Healthcare Fraud Defense & Anti-Kickback Statute Defense

Federal healthcare fraud investigations often run for months or years before charges are filed. These investigations are frequently covert. The government does not always announce that you are a target. But there are warning signs, and recognizing them early is critical.

Common indicators include receipt of a grand jury subpoena for records, a Civil Investigative Demand from the DOJ Civil Division, or a request for documents from HHS-OIG or a UPIC auditor. Federal agents—such as FBI or HHS-OIG—may contact a provider’s employees, former employees, or business associates for interviews. CMS may also impose prepayment review or revoke billing privileges as a precursor to a law-enforcement investigation.

Less obvious signs also matter. A former employee may have filed a qui tam whistleblower complaint under seal. Those cases are investigated in secret. A provider will not know about a sealed qui tam complaint until the government intervenes or the seal is lifted. A sudden departure by a key employee, unusual questions from a billing contractor, or an unexplained audit request can all suggest that a whistleblower has come forward.

If any of these indicators are present, retain experienced federal criminal defense counsel immediately. Scott Armstrong and Drew Bradylyons served as senior prosecutors in DOJ’s Fraud Section, have tried federal healthcare cases in courts around the country, and understand how federal investigators build healthcare fraud cases from the ground up.

The federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) prohibits the knowing and willful offer, payment, solicitation, or receipt of anything of value to induce or reward referrals for services covered by federal healthcare programs, including Medicare, Medicaid, and TRICARE.

The government must establish that the defendant offered, paid, solicited, or received remuneration; that the remuneration was intended to induce or reward referrals for services covered by a federal healthcare program; and that the defendant acted knowingly and willfully. Under the ACA amendment, the government does not need to prove actual knowledge of the statute or specific intent to violate it—it is sufficient that the defendant acted with knowledge that the conduct was wrongful.

The “one purpose” test further lowers the government’s burden. If even one purpose of the payment was to induce referrals, the statute is violated, even if there were other legitimate purposes.

Federal prosecutors prove intent through circumstantial evidence: the structure and timing of compensation arrangements, whether payments correlate with referral volume, whether the arrangement was reduced to writing, and whether the parties sought legal advice or conducted fair market value analyses. The absence of a written agreement, the use of cash payments, and compensation that exceeds fair market value are all factors prosecutors use to establish intent.

The AKS’s scope is broad. Consulting agreements, medical directorships, and joint ventures can all trigger an investigation. The OIG Safe Harbor Regulations define limited exceptions, but the safe harbors are narrow, technically demanding, and require factual support for protection. Violations carry criminal penalties of up to 10 years’ imprisonment per violation, civil monetary penalties, and exclusion from federal healthcare programs.

Scott Armstrong and Drew Bradylyons defend executives and medical professionals nationwide in investigations and charged cases involving the Anti-Kickback Statute.

The penalties are severe. Under 18 U.S.C. § 1347, healthcare fraud carries up to 10 years of imprisonment per count. If the fraud results in serious bodily injury, the maximum increases to 20 years. If it results in death, a life sentence is possible.

Beyond incarceration, defendants face substantial fines, restitution orders, and forfeiture of assets. Federal law mandates exclusion from Medicare, Medicaid, and other federal healthcare programs upon conviction.

For licensed professionals, the consequences extend further. Physicians, nurses, and pharmacists face loss of professional licenses. A conviction can end a medical career permanently. These stakes demand a federal healthcare fraud attorney with trial experience.

Medicare fraud investigations are coordinated across multiple federal agencies. DOJ’s Fraud Section and local United States Attorney’s Offices lead prosecutions. The HHS Office of Inspector General (HHS-OIG), the FBI, and specialized Medicare Fraud Strike Force teams conduct the underlying investigations.

These investigations often begin with data analytics. The government uses sophisticated claims-data analysis to identify billing outliers and anomalies. From there, investigators conduct patient and employee interviews, issue grand jury subpoenas or CIDs for medical records and billing data, execute search warrants, and recruit cooperating witnesses.

