18 USC 1347 with other statutes, each of which we cover in its own reference page:

• 18 USC 1349 (conspiracy and attempt) — allows the same penalties as the underlying fraud for those who agree to participate in a scheme.
• 42 USC 1320a-7b (Anti-Kickback Statute) — criminalizes paying or receiving anything of value for referrals tied to federal health programs.
• 31 USC 3729 (False Claims Act) — the civil counterpart that drives treble damages and per-claim penalties, often alongside criminal charges.
• 18 USC 1035 (false statements in health care matters) — targets false statements made in connection with health care benefits.
• 18 USC 1028A (aggravated identity theft) — adds a mandatory consecutive term where patient or provider identities are misused.

How 18 USC 1347 Charges Are Defended

Because intent is the central element, many defenses focus there. Showing that billing reflected honest error, that the provider reasonably relied on coders or billing companies, or that the services were medically necessary and properly documented can undercut the government’s theory. Other defenses challenge the reliability of the data analytics and statistical sampling the government uses to extrapolate “fraud” across thousands of claims, attack the credibility of cooperating witnesses, or seek to suppress evidence gathered through constitutional violations.

For a closer look at specific scenarios, see our discussions of how billing for services not rendered cases are built and defended, and what to expect during an OIG health care investigation. The right approach always depends on the specific facts and evidence.

Charged or Investigated Under 18 USC 1347? Contact Us

If you are facing a federal health care fraud charge or have learned you are under investigation, the sooner you involve experienced counsel, the more options you are likely to have. KN Law Firm, APLC defends these cases in the U.S. District Court for the Central District of California and before the Ninth Circuit. Call (888) 950-0011 for a free, confidential consultation with attorney Chris Nalchadjian.