Written by David Boyer, Partner. Last updated September 1, 2026

Healthcare Fraud Sentencing: How Federal Courts Calculate Loss and What It Means for Your Case

On This Page

• Why Loss Is the Central Issue in Healthcare Fraud Sentencing
• What Is Healthcare Fraud Under Federal Law?
• How Courts Calculate Loss Under USSG § 2B1.1
• The Special Rule for Federal Health Care Offenses Involving Government Programs
• Strategies for Challenging the Government’s Loss Calculation
• Steps to Take if You Are Facing Healthcare Fraud Sentencing
• How Evergreen Attorneys Can Help with Healthcare Fraud Sentencing
• Frequently Asked Questions

Healthcare fraud sentencing in federal court is driven almost entirely by one number: the loss amount the government attributes to the offense. Under the U.S. Sentencing Guidelines, a difference of even a few hundred thousand dollars in the calculated loss can shift an advisory guideline range by years. If you are facing a federal healthcare fraud charge or have already been convicted, understanding how courts arrive at that number, and what you can do to challenge it, is the most consequential step in preparing for sentencing.

Why Loss Is the Central Issue in Healthcare Fraud Sentencing

Federal healthcare fraud cases, typically charged under 18 U.S.C. § 1347, are sentenced using U.S.S.G. § 2B1.1, the same guideline that governs theft, property destruction, and fraud offenses generally. That guideline sets a base offense level and then increases it through a graduated table tied directly to the dollar amount of loss. The higher the loss, the higher the offense level, and the longer the advisory guideline range presented to the sentencing judge.

United States Sentencing Commission data confirm that healthcare fraud cases routinely involve median losses well above $900,000. The vast majority of defendants in these cases receive a term of imprisonment. Because the guideline range anchors the judge’s sentencing analysis even though it is advisory, contesting or narrowing the loss figure is often the single most effective way to reduce a healthcare fraud sentence.

What Is Healthcare Fraud Under Federal Law?

Under 18 U.S.C. § 1347, healthcare fraud is knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or to obtain money or property from such a program through false or fraudulent pretenses. The statute covers schemes directed at Medicare, Medicaid, TRICARE, private insurers, and any other health care benefit program.

The statutory penalties are severe. Each count of healthcare fraud carries up to ten years of imprisonment. If the offense results in serious bodily injury, the maximum rises to twenty years per count. If death results, the court may impose a sentence up to and including life imprisonment. These statutory maximums set the outer boundary; within them, the Sentencing Guidelines and the loss calculation drive the actual range the judge considers.

How Courts Calculate Loss Under U.S.S.G. § 2B1.1

Under U.S.S.G. § 2B1.1, loss is defined as the greater of actual loss or intended loss:

• Actual loss is the reasonably foreseeable pecuniary harm that resulted from the offense.
• Intended loss is the pecuniary harm the defendant intended to cause, including harm that would have been impossible or unlikely to occur.

This distinction matters enormously. In healthcare fraud cases, the amount billed to an insurer frequently exceeds what the insurer would ever have paid. A provider may submit $5 million in claims, but the insurer’s allowed amounts and fee schedules would have capped actual payments at a fraction of that figure. Under the intended loss definition, however, courts can treat the full billed amount as the relevant figure if the defense does not present evidence to narrow it.

Courts are not required to calculate loss with precision. The Sentencing Guidelines require only a “reasonable estimate” of the loss, based on available information. Appellate courts have affirmed that courts may rely on reasonable estimates and that intended loss encompasses harm that was impossible or unlikely to materialize

The loss figure can also incorporate relevant conduct beyond the charged counts, including uncharged billing conduct. Defense counsel must therefore scrutinize not only the indicted transactions but the entire scope of billing that the government may attribute to the defendant at sentencing.

Evergreen Attorneys won 9-0 in the U.S. Supreme Court in United States v. Hemani in June 2026, reflecting the firm’s proven ability to challenge federal sentencing outcomes at the highest level.

 

The Special Rule for Federal Health Care Offenses Involving Government Programs

The Sentencing Guidelines contain a specific provision, added by Amendment 749, that applies only to federal health care offenses involving a government health care program such as Medicare or Medicaid. This amendment added enhancements under § 2B1.1 based on the loss amount. For example, a defendant convicted of a federal health care offense involving a government health program with a loss of more than $1,000,000 receives a 2-level increase to their offense level. Losses involving more than $7,000,000 and $20,000,000 increase the offense level by 3 and 4 levels, respectively.

In practical terms, this means the government can establish its loss figure simply by presenting the total amount billed. If the defense does not rebut that figure, the court may accept the aggregate billed amount as the intended loss for guideline calculation purposes. Appellate court decisions applying this rule have confirmed that unrebutted billing evidence is sufficient to establish intended loss by a preponderance of the evidence.

This rule creates a significant burden-shifting dynamic. The defendant must affirmatively present evidence that the billed amount overstates the economic harm. Without a proactive challenge, the sentencing court is likely to adopt the government’s number, which can be the difference between a guideline range measured in months and one measured in decades.

