When federal prosecutors bring a criminal healthcare fraud case, the defendant's first instinct is often to point to the billing company that submitted the claims. Whether that strategy works turns entirely on what the record shows the provider knew. The criminal healthcare fraud statute, 18 U.S.C. 1347, requires proof that someone knowingly and willfully executed a scheme to defraud a health care benefit program, not proof of who typed the claim. Health Law Alliance defends physicians and practice owners in exactly this situation: a billing company handled the claims, and the government still points to a certification the provider personally signed.
The Knowing-and-Willful Standard Under Federal Law
Section 1347(a) punishes whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice to defraud any health care benefit program, with fines and up to 10 years in prison. Subsection (b) adds that the government need not prove the defendant had actual knowledge of Section 1347 itself or a specific intent to violate that statute, only that the underlying scheme was carried out knowingly and willfully. The felony provision of the Anti-Kickback Statute uses the same two words: 42 U.S.C. 1320a-7b(b) reaches whoever knowingly and willfully pays or receives remuneration to induce referrals, a standard examined further in The Anti-Kickback Statute: Remuneration, Intent, and Safe Harbors. In both statutes, the government's case turns on what the defendant personally knew when the claim went out.
When Billing-Company Reliance Can Defeat Intent
A reliance defense is strongest when the facts show genuine delegation: the provider had no role in code selection, received no claim-level reports flagging irregularities, and had no basis grounded in actual experience to doubt the billing company's representations about its own compliance. Federal courts apply a willful blindness standard to close the gap between a vendor's conduct and a defendant's own knowledge. The Supreme Court in Global-Tech Appliances, Inc. v. SEB S.A. held that willful blindness requires the defendant to subjectively believe a fact is highly probable and to take deliberate steps to avoid confirming it. Passive trust in a vendor falls short of that standard. A provider who outsourced billing and had no reason to suspect wrongdoing sits in a different position than one who saw billing reports, ignored complaints from staff, or kept collecting payment after learning that specific claims were being questioned.
Why Personal Certifications Cut Against the Defense
The Medicare enrollment application closes much of that gap. The CMS-855I certification statement requires the individual practitioner, under penalty of perjury, to certify: “I will not knowingly present or cause to be presented a false or fraudulent claim for payment by Medicare and will not submit claims with deliberate ignorance or reckless disregard of their truth or falsity.” CMS's own instructions add that “the authority to sign the application on your behalf may not be delegated to any other person.” Once that certification is in the record, prosecutors argue the provider personally affirmed responsibility for what gets billed under their own number, regardless of who built the claim. In United States v. Barson, the Fifth Circuit upheld a deliberate-ignorance instruction where a clinic's medical director had signed blank Medicare enrollment forms and blank checks under his own provider number, then never reviewed the Medicare remittances or bank statements that followed; the court held that conduct let the jury infer he took pains to avoid learning what his number was being used to bill. A provider who kept signing claims, and kept collecting payment, after learning of billing problems invites the same inference, the same way backdating records after a problem surfaces invites scrutiny once an investigation opens.
A provider's own signature on the Medicare enrollment certification, personally affirming that false claims will not be submitted, undercuts an argument that someone else created them.
Why Early Legal Counsel Is Critical
It is critical that physicians and practice owners promptly retain experienced healthcare defense counsel upon receiving a grand jury subpoena, a target letter, an audit notice, or any other government inquiry touching billing practices. Early legal intervention can protect the provider's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to unnecessary risk, including program exclusion.
How Health Law Alliance Can Help
Health Law Alliance defends physicians, practice owners, and healthcare companies in criminal healthcare fraud investigations and prosecutions nationwide. Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience. If your practice relied on a billing company and you have been contacted by federal agents, served with a subpoena, or charged under the healthcare fraud statute, contact our criminal healthcare fraud defense team for a free, confidential consultation before you respond.
