Criminal Defence in Cases of Healthcare Billing Fraud
Whether through a summons as a suspect, a search warrant for your practice or an enquiry from the Association of Statutory Health Insurance Physicians – allegations of healthcare billing fraud usually confront healthcare providers suddenly and with considerable impact.
Under criminal law, such allegations are generally pursued as fraud under section 263 StGB (German Criminal Code (in German: “Strafgesetzbuch”) – StGB). This offence entails elements that are complex and require careful examination – deception, error and financial loss. For healthcare professionals it is crucial to understand that billing errors alone do not constitute a criminal offence. Whether criminal liability arises depends on whether the billing complied with the applicable rules and whether intentional misconduct can be proven.
Both of these aspects regularly present evidentiary challenges. A comprehensive and strategic criminal defence is therefore key to handling billing fraud accusation.
When does billing fraud occur in the healthcare sector?
“Billing fraud” is not a separate offence in the Criminal Code, but terminology coined by practitioners to describe a type of fraud. Prosecutions are typically based on the general offence of fraud under section 263 StGB.
To put it simply, this offence involves:
- a deception about facts (expressly or implied),
- an error on the part of the person being deceived resulting from the deception,
- which must result in a disposition of assets,
- that, in turn, results in a financial loss.
The offender must have intent encompassing all of these elements, and act with the intention to obtain an unlawful financial advantage for oneself or a third party.
In the healthcare context, it is particularly important to note, that even the submission of an invoice can constitute (implicit) deception. By submitting an invoice, a service provider is implicitly declaring that the billing requirements have been fulfilled – even if this is not expressly confirmed.
The extent of the damage is determined according to the principles of social security law: the key question is whether a legal entitlement to payment followed from the applicable social law provisions. If not – for instance because a service was not properly provided or was not billable – the amount paid out is considered a financial loss.
The relevant billing frameworks include, in particular, the Uniform Assessment Standard (EBM), the Fee Schedule for Physicians (GOÄ), the Fee Schedule for Dentists (GOZ) and, in the inpatient department, the DRG system. Errors or interpretative questions in these rules frequently form the basis for criminal allegations.
Typical Case Scenarios of Healthcare Billing Fraud
The suspicion of billing fraud can be directed, in particular, at doctors, dentists, psychotherapists, hospital staff, pharmacies, medical supply stores, physiotherapy and other therapy practices, as well as nursing and care services.
Typical scenarios include:
- Services are not provided,
- Services are provided incorrectly – e.g. billing for more than what was provided (so-called “upcoding”),
- Violations of the obligation of physicians to provide services personally,
- Status issues – e.g., when a doctor bills for services as a self-employed contracted physician, even though he is only an employee,
- Incorrectly assessed or non-billable services,
- Care services provided without the required qualifications,
- Violations of prohibitions on cooperation (e.g., section 128 SGB V)
How is Billing Fraud detected? – Procedure and Typical Measures
Investigations are rarely initiated by chance. Common triggers are:
- Internal tips or reports from current or former employees,
- Examinations by the Medical Service (Medizinischer Dienst – MD) of the statutory health insurance funds
- Notifications from the Association of Statutory Health Insurance Physicians (Kassenärztliche Vereinigung) or individual health insurers
The investigation is led by the public prosecutor’s office. Typical measures include searches of business premises and private homes, seizure of servers, data carriers and patient records, interviews with staff and obtaining expert opinions. In addition, assets can be secured at an early stage of the proceedings through seizure and attachment.
What are the penalties for billing fraud in the healthcare sector?
The statutory penalty for fraud (section 263 StGB) ranges from a fine to five years’ imprisonment. In particularly serious cases the penalty is imprisonment from six months to ten years, for example in cases of acting on a commercial basis, considerable financial loss (typically from EUR 50,000 per victim) or offences committed as a member of a gang. If both commercial and gang-related conduct coincide, an even stricter penalty range under section 263 (5) StGB of one to ten years’ imprisonment applies.
