A federal healthcare fraud indictment can name more than one defendant. Prosecutors build out from the person who signed the claim form to the billing manager who ran the numbers, the practice administrator who negotiated referral arrangements, and the physician who ordered the service. Two federal statutes carry that reach: 18 U.S.C. 1349 and 18 U.S.C. 371. Neither one requires the government to prove that a single false claim was ever paid.
The Two Statutes Behind a Conspiracy Charge
Section 1349 sits inside Title 18, Chapter 63, the same chapter that defines health care fraud under Section 1347. It makes attempting or conspiring to commit any Chapter 63 offense punishable by the same penalty that applies to the completed offense, and its text does not require proof that any conspirator took an overt act toward the fraud. Health care fraud under Section 1347 itself carries up to 10 years, up to 20 years if the offense causes serious bodily injury, and up to life if it causes death. Section 371, the general federal conspiracy statute, reaches an agreement to commit any federal offense or to defraud the United States, carries up to five years, and requires that at least one conspirator did some act to effect the object of the agreement. Conspiracies built on an anti-kickback statute or stark law violation typically run through Section 371 rather than Section 1349, because both of those statutes sit outside Title 18, Chapter 63.
A conspiracy charge under 18 U.S.C. 1349 carries the same prison exposure as the completed health care fraud offense it targets, without the government ever having to prove that offense was completed.
Why Employees Face the Same Exposure as Owners
Conspiracy liability does not track title or ownership. A biller who adjusts codes to match a supervisor's instructions, an office manager who books visits to match a quota, or a marketer who signs patients up for services a practice never intends to render can each be charged as a conspirator alongside the physician who owns the practice. The government's burden is an agreement and a shared intent to further an unlawful purpose, not a signature on the claim form or a cut of the proceeds. Prosecutors increasingly identify likely conspirators from aggregate billing patterns before a single subpoena goes out, a pattern described in Data Analytics in Federal Healthcare Fraud Cases. An employee who raises an internal objection and then keeps performing the same tasks remains inside the conspiracy. Stopping the conduct is not automatically enough either: the Supreme Court has held that mere inaction does not establish withdrawal, and that an affirmative act against the conspiracy's purpose, communicated to the other participants or disclosed to law enforcement, generally is required. That distinction, often documented only in emails, texts, and internal complaints, is frequently where a conspiracy case against a lower-level employee is won or lost.
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience.
How Co-Conspirator Statements Reach a Defendant Who Said Nothing
Once a conspiracy is established, a statement made by one conspirator during and in furtherance of it can be used against every other member, including a defendant who never spoke the words. Federal Rule of Evidence 801(d)(2)(E) excludes these statements from the definition of hearsay, so they can be admitted without the declarant appearing as a witness. A text message from a billing manager describing how to code a service, or an email from a marketer explaining a referral arrangement, can become evidence against a physician who never sent either one, once the government establishes the conspiracy and that the statement furthered it. Proving the conspiracy itself still requires independent evidence connecting the defendant to the agreement; the coconspirator statement's content alone is not enough. Once an indictment or target letter names a suspected conspirator, deciding whether to cooperate, negotiate, or contest the charge becomes its own decision, addressed in Deciding Whether to Plead in a Healthcare Fraud Case.
Why Early Legal Counsel Is Critical
It is critical that physicians and healthcare employees promptly retain experienced healthcare defense counsel upon receiving a grand jury subpoena, a civil investigative demand, a target letter, or any other government inquiry. Early legal intervention can protect a client's rights, shape how government requests get answered, help avoid admissions that later support a conspiracy theory, and preserve defenses that a delayed response can waste. Delaying representation until after an interview or a proffer session can significantly narrow the options counsel has left to work with.
How Health Law Alliance Can Help
Health Law Alliance's healthcare fraud defense attorneys represent physicians, practice employees, and healthcare companies at every stage of a federal conspiracy investigation, from the first subpoena through trial. If you or your practice has been contacted about a healthcare fraud investigation, contact Health Law Alliance's healthcare fraud defense attorneys for a free, confidential consultation.
