Penalties for Medicare Fraud: What You Need to Know - Brown, LLC

Penalties for Medicare Fraud: What You Need to Know

March 28, 2023

Medicare fraud is a serious crime that can result in severe consequences. Not only does it hurt taxpayers, but it may put vulnerable patients at risk. If you are aware of Medicare fraud, it is essential to understand the penalties you may face, even if you’re just a silent participant. If you don’t speak up and say something, you might be the unwitting target of a criminal and civil investigation that threatens your economics and liberty.  When the FBI comes knocking, you need to know your options, and your options have already started if you’re aware of a fraud as certain statutes like the False Claims Act allow you to blow the whistle, potentially receive a whistleblower award and help the system balance out.

The Medicare program is designed to provide critical healthcare assistance to those who need it the most, and any abuse of this system can lead to significant financial and healthcare consequences. The penalties for Medicare fraud can vary depending on the severity of the offense. Generally, penalties can include fines, imprisonment, and exclusion from Medicare and other federal healthcare programs. These penalties apply to individuals and organizations found guilty and/or liable of Medicare fraud. Criminal penalties for Medicare fraud can include fines, imprisonment, and probation. Civil penalties for Medicare fraud can include fines, exclusion from the Medicare program, and repayment of any improperly received funds with triple damages.  

Medicare Fraud Penalties: What you need to know


One of the most common penalties for Medicare fraud is fines. Fines can range from thousands to millions of dollars, depending on the severity of the offense. For instance, an individual or organization found guilty of Medicare fraud can be fined up to $11,000 per violation or up to three times the amount Medicare was billed. Also, CMS may make the wrongdoer enter into a corporate integrity agreement (“CIA”) moving forward as a term and condition for continued participation in government payor programs.


In addition to fines, individuals involved in Medicare fraud can also face imprisonment. Depending on the severity of the offense, an individual can serve up to ten years in federal prison. Organizations can also technically face imprisonment with corporate officers who sanctioned the conduct having potential exposure. .

False Claims Act

The False Claims Act imposes a variety of penalties on professionals who are accused of submitting false medical claims, engaging in fraudulent medical billing, or producing false records. According to the CMS, these include prison sentences and monetary penalties of up to $11,000 per instance.

Offering or receiving kickbacks

According to the Anti-Kickback Statute, a kickback is anything of value that one party gives to another in exchange for business referrals or other actions that benefit the first party. If found guilty of offering or accepting kickbacks, medical professionals could be punished similarly to those found guilty of filing false claims. People who are found guilty under the Act may also be prohibited from participating in Medicare programs in the future, according to the Office of Inspector General’s website.

Exclusion from Medicare and other federal healthcare programs

Individuals and organizations found guilty of Medicare fraud can also be excluded from Medicare and other federal healthcare programs. The exclusion can be temporary or permanent, depending on the severity of the offense. Exclusion from these programs can be economically devastating for healthcare providers as they can no longer bill Medicare for services rendered.

Qui tam lawsuits and whistleblowers

Through their jobs, relationships with family and friends, or other connections, people occasionally learn about instances of health care fraud against the federal government. According to the Federal False Claims Act, a private party may file a lawsuit under seal jointly on behalf of themselves and the federal government in order to try to hold the defendant accountable for the health care fraud and in turn if the case is successful receive a portion of the government’s recovery as a whistleblower award.

Qui tam lawsuits are very complicated, both in terms of the conditions under which they can be brought and in terms of how they are handled, and there’s a prohibition from filing a qui tam under the False Claims Act pro se, meaning you need to use a whistleblower law firm to file the case.

There are deadlines known as statutes of limitations after which the suit may not be brought, plus technically, only the first to file has rights to recover a whistleblower reward  so anyone with information or questions about bringing a potential qui tam action should speak with a lawyer as soon as possible or your rights may be prejudiced.. A whistleblower lawyer can provide information and assist in determining whether a qui tam lawsuit potentially has any merit and go over with you the pros and cons of proceeding. 

Whistleblower Protections

Whistleblowers play a crucial role in uncovering Medicare fraud. The False Claims Act (FCA) provides incentives and protections for whistleblowers who report Medicare fraud. Whistleblowers who report fraud can receive a percentage of the recovery amount, which can be millions of dollars. Additionally, the FCA provides protection for whistleblowers against retaliation from their employers. Some common whistleblower protections include:

  • Anti-Retaliation Laws: These laws protect whistleblowers from retaliation by their employer, such as termination, demotion, or harassment, for reporting illegal or unethical activities.
  • Confidentiality: Whistleblowers under the FCA initially file the matter confidentially under seal, so their identity is not disclosed to their employer/defendant.  Eventually, though, the identity will be revealed under the FCA, so you should speak with your lawyer about the timing and plan your parachute.  Under other statutes like the SEC whistleblower statute or the AML whistleblower statute, you can potentially remain anonymous from start to finish.  
  • Financial Incentives: Some whistleblower programs provide financial incentives for individuals who report illegal or unethical activities, such as a percentage of any recovered funds or fines. In the last decade every year whistleblowers have received aggregate whistleblower awards in the hundreds of millions of dollars.
  • Whistleblower Protection Act: The Whistleblower Protection Act provides protections for federal employees who report illegal or unethical activities within the federal government. This includes protections against retaliation by their employer, as well as the ability to file a complaint with the Office of Special Counsel if they experience retaliation.

Whistleblowers play a crucial role in uncovering Medicare fraud, and the False Claims Act provides incentives and protections for whistleblowers. Some of the best whistleblower law firms focus their practice on representing whistleblowers in a variety of industries, such as healthcare, finance, and government. For example, the attorneys at Brown, LLC have a proven track record of successfully representing whistleblowers, with a firm led by a former FBI Special Agent. We understand the importance of whistleblowers in uncovering fraud and other illegal activities, and are dedicated to helping our clients navigate the complex legal process of filing a whistleblower claim.