Besides a fine or a prison penalty, significant additional consequences may arise:
- confiscation of assets pursuant to sections 73 et seq. StGB – often secured already in the investigation phase through seizure
- disqualification from exercising the profession pursuant to section 70 StGB,
- Professional disciplinary measures, up to and including revocation of the licence to practise,
- Reimbursement claims by health insurers and other cost bearers.
Criminal Defence by Galen Lawyers
Our team at Galen Lawyers advise and defend clients across Germany in economic and medical criminal law. We have extensive forensic experience in complex proceedings and represent both individuals and companies.
An effective defence begins at an early stage and combines a thorough substantive legal review with systematic evidence-based case work.
In a first step, we safeguard your procedural position. You should not make any statements on the matter without legal advice and without prior inspection of the file. A hasty statement can create disadvantages that are difficult to correct later. After examining the case file, we review the allegations against the requirements of section 263 StGB: What specific act of deception is alleged? Which billing provision is said to have been violated? Who is alleged to have been misled – and when? How is the damage calculated, and can this calculation be challenged? What evidence is put forward to support the allegation of intentional conduct?
At the same time, we continuously monitor all aspects relating to economic dimensions as well as those of administrative professional law. Where reimbursement claims or professional disciplinary measures are imminent, a coordinated defence strategy is indispensable.
In this regard, early intervention is key. Central decisions are often made during the investigation phase – for example regarding searches, asset seizures or the possibility of a pragmatic resolution of the proceedings.
Please feel free to contact us to arrange an appointment. We offer personal and individual consultation.
FAQs on healthcare billing fraud
No. “Billing fraud” is merely a term used by practitioners. Under criminal law, the allegation is regularly prosecuted as fraud pursuant to section 263 StGB.
Typical scenarios include allegations of services not rendered or incorrectly rendered (phantom services, upcoding), violations of the obligation to provide services personally, status issues, incorrectly coded or non-billable services and violations of prohibitions on cooperation. The possible scenarios are diverse.
As a suspect, you are generally not obliged to attend a police interview. Under no circumstances should you make a statement without prior legal advice.
Searches typically take place early in the morning and without prior notice. Their aim is to secure billing documents, patient records and digital data. Do not make any statements on the matter and contact a criminal defence lawyer immediately.
The penalty under section 263 StGB ranges from a fine to five years’ imprisonment, and up to ten years in particularly serious cases. In addition, there may be confiscation of assets, a ban from the profession (section 70 StGB), revocation of professional licenses and reimbursement claims by cost bearers.
The level of damage significantly impacts the applicable penalty range and sentencing. According to case law, a substantial financial loss – and thus a particularly serious case – is assumed where damage exceeds EUR 50,000 per injured party. However, damage calculations can often be challenged; both the method of calculation and the underlying assumptions should always be scrutinised.
The answer to this question depends on the individual circumstances of a case. In many proceedings, the focus is on intent: without proof of intentional conduct, criminal liability for fraud cannot be established. However, the question of damage can also be central, for example in determining whether the penalty range for particularly serious cases applies.
No. Professional consequences are possible but do not follow automatically from criminal proceedings. Whether, and which, measures are imposed depends on the professional group, the specific allegation and the outcome of the proceedings. A criminal professional ban (section 70 StGB) and administrative revocation of professional authorisation can also occur cumulatively.
The basic offence is subject to a five-year limitation period. In particularly serious cases (section 263 (3) StGB), the limitation period is ten years. Whether limitation has started, been interrupted or whether multiple offences are involved must be examined carefully in each individual case.
As soon as you become aware of criminal investigations – for example through a summons, hearing letter, notice of investigation or search – you should seek legal assistance. Do not make any statements on the matter before the file has been inspected. The earlier a criminal defence lawyer is involved, the greater the opportunities to influence the course of the proceedings and limit professional and financial damage.