A defense attorney who understands how prosecutors build these cases can challenge the government’s data analysis and witness testimony. That knowledge is the foundation of an effective defense. Scott Armstrong and Drew Bradylyons defend medical professionals in this space based on years of federal trial and investigative experience at the Healthcare Fraud Unit involving over $2.8 billion in alleged false claims to federal healthcare programs.

Yes. A healthcare fraud investigation puts your medical license at risk before a conviction.

State medical boards may initiate independent proceedings based on the underlying conduct. Federal program exclusion by the OIG can prevent a provider from billing federal programs, effectively preventing a provider from practicing medicine.

Physicians charged with healthcare fraud face criminal penalties, loss of federal billing privileges, and state licensing board disciplinary action. These proceedings often run simultaneously with a criminal case.

A defense attorney experienced in defending licensed medical professionals understands how to navigate these parallel proceedings. The goal is to protect both a provider’s liberty and livelihood. Scott Armstrong and Drew Bradylyons defend medical professionals with an ever-present eye towards any potential parallel criminal investigation.

The firm defends individuals across the full spectrum of federal healthcare fraud cases and investigations, including wound care fraud, home health services fraud, durable medical equipment (DME) fraud, Medicare Part B and Medicare Advantage fraud, laboratory and genetic testing fraud, telemedicine and telehealth fraud, compounding pharmacy fraud, behavioral health and substance abuse treatment fraud, sober home fraud, injection and infusion therapy fraud, and controlled substances diversion and illegal prescribing.

The firm’s healthcare fraud defense practice is built on nearly a decade of combined DOJ experience at the nation’s preeminent healthcare enforcement unit: the Healthcare Fraud Unit of DOJ’s Fraud Section. Scott Armstrong, Drew Bradylyons, and Andrea Savdie tried 17 federal jury trials in healthcare fraud cases at DOJ’s Fraud Section involving over $2.8 billion in alleged false and fraudulent claims.

Civil healthcare fraud investigations focus on recovering money. These may involve False Claims Act (FCA) actions, Civil Investigative Demands, and penalties including treble damages and per-claim fines.

Criminal healthcare fraud investigations focus on proving intentional and willful fraud beyond a reasonable doubt. Criminal cases carry the possibility of imprisonment, criminal fines, and restitution.

The government frequently runs civil and criminal investigations in parallel. The same conduct can expose a provider to both civil liability and criminal prosecution at the same time. This is one of the most perilous dynamics in healthcare fraud enforcement.

Experienced defense counsel ensures that a provider does not make statements or concessions in a civil matter that can be used to trigger or build a criminal case. Scott Armstrong and Drew Bradylyons have years of experience navigating parallel civil and criminal healthcare fraud cases, both at DOJ’s Fraud Section and as defense attorneys.

Yes. Federal prosecutors regularly pursue healthcare executives and business owners for fraud within their organizations. The executive does not need to have personally submitted false claims. If a provider causes another to submit a claim with knowledge that the claim is false or fraudulent, a criminal case against that provider may be viable.

The government relies on theories of conspiracy (18 U.S.C. § 371) and aiding and abetting (18 U.S.C. § 2) to investigate healthcare executives and other medical professionals beyond those who submit the underlying allegedly false claims. Prosecutors examine whether the executive had knowledge of, directed, or willfully ignored the allegedly fraudulent conduct.

If you are a healthcare executive under investigation, you need a defense attorney who understands how the government builds cases against corporate healthcare executives. Scott Armstrong and Drew Bradylyons built these cases for years at DOJ’s Fraud Section and now use that experience to challenge the government’s approach.

The available defenses depend on the specific allegations. Common defenses in a complex healthcare fraud or anti-kickback violation case include the following:

Lack of intent to defraud. The government must prove willful and knowing fraud. This is an extremely high burden under the law. Billing errors and negligence are not crimes.

