By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA
A Health Care Provider Defense and Compliance Firm

In a victory for the government, the U.S. Supreme Court has breathed new life into federal wire fraud prosecutions by affirming that economic loss isn’t required to prove fraud. The decision in Kousisis v. United States comes at a time when health care fraud enforcement is escalating, and the implications for providers, vendors, billing entities, and compliance officers across the health care sector are profound.

At the core of the case was the question of whether misrepresentations used to fraudulently induce the award of government contracts, without causing actual economic loss, can support a wire fraud conviction. The Court said yes.

What Happened?

Stamatios Kousisis and Alpha Painting & Construction Co. were convicted of wire fraud for misrepresenting their compliance with disadvantaged business enterprise (DBE) participation rules in order to win lucrative transportation contracts from the Pennsylvania Department of Transportation. They argued that because the government received the contracted-for services, there was no economic harm and thus, no fraud.

The Court rejected that view. Writing for the majority, Justice Amy Coney Barrett said the government need not prove economic harm. All that’s required is that the misrepresentation was “material,” in other words, significant enough to influence a reasonable decisionmaker.

That means lying to get a contract, whether for hospital renovations, Medicaid transportation services, lab billing, or managed care enrollment, can trigger criminal liability even if the work was ultimately done as promised.

Why This Matters to the Health Care Industry

Health care is built on contracts and representations: Medicare and Medicaid enrollment applications, managed care agreements, value-based contracts, DBE certifications, anti-kickback attestations, grant reporting, and even 340B eligibility certifications. Every one of those is now squarely within the government’s crosshairs under Kousisis—even if there’s no quantifiable harm.

Key health care takeaways:

• False enrollment data or misstatements on the Medicare Application Form CMS-855? Prosecutable.
• Misleading representations in securing public health grants or behavioral health awards? Watch out.
• Marketing misrepresentations in risk-bearing managed care contracts? Even if the plan paid claims, it could be considered fraud.

This ruling shifts the threshold. It’s not about whether the government or payor lost money; it’s whether the misstatement mattered.

Materiality Is the New Battleground

While the Court stopped short of redefining “materiality,” both Gorsuch and Justice Thomas signaled that this low bar may not be enough of a check on prosecutorial overreach. Still, until further clarity comes, the DOJ now has a stronger foundation to charge fraud cases based on lies that influence contract decisions—even in the absence of financial injury.

Expect more aggressive False Claims Act theories and wire fraud charges in the following areas:

• Misrepresentations in Medicare Advantage enrollment marketing and broker contracts
• Inaccurate or manipulated quality or risk data
• Improper certifications in 340B, HPSA, FQHC, or Medicaid DSH programs
• DBE fraud in public health grants, mobile clinic build-outs, and emergency preparedness contracts

Our Take: Health Care Should Brace for More Fraud Enforcement

The Kousisis ruling affirms what we’ve been telling clients for years: honesty in the application process is not just ethical—it’s now criminally essential.

If you’re:

• Participating in state or federal grant programs,
• Submitting representations to CMS, HRSA, or SAM.gov,
• Relying on vendor certifications or DBE subcontractors, or
• Structuring deals with payors based on eligibility, benchmarks, or waivers…

You must assume those representations are actionable under wire fraud.

At Parrella Health Law, we defend providers and business owners facing investigations, audits, and FCA actions based on contractual misstatements, DBE certifications, and enrollment disclosures. If your entity is currently involved in or planning to engage in federally funded programs or contracts, let’s get ahead of this now.

Call us at 857-328-0382 or email Chris directly at cparrella@parrellahealthlaw.com.