2nd Circuit Affirms Broad Scope of HIPAA Fraud Provisions

HIPAA authorizes the prosecution of any individual, not just health care providers, for "health care fraud," the 2nd U.S. Circuit Court of Appeals has ruled. Moreover, the target of the fraud need not be a health plan, the court added. The case is U.S. v. Lucien, No. 02-1228 (2nd Cir., Oct. 14, 2003).

Three individuals challenged their convictions under HIPAA for participating in an auto insurance fraud scheme involving staged collisions. They argued that HIPAA's fraud provisions apply only to "health care professionals," and that the auto insurers that received the fraudulent claims were not "health care benefit programs" subject to the law's protection.

The 2nd Circuit rejected both arguments. Regarding the scope of potential defendants under HIPAA, the court cited the language of the fraud provision itself (18 USC §1347), which authorizes the prosecution of "whoever" carries out a scheme "to defraud any health care benefit program." Congress' use of the word "whoever" undermines the claim that it "aimed for the health care fraud statute to apply only to medical professionals," the court ruled.

Turning to the definition of "health care benefit program," the court found that it included the no-fault auto insurers targeted by the scheme. The court noted that HIPAA defines this term as any plan or contract under which medical benefits are provided. Because the defendants "received a medical benefit as a result of the vehicle owners' no-fault insurance contracts, a health care benefit program is ... plainly implicated," the court concluded.