Medical Fraud in Texas: Taking Advantage of the Health Care System

The Truth About Medical Fraud in Texas

Millions of Texans rely on healthcare programs, such as Medicare and Medicaid, to help pay for their medical expenses. These useful programs can help to cover the costs of doctor visits, operations and prescriptions for people with low or limited incomes. Because these programs receive state and federal funding, the Texas government is very careful about how Medicaid payments are disbursed.

Some people try to take advantage of the Medicaid system by using false information or false pretenses to receive payments, services or items for personal gain. Under Texas state law, this is a very serious offense than can land you in jail.

Read on to learn the truth about Medicaid fraud in the Lone Star State.


What Is Medical Fraud?

Fraud is defined as criminal or wrongful deception for the purpose of receiving some kind of personal gain. This is certainly true when it comes to Medicaid fraud. Taking advantage of the Medicaid system is considered medical fraud.

There are many types of medical fraud. According to Sec. 35A.02 of the Texas Penal Code, a person could be charged with Medicaid fraud if they commit one or more of the following actions:

  • Knowingly making a false statement in order to receive benefits or payments which are not authorized or which are greater than the authorized amount
  • Knowingly concealing or failing to reveal information in order to receive payments which are not authorized
  • Knowingly applying for Medicaid benefits in another person’s name or using another person’s benefits for unauthorized purposes
  • Using false statements or deceit in order to help a medical facility receive unauthorized benefits or payments
  • Making payments or gifts to Medicaid providers to receive undue benefits
  • Making a Medicaid claim for an unauthorized provider, service or product

Committing any one of these actions may be grounds for arrest and prosecution in a Texas court. Texas is very invested in seeking out and stopping Medicaid fraud.

How Medical Fraud Is Caught

Because the Medicaid program is so massive, the Texas government dedicates a lot of resources to catching fraudsters.

The Texas State Auditor regularly conducts audits of Medicaid providers, physicians, nurses and care facilities to make sure that everything is in order. If an audit turns up something suspicious, the State Auditor may authorize a full investigation of the physician, provider or care facility.

This investigation could include a thorough search of documents, patient files and accounting records, as well as interviews.

If evidence of fraud is uncovered, legal charges may be filed.

How Texas Prosecutes Fraud

When it comes to medical fraud, the penalties are assessed in direct relation to the amount of the fraud. This means that the more money or benefits that have been misappropriated, the greater the potential penalties.

For example, a case of fraud that involves a small amount of misappropriated payments, less than $100, can be charged as a Class C misdemeanor. The potential penalty for this crime includes:

  • A fine of up to $500

Larger amounts of fraud lead to larger penalties. A person who is found guilty of misappropriating more than $150,000 but less than $300,000 of Medicaid benefits may be convicted on a second degree felony charge. This is punishable by:

  • Two to 20 years in Texas prison
  • Up to a $10,000 fine

In some cases, medical care providers who are convicted of Medicaid fraud may have their licenses to practice care revoked or they may be banned from using Medicaid services in the future.

Legal Examples

There are so many ways that people try to commit Medicaid fraud that it can helpful to consider a few common scenarios.

For example, Dr. Wright is a general care practitioner with a private practice. He sees many patients who bill Medicaid for their check-ups and medical procedures. Once every few weeks, Dr. Wright orders a special diagnostic test for one of his patients. His patient never learns about the test and the test is never performed. Instead, Dr. Wright receives compensation from Medicaid for performing the procedure and pockets the cash.

If Dr. Wright accumulates enough fraudulent payments in this way, he could be charged with a felony crime and lose his license.

In another example, Wendy is a caretaker for her sick mother. Her mother receives checks from Medicaid to cover her medical expenses. Wendy uses this money for authorized medical purposes most of the the time, but she occasionally keeps some money for herself. If she spends even one dollar of this money on unauthorized items, she could be charged and convicted of Medicaid fraud.

Although she might only misappropriate a few dollars here and there, she could be in trouble if an audit shows that money was spent on unauthorized items. For small amounts of money, Wendy could be charged with a Class C or Class B misdemeanor.

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