Indicted on Healthcare Fraud Charges? 5 Things to Expect & 3 Potential Outcomes – JD Supra

The U.S. Department of Justice (DOJ) is cracking down on healthcare fraud, and many providers are finding themselves facing serious allegations. This includes criminal allegations in many cases. If these allegations lead to a conviction, not only can providers face Medicare and Medicaid exclusion, recoupments, fines, and other financial penalties, but they can face federal imprisonment as well.

When federal prosecutors at the DOJ believe they have sufficient evidence to pursue criminal charges, their next step is usually to seek an indictment before a federal grand jury. While an indictment can ultimately lead to trial and the risk of conviction, there are several intermediate stepsand there are several opportunities for healthcare providers to seek favorable pre-trial resolutions.

An indictment is not a conviction. There are many possible ways to defend against federal healthcare fraud charges following an indictmentincluding ways that can result in a favorable pre-trial outcome. Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

What Happens After a Federal Indictment in a Healthcare Fraud and Abuse Case

In the federal criminal justice system, the purpose of empaneling a grand jury is to determine whether prosecutors have sufficient evidence to pursue charges. The grand jury hears the prosecutions evidence and determines whether there is probable cause to believe that the defendant has committed an indictable crime. If the grand jury finds probable cause, the court will issue an indictment, and the case will be set on the path toward trial.

But, while some federal healthcare fraud cases go to trial, many are resolved during pre-trial proceedings. This can be achieved through either a plea bargain or a successful effort to have the charges dismissed. Following a healthcare fraud indictment, efforts to secure a plea bargain or dismissal should begin immediately. This requires defense counsel who are experienced in handling healthcare fraud cases at all phases of the federal criminal justice process. These phases are:

1. Arraignment

Following a federal indictment on healthcare fraud charges, the next formal step in the process is the arraignment, also referred to as the initial hearing. During an arraignment, the judge reads the charges against the defendant, asks the defendant to enter a plea, and determines whether the defendant will be released on bail or detained until trial.

As a defendant, entering the right plea (not guilty in virtually all cases) and successfully arguing for bail are essential at this stage. Your defense counsel can represent you in court during your arraignment; and, prior to your arraignment, you can (and should) work with your defense counsel to ensure that you know what to expect, what to say, and how your attorneys will argue for bail on your behalf.

2. Discovery

Criminal cases involve a discovery phase similar to civil litigation. However, prosecutors are limited in the information they can obtain, as criminal defendants cannot be forced to share any information that would result in a waiver of their Fifth Amendment privilege against self-incrimination. For defendants in healthcare fraud cases, making strategic use of the discovery phase can be essentialand it can often set the stage for subsequent plea deal negotiations or a motion to dismiss.

During discovery, federal prosecutors are required by law to disclose all evidence and other materials that they intend to use at trial. This includes exculpatory evidence (evidence which suggests that the defendant may be innocent). If prosecutors withhold or otherwise fail to disclose any material evidence, this can potentially support a motion to suppress, motion to dismiss, or motion for a new trial.

3. Preliminary Hearing

The preliminary hearing in a federal healthcare fraud case takes place while the parties are engaged in discovery. While it is often referred to as a mini trial, the rules for preliminary hearings are very different from those that apply to trials.

Prosecutors can introduce evidence that would not be admissible at trial, and the purpose of the preliminary hearing is to allow the presiding judge to determine whether the case should move forward.

A strategic and effective defense at the preliminary hearing phase can result in dismissal of the charges contained in the indictment. While prosecutors have a certain amount of leeway to present their case, defendants have significant opportunities at this stage as well. Even if a preliminary hearing does not result in a dismissal, it may still serve to expose flaws in the prosecutions case which suggest that a jury will not find the defendant guilty beyond a reasonable doubt.

4. Plea Bargaining

By exposing flaws in the prosecutions case, defendants can set the stage for successful plea bargain negotiations in many cases. Healthcare fraud cases tend to be exceedingly complex; and, when prosecutors do not have clear evidence of guilt, they will often be open to considering deal terms that are favorable to the defendant. Even if prosecutors believe they have a strong case, they may be willing to negotiate a deal in order to conserve the DOJs resources and pursue other cases.

When pursuing plea deal negotiations, there are several important factors that healthcare providers need to consider. There are also several different types of plea deal negotiation strategies. Here, too, making informed decisions and communicating effectively with prosecutors requires highly-experienced federal healthcare fraud defense counsel.

5. Pre-Trial Motions and Trial

Prior to trial, defendants in federal healthcare fraud cases have the ability to file various types of motions. These pre-trial motions can serve a variety of purposes, including: (i) establishing leverage in plea deal negotiations, (ii) limiting the scope of the issues or the evidence that will be presented at trial, and (iii) having charges dismissed prior to trial. When filing pre-trial motions, defendants must be able to establish specific and discrete grounds for the arguments they are putting forth, as filing frivolous motions is not only ineffective and wasteful, but can potentially have adverse consequences.

If a healthcare fraud case is not resolved through a plea deal or pre-trial motion to dismiss, then the case will go to trial. The prosecution will present its case first; and, after it does so, the defendant will have an opportunity to file a motion arguing that the prosecution has not met its burden of proof. If this motion fails, defense counsel will then present the defendants case in chief; and, at the end of the trial proceedings, the jury (or the judge, in the case of a bench trial) will render a verdict.

Prosecutors and defendants can and often do negotiate plea deals during trial; and, if a federal healthcare fraud case goes to verdict and sentencing, this is not necessarily the end of the process. There are various grounds for filing appeals and petitions for post-conviction relief, and cases can go on for months, if not years, following trial if the circumstances warrant.

Potential Outcomes Following a Federal Indictment for Healthcare Fraud

In terms of potential outcomes following a federal indictment for healthcare fraud, there are three primary possibilities. These are: (i) pre-trial dismissal, (ii) plea deal, and (iii) trial.

1. Pre-Trial Dismissal

Securing a pre-trial dismissal is generally the best-case scenario following a federal grand jury indictment on healthcare fraud charges. If your case is dismissed, it will be over, and you will be able to return to devoting your full time and attention to running your healthcare business or practice. Potential grounds for seeking pre-trial dismissal in a healthcare fraud case include:

As you can see, these grounds are not based on innocence. Generally speaking, questions of guilt are reserved for the factfinder at trial. However, if there are procedural issues that warrant a not guilty verdict regardless of the facts at hand, then it may be possible to secure a pre-trial dismissal.

2. Plea Deal

Negotiating a plea deal affords the opportunity to avoid the uncertainty of trial. Deciding whether to pursue (and to accept) a plea deal requires a clear understanding of the relevant facts and the relevant lawand this requires experienced federal healthcare fraud defense counsel.

Under appropriate circumstances, negotiating a plea deal can facilitate a favorable outcome to a criminal healthcare fraud case. With that said, prior to approaching prosecutors about a possible plea deal, it is imperative to ensure that this is the best option you have available. If you have grounds to seek a pre-trial dismissal, negotiating a plea could result in unnecessary adverse consequences.

3. Trial

While going to trial is often viewed as a means of last resort, providers facing federal healthcare fraud allegations should not accept unfavorable plea deals solely for the purpose of avoiding trial. Experienced defense counsel will be able to approach trial strategically, fight for a not guilty verdict, and set the stage for post-trial practice if necessary.

Regardless of the circumstances involved, facing allegations of healthcare fraud is an extremely serious matter that requires a strategic and targeted defense. Providers facing these allegations need to engage experienced defense counsel promptly, and they must work with their attorneys to achieve a favorable resolution by all means available.