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(3.2.) Health Care Fraud
Dr. Krishna Murari Yadav, Assistant Prof. (Sr. Scale), LAW CENTRE -1, FOL, DU
Contents
(3.2.) Health Care Fraud ................................................................................................................. 1
(3.2.1.) Meaning .......................................................................................................................... 1
(3.2.2.) Introduction .................................................................................................................... 1
(3.2.3.) Kinds of health Care ....................................................................................................... 2
(3.2.4.) Laws................................................................................................................................ 2
(3.2.5.) Cases ............................................................................................................................... 3
([Link].) U.S. v. Ranbaxy USA .................................................................................................. 3
([Link].) Conviction of Kain Kumar .......................................................................................... 3
(3.2.1.) Meaning
Health care fraud means when an individual, a company, an organization or Government
knowingly misrepresents or misstates something about the type, the scope, or the nature of the
medical treatment or service provided, in a manner that could result in unauthorized payments
being made or deteriorate health.1
(3.2.2.) Introduction
Many times patients, hospitals, doctors, many organizations and Government itself involve in
health care fraud. „The market in fake and substandard pharmaceuticals is not unique to India.
Fake drugs produces a particular form of public health scandal.2
Many times viruses are prepared in lab to disturb health of public and promote its business.
Preparation of such viruses and releasing among public will come under category of health care
fraud. If China had released CORONA virus, it would have committed health care fraud.
Pharmaceutical company Micro Labs Limited gave freebees of one thousand crore rs. to doctors
to prescribe Dolo - 650 tablet. During CORONA period Dolo-650 was prescribed for fever. It
was sold more than 350 crore pilss since outbreak of Covid in March 2020. In RTI, information
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Available at: [Link] (Visited on September 26, 2022).
2
Sarah Hodges, “The case of the „Spurious Drugs Kingpin‟: Shifting Pills in Chennai, India,” Critical Public
Health, 29(4), (2019) pp. 473-483. Available at:
[Link] (Visited on December 03, 2022).
Dr. Krishna Murari Yadav, Assistant Prof. (Sr. Scale), LAW CENTRE -1, FOL, DU
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came that the Government knew names of 20 pharma firms which had bribed the docs. But a
single company was not punished.3
In insurance policy, many times insured persons hide disease, age and other crucial information.
Many times, person other than insured person take benefit of insurance. Many times, insurance
companies insert very complicated condition and do not give insured money in guise of such
complicated person. In Aaushman Bharat, BPL card holder gets benefit of five lakhs rs. Many
times doctors and patients make collusion and takes money by making double billing or false
bill.
Examples of health care fraud include:
Billing for services not rendered4 or goods not provided;
Falsifying certificates of medical necessity and billing for services not medically
necessary;
Billing separately for services that should be included in single service fees;
Falsifying plans of treatment or medical records to justify payments;
Misrepresenting diagnoses or procedures to maximize payments;
Misrepresenting charges or entitlements to payments in cost reports; and
Soliciting “kickbacks” for the provision of various services or goods.
(3.2.3.) Kinds of health Care
The 3 types of conduct that are generally prohibited by health care fraud laws are false claims,
kickbacks, and self-referrals. False claims are subject to several criminal, civil, and
administrative prohibitions. Kickbacks, or inducements with the intent to influence the purchase
or sale of health care–related goods or services, are prohibited. Finally, self-referrals- the referral
of patients to an entity with which the referring physician has a financial relationship are
outlawed.5
(3.2.4.) Laws
The USA has enacted the False Claims Act, the Anti-Kickback Statute and the Patient Referral
Act to deal with health care fraud.
Health care fraud is a fraud related to health care. Health care fraud comes under civil as well as
criminal law. Section 17 of the Indian Contract Act, 1872 deals with fraud. A contract concluded
due to fraud will be voidable contract. Victim can file civil suit. There is no special criminal law
to deal with this. It is regulated by the Indian Penal Code.
3
Banjot Kaur, There's an unhealthy alliance between doctors and pharma firms, Down to Earth, May 15, 2019.
Available at: [Link]
pharma-firms-64230
4
There was a seen of medical fraud in „Gabbar is back‟. Mr Akshaya Kumar played lead role in this movie.
5
Kalb, Paul E. "Health care fraud and abuse." JAMA 282.12 (1999): 1163-1168. Available at:
[Link] (Visited on September 26, 2022).
Dr. Krishna Murari Yadav, Assistant Prof. (Sr. Scale), LAW CENTRE -1, FOL, DU
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(3.2.5.) Cases
([Link].) U.S. v. Ranbaxy USA
The federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for
introduction into interstate commerce of any drug that is adulterated. When companies sell
adulterated drugs, they undermine the integrity of the FDA‟s approval process and may cause
patients to take drugs that are substandard, ineffective, or unsafe. 6
Generic drug manufacturer Ranbaxy pleaded guilty and agreed to pay $500 million to resolve
false claims allegations, cGMP violations and false statements to the FDA.
In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA
Inc., a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited,
pleaded guilty to felony charges relating to the manufacture and distribution of certain
adulterated drugs made at two of Ranbaxy‟s manufacturing facilities in India.
([Link].) Conviction of Kain Kumar
An Indian-origin physician has been sentenced to two years in prison and ordered to pay fine and
restitution of over a million dollars for engaging in a multi-faceted health care fraud scheme and
for illegally prescribing thousands of opioid painkillers and muscle relaxers.
Kain Kumar, 56, of California was sentenced by US District Judge Philip Gutierrez of the
Central District of California, who also ordered Kumar to pay USD 509,365 in restitution, USD
494,900 in asset forfeiture, and a USD 72,000 fine. Kain Kumar pleaded guilty in April 2019 to
one count of health care fraud and one count of distribution of hydrocodone.7
6
U.S. v. Ranbaxy USA, Inc., JFM-13-CR-0238 (D. Md.). [Fraudulent Representation to
FDA] [Link]
resolve-false
7
Indian-Origin Doctor Gets 2 Years Jail For Healthcare Fraud In US , January 07, 2020. Available at:
[Link]
2159918 (Visited on December 03, 2022).
Dr. Krishna Murari Yadav, Assistant Prof. (Sr. Scale), LAW CENTRE -1, FOL, DU
