What is Insurance Fraud under California Penal Code section 550?

      Penal Code section 550 is one of the most powerful tools used to criminally target medical clinics, physicians and physician practices in California.  Criminal cases are usually instigated by insurance company fraud investigators operating out of the SIEU unit of the insurance company.

To prove guilt under this healthcare fraud law, the prosecution must show the defendant knowingly committed one or more of the following acts either directly or by aiding in their commission.  Remember, only one of these acts needs to be proven, not all of them.

A:  Presented or caused a false or fraudulent claim for payment for a loss or injury.

B:  Falsely claimed payment for a loss due to theft, destruction, damage, or conversion of a motor vehicle, part, or contents.

C:  Prepared, made, signed, or subscribed a document to support a false or fraudulent claim.

D:  Made or caused a false or fraudulent claim for health-care benefits.

E: Presented a claim for healthcare benefits not used by the named person.

F:  Claimed payment for healthcare undercharges for a person without reconciling known overcharges for the same person.

The law requires proof of Knowledge.  The prosecutor must prove that the  defendant knew the claim was false or fraudulent.  But keep in mind that false is a lesser standard than fraudulent.  Everything that is fraudulent will be false in some way.  This means that the lesser standard of false is the controlling term in this statute.

The criminal intent is confusing.  The law says that the prosecution must prove that the defendant intended to defraud by deceiving another to cause a loss of money, goods, services, or something of value, or to damage a legal, financial, or property right.  So we have three concepts that essentially mean the same thing. The claim must be False, fraudulent or filed with the intent to deceive.  Does this mean that filing a genuine claim can be a crime if when you file the claim you intent was to be paid when you did not deserve to be paid?  Or is this an attempted fraud?

This statute has been challenged on many grounds.  It is powerful but also vulnerable to legal challenges.  

The Horowitz law firm recently had charges dismissed in a major Penal Code section 550 case filed in Riverside County.  He has achieved the same success in many cases in the San Francisco Bay area.  If you need a Board Certified Criminal Defense Specialist (State Bar of California, Board of Legal Specialization) call Daniel Horowitz at 925-283-1863