How Federal Prosecutors Build Medicare Fraud Cases

Claims data comes first in a federal Medicare fraud case. The target comes second, after an algorithm flags a billing outlier, an audit lands, and a civil file turns criminal without anyone announcing the change. Chapman, Dowling & Mallek starts where the government started, with the numbers that put a practice on a list, and our Medicare fraud defense work runs from Detroit to federal courts across the country.

CMS Data Analytics and the Move Away From Tipsters

The Centers for Medicare & Medicaid Services (CMS) runs automated screens across every claim before a human reads a chart. CMS data analytics fraud detection compares your Current Procedural Terminology (CPT) code mix against peers in the same field and region.

The ratios that pull a practice out of the pack are narrow:

Level 4 and 5 visit codes billed above the peer average
Service units per day beyond what a working schedule allows
Modifier 25 on a large share of visits with a procedure
One diagnosis code repeating across nearly every chart

Outlier status alone proves nothing about state of mind. Code mixes differ between a rural pain practice and an urban primary care panel for reasons unrelated to fraud.

How Do Federal Prosecutors Prove Medicare Fraud?

Volume is the easy part of the government’s case, since claims data plots itself. Proving a physician knew the billing was wrong takes different material, so prosecutors go looking for emails about revenue targets, coding instructions given to staff, audit findings nobody acted on, and compensation that rises with referrals.

What Happens During the Covert Stage?

Long before an indictment, the government gathers records without convening a grand jury. Under 18 U.S.C. § 3486, the Attorney General or a designee may issue an administrative subpoena in a federal health care investigation, so your billing company, bank, and software vendor may have handed over years of data already. Physicians who bring in our federal healthcare fraud defense attorneys while the matter is still administrative gain months of preparation.

Forensic Coding Audits That Answer Peer Comparison Charts

The government’s peer comparison chart presents one interpretation of the data, which the defense can challenge using the same metrics. An independent coding audit recalculates the figures after accounting for differences in the patient population:

Re-code a random sample from the documentation, not the claim summary
Match acuity by comorbidity burden instead of practice type alone
Identify referral sources that push a panel toward sicker patients
Test the extrapolation formula for sample size and confidence interval

A correctly matched peer group can move a physician from the top 1% of billers into the middle of the range, which makes the government’s comparison group the most productive early challenge. Detroit matters run through the U.S. District Court for the Eastern District of Michigan, often with Department of Justice (DOJ) Fraud Section attorneys involved.

Match the Government’s Data Team With Your Own

Chapman, Dowling & Mallek is led by a former federal prosecutor and U.S. Marine Corps Judge Advocate, supported by former federal investigators who once built these charts inside the agencies. We use that firsthand insight to identify weaknesses in the government’s data and challenge its conclusions.

Call or text (346) 242-7626 at any hour, or contact us online today for a free consultation. While prior results do not guarantee a similar outcome, our firm has secured 188 acquittals.