Medical necessity. Defendants can challenge the government’s claim that billed services were not medically necessary. Clinical documentation, expert testimony, and applicable CMS coverage determinations support this defense.

Good faith reliance. Reliance on the advice of counsel or compliance programs can negate the element of intent.

Challenging data analysis. The government relies heavily on statistical methodologies. At trial, the government converts investigative data into summary exhibits that can be challenged on underlying assumptions, inputs, and conclusions.

Disputing referral relationships. In anti-kickback statute cases, experienced defense counsel attacks the government’s proof of remuneration for referrals to sever the causal link.

Contesting witness testimony. Patient and cooperator testimony is frequently unreliable and subject to effective cross-examination.

Scott Armstrong and Drew Bradylyons leverage their significant federal trial experience as former prosecutors to anticipate the government’s trial strategy and develop an aggressive, evidence-based defense.

Telemedicine fraud is a major DOJ enforcement priority. The rapid expansion of telehealth services created new opportunities for fraud, and the government has responded aggressively. The 2024 National Health Care Fraud Enforcement Action featured telemedicine fraud prominently.

The government investigates telehealth fraud by analyzing billing patterns for providers who bill high volumes of telehealth services with minimal or no patient interaction. Investigators target “sham” telemedicine consultations used to generate orders for durable medical equipment, genetic testing, or prescriptions. They also scrutinize referral relationships between telehealth companies and ordering providers.

A defense attorney experienced in telemedicine fraud can challenge the government’s characterization of legitimate telehealth practices as fraudulent. This is particularly important where evolving CMS regulations created genuine ambiguity about permissible billing during the rapid expansion of telehealth.

Federal healthcare fraud investigations are multi-agency operations that can take years to complete. DOJ’s Fraud Section Healthcare Fraud Unit leads prosecutions at the national level, working alongside U.S. Attorney’s Offices, the FBI, HHS-OIG, IRS Criminal Investigation, and CMS Program Integrity.

Investigations typically begin in one of three ways: CMS data analytics or the Health Care Fraud Data Fusion Center flags a provider as a billing outlier; a current or former employee files a qui tam whistleblower complaint under the False Claims Act; or a patient, family member, or referral source reports information to the government.

Once an investigation is open, federal agents build the case through grand jury subpoenas for billing records and clinical documentation, search warrants, patient and employee interviews, financial analysis of bank records and compensation arrangements, and electronic evidence including emails, text messages, and EHR metadata.

For Anti-Kickback Statute cases, investigators trace the flow of money between referral sources and providers, compare compensation to fair market value benchmarks, and examine whether arrangements were reduced to writing. The government also recruits cooperating witnesses who provide testimony, wear recording devices, and help prosecutors reconstruct the scheme from the inside.

Scott Armstrong and Drew Bradylyons built these cases as senior prosecutors in DOJ’s Fraud Section using every one of these tools. They now use that experience to identify the government’s investigative strategy early and mount an effective defense before charges are filed.

Yes. Armstrong & Bradylyons PLLC defends individuals in federal healthcare fraud investigations and prosecutions nationwide. The firm can practice in every federal district court in the country.

DOJ’s Health Care Fraud Strike Force operates in the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Central District of California, the Middle District of Florida, the Eastern District of New York, the Northern District of Illinois, the Northern District of Texas, the Southern District of Louisiana, the District of New Jersey, and the District of Massachusetts. Healthcare fraud prosecutions also originate from U.S. Attorney’s Offices in districts beyond the Strike Force footprint.

Scott Armstrong and Drew Bradylyons have tried healthcare fraud cases and handled investigations in Strike Force districts and federal courts across the country. The firm is based in Washington, D.C. and represents clients in every jurisdiction where DOJ and its Strike Force bring healthcare fraud and Anti-Kickback Statute cases.