Strategies for Challenging the Government’s Loss Calculation

Defense attorneys can contest healthcare fraud loss calculations on multiple fronts. The United States Sentencing Commission Primer on Loss Calculation Under §2B1.1 outlines the analytical framework courts use, and effective advocacy requires engaging with each element:

• Crediting legitimate services. If the defendant provided medically necessary services, the value of those services may reduce the loss figure. The guidelines allow credits against loss for value the victim received.
• Rebutting prima facie intended loss. In government program cases, the defense can introduce fee schedules, allowed amounts, claim rejection data, and expert testimony to demonstrate that the aggregate billed amount does not reflect the defendant’s actual intent or the program’s realistic exposure.
• Narrowing relevant conduct. Loss calculations can sweep in uncharged conduct. Challenging the scope of relevant conduct, particularly where the government attributes billing by co-conspirators or separate business entities, can substantially reduce the total.
• Addressing restitution separately. Restitution in federal healthcare fraud cases is often ordered alongside the custodial sentence. Because restitution calculations may differ from guideline loss calculations, defense counsel should ensure that the restitution amount reflects only actual losses to identified victims.

Each of these strategies requires forensic analysis of billing records, medical charts, fee schedules, and program data. The earlier defense counsel begins this analysis, the stronger the position at sentencing.

Steps to Take if You Are Facing Healthcare Fraud Sentencing

1. Retain experienced federal defense counsel before the sentencing hearing. Loss calculations are typically contested through the presentence report process and any subsequent sentencing memoranda.
2. Obtain and analyze the Presentence Investigation Report (PSR) as soon as it is disclosed. The probation officer’s initial loss figure is often the starting point for the court’s analysis.
3. File timely objections to any loss calculation in the PSR that relies on inflated billed amounts, includes services that were medically necessary, or attributes conduct beyond the defendant’s actual involvement.
4. Gather supporting evidence, including fee schedules, insurer remittance records, claim denial data, and medical records establishing the legitimacy of services provided.
5. Consider retaining a forensic accountant or billing expert who can testify about the gap between billed amounts and the program’s actual exposure.
6. Evaluate whether other guideline factors, such as role enhancements, number of victims, or related charges like aggravated identity theft, interact with the loss calculation in ways that can be mitigated.

How Evergreen Attorneys Can Help with Healthcare Fraud Sentencing

Evergreen Attorneys focuses exclusively on federal criminal defense, including healthcare fraud prosecutions involving disputed loss calculations under U.S.S.G. § 2B1.1. The firm’s practice includes analysis of government billing evidence, preparation of forensic loss challenges, and development of sentencing memoranda that present the court with a credible alternative to the government’s loss figure.

In cases involving government health care programs, Evergreen Attorneys works to rebut prima facie intended loss evidence by identifying legitimate services, isolating inflated billing, and narrowing the scope of relevant conduct attributed to the defendant. The firm also addresses how loss interacts with other guideline adjustments, restitution orders, and consecutive penalties, building a comprehensive sentencing strategy rather than contesting the loss number in isolation.

Frequently Asked Questions

What is the difference between actual loss and intended loss in federal healthcare fraud sentencing?

Actual loss is the reasonably foreseeable financial harm that resulted from the fraud, meaning the money an insurer or program actually lost or was likely to lose. Intended loss is the financial harm the defendant intended to cause, even if that harm was impossible or unlikely to occur. In healthcare fraud cases, intended loss is often far higher than actual loss because it can include the full amount billed to an insurer, regardless of whether the insurer would have paid that amount. Courts use whichever figure is greater, so intended loss frequently controls the guideline calculation.

Can the total amount billed to Medicare be used as evidence of intended loss?

Yes. Under the special rule for federal health care offenses involving government health care programs, the aggregate dollar amount of fraudulent bills submitted to a program like Medicare constitutes prima facie evidence of intended loss. If the defense does not rebut that figure with evidence such as fee schedules, allowed amounts, or proof of legitimate services, the court can adopt the billed total as the intended loss for sentencing purposes. This makes it essential for defendants to proactively challenge the government’s billing-based loss figure.

How does the loss amount interact with restitution in a federal healthcare fraud case?

Restitution and guideline loss are related but distinct calculations. The guideline loss under U.S.S.G. § 2B1.1 determines the offense level and advisory sentencing range. Restitution, typically ordered under the Mandatory Victims Restitution Act, compensates identified victims for their actual losses. Because these figures are calculated under different standards, the restitution amount may be lower than the guideline loss figure, particularly when intended loss rather than actual loss drove the guideline calculation. Defense counsel should ensure the restitution order reflects only verified actual losses rather than the broader intended loss figure used for guideline purposes.

When should a person or business facing a federal healthcare fraud investigation involve defense counsel?

Defense counsel should be involved as early as possible, ideally before any interview, document production, or plea negotiation. In healthcare fraud cases, the loss calculation that will drive sentencing exposure is shaped by evidence gathered and concessions made during the investigation and pretrial phases. Once the government has locked in its billing-based loss figure in the indictment or the Presentence Investigation Report, challenging that number becomes significantly harder. Early involvement allows counsel to preserve evidence of legitimate services, identify weaknesses in the government’s loss methodology, and position the defense for the most effective sentencing advocacy.

If you are facing federal healthcare fraud charges or sentencing involving a disputed loss calculation, contact Evergreen Attorneys at (303) 948-1489 for a free and confidential consultation.