A federal healthcare fraud sentence turns less on the count of conviction than on a single number: the loss amount calculated under U.S. Sentencing Guidelines Section 2B1.1. That figure drives the base offense level up the loss table in increments that can add years to a sentence, and in cases prosecuted under the healthcare fraud statute, 18 U.S.C. Section 1347, the number in dispute is frequently the total dollar amount billed to a government program rather than the amount the program actually paid. For a physician facing sentencing, the difference between actual loss and intended loss is often the difference between one offense level and four.
The Greater Of Actual Or Intended Loss
Section 2B1.1 sets the general rule that loss for sentencing purposes is the greater of actual loss or intended loss. Actual loss is the reasonably foreseeable pecuniary harm that resulted from the offense. Intended loss is the pecuniary harm the defendant purposely sought to inflict, and it can exceed actual loss because it includes harm that would have been impossible or unlikely to occur, such as a fraudulent claim submitted for an amount the payer was never going to pay in full. Until recently this rule lived only in commentary, which let the Third Circuit hold in United States v. Banks that loss meant actual loss only, since the guideline text itself did not define the term. The U.S. Sentencing Commission closed that gap through Amendment 827, effective November 1, 2024, moving the actual-or-intended-loss rule into the guideline text itself, at the notes to the loss table in Section 2B1.1(b)(1).
The Healthcare-Specific Enhancement
Section 2B1.1(b)(7) adds a specific offense characteristic limited to a federal health care offense involving a government health care program. Where the loss to the program exceeds $1,000,000, the offense level increases by 2. Above $7,000,000, by 3. Above $20,000,000, by 4. These thresholds sit on top of the base loss table, so a physician's exposure in a Medicare or Medicaid fraud case can move sharply depending on which loss figure the court adopts.
Billed Amount As Prima Facie Evidence
For a federal health care offense involving a government health care program, guideline commentary provides a special rule: the aggregate dollar amount of fraudulent bills submitted to the program constitutes prima facie evidence of intended loss. That rule shifts the practical burden onto the defense once the government proves the billed total, but it remains rebuttable. In United States v. Mirando, the Ninth Circuit vacated a sentence built on an $8.4 million billed-amount figure because the government had not shown the defendant intended to receive that full sum, when his own record indicated he understood reimbursement would run substantially lower. The court distinguished what a provider bills from what a provider intends to collect.
The amount billed to a government health care program is only a starting point for intended loss, not the final figure, and a defendant who can show the billed total overstates what was actually expected to be collected can materially reduce the offense level.
Where This Fight Changes The Outcome
The dispute matters most where billing volume is high relative to what a payer would ever have reimbursed: claims at rates the program routinely reduces, codes with capped allowables, or claims caught before payment through prepayment review. There the billed figure can dwarf what the program ever paid, and the gap can span multiple tiers of the Section 2B1.1(b)(7) enhancement. Separately, the Supreme Court's 2025 decision in Kousisis v. United States resolved a circuit split over whether a scheme to defraud requires intent to cause net economic loss to sustain a conviction under the federal fraud statutes. That question concerns criminal liability, not the Section 2B1.1 loss calculation applied at sentencing.
Why Early Legal Counsel Is Critical
It is critical that physicians promptly retain experienced healthcare defense counsel upon receiving a grand jury subpoena, audit notice, investigative request, or other government inquiry. Early legal intervention can protect the physician's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses including the actual-versus-intended loss distinction described above, and allow counsel to communicate with investigators on the physician's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the physician to unnecessary risk.
How Health Law Alliance Can Help
Health Law Alliance represents physicians and other providers at every stage of a federal healthcare fraud matter, from the first civil investigative demand through sentencing, including the loss calculation disputes that most directly affect the guideline range. If you are facing a government inquiry or a sentencing proceeding involving a claimed loss amount, contact us for a free, confidential consultation.
