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Health Care Fraud

Health Care Fraud is codified in New York under Penal Law Article 177. On March 1, 2006 New York state found it necessary to enact an entirely new article of penal law specifically to punish health care fraud. New York Penal Law section 177.00 et seq. and legislation accompanying it established a new agency within the already bloated New York State Department of Health, called the Medicaid Inspector General. The new agency further burdens health care professionals that provide services to the most needy with more administrative and bureaucratic headaches.

It is unclear why the statutes needed to be passed because New York already criminalizes larceny, schemes to defraud, and any number of other laws criminalizing false statements. The statute also requires completion of the act of obtaining the money for the fraud, so unlike other statutes which may be more effective at combating fraud, on executing false insurance claims or coverage forms, a defendant may only be charged with attempt.

If you or someone you know has been charged with health care fraud call our experienced Criminal Attorneys today. We may be able to help get your charges reduced or dismissed.

Health care fraud occurs when, with intent to commit fraud against a health insurance company, a person intentionally gives important and relevant false information or leaves out important information with the objective of obtaining money from a health insurance company for medical care or service and, thereby, takes in money that they are not entitled to. This same applies if the money is directed to a third party.

Health care fraud has five degrees of severity, ranging from a class A misdemeanor to a class B felony. The gradations of severity relate to the amount of money defrauded. The scheme is modeled on New York’s larceny statutes with $3,000 being the threshold for a class E felony, and $1,000,000.00 being the threshold for a Class B felony. A class B felony carries with it a maximum penalty of 25 years in prison.

It is an affirmative defense that a non-managerial employee of a health care provider was essentially just following orders. The statute does not intend to punish low level employees whose only participation in a health care fraud would be making false statements at the direction of their boss. Doing so would only punish low level employees for the conduct of their supervisors.

Here is a scenario that fleshes out the affirmative defense and the general statute. Dr. Jones owns a psychiatric clinic. Dr. Jones is one of the few psychiatrists that accepts insurance. Unfortunately for Dr. Jones, her clinic is not making enough money to pay her rent, bills, payroll, and her child’s college bills.

Dr. Jones decides it couldn’t hurt to fudge a few sessions here and there, so she makes up a few appointments for a couple of her patients and bills a few tests and evaluations that she did not actually administer. Dr. Jones directs her secretary Barry to file the faked insurance claims. Barry does as he is instructed then goes back to answering the phone and organizing Dr. Jones schedule. Dr. Jones does not offer Barry any incentive for filing the faked insurance claims.

In a few weeks the insurance company checks arrive for Dr. Jones. She is relieved that she is finally able to meet her expenses. Suddenly Dr. Jones has an idea, she thinks she knows how to get even more money out of the insurance company.

Dr. Jones concocts a scheme where drug addicts come to her office, she bills their Medicaid insurance for sessions she does not actually have, and she can write prescriptions for them for controlled substances. Dr. Jones thinks this will be very lucrative. She is right. All of a sudden her schedule is slammed with fake appointments and Dr. Jones real patients decide to stop seeing her. The checks that are being sent to Dr. Jones office are bigger and bigger. She takes in over $1,000,000.00 in fraudulent claims. The insurance company notices and refers the claims to the special investigative unit and the attorney general.

One day the state police raid Dr. Jones clinic. All of her papers are seized and she is arrested for health care fraud along with Barry.

At trial Dr. Jones is found guilty and sentenced to 20 years in prison. Barry is able to argue that he was a non-managerial employee, only trying to keep his job. Barry is excused by his affirmative defense and found not guilty.

As you can see, health care fraud can be very serious. If you or someone you love has been accused of health care fraud, please contact our team of New York Health Care Fraud Lawyers today. We may be able to help get your charges reduced or dismissed. Call our office today for a free consultation.

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