Health Care Fraud
Health Care Fraud is a serious crime charged in both federal and state courts that can lead to prison time, large fines and a variety of professional consequences. Health care fraud investigations involve complex analysis of billing and bank records, interviews of patients and employees, and critical examination of patient medical records. Experienced lawyers at ZMO Law PLLC can help. But one caution: determining whether a crime has occurred can be complicated. It's a legal determination made by lawyers, prosecutors, judges and—ultimately—juries. The material on these pages is just for informational purposes; only a licensed lawyer can help you figure out whether you might be charged or convicted of a health care fraud crime. Past results are no guarantee of future outcomes.
What is health care fraud?
Health care fraud refers to medical providers or their employees deceiving health insurance companies in order to obtain money they are not entitled to. It can take a variety of forms, but some of the most common include:
Billing Fraud: Over billing or false billing consists of submitting false claims for services that were not provided, services that were not necessary, or services that were billed at a higher rate than is justified.
Kickbacks: Offering, paying or receiving money or anything of value to obtain referrals to specific medical care providers is usually—but not always—illegal under federal and state law.
Upcoding and Unbundling: Upcoding involves billing for a more expensive service than was actually performed, while unbundling involves billing separately for services that are typically billed together at a lower cost.
Illegal Drug Schemes: Selling or prescribing legal narcotics for illegal purposes can be prosecuted as fraud or drug trafficking or both. Illegally distributing drugs in a medical setting is referred to as prescription drug diversion, where prescription drugs are illegally sold or distributed, often resulting in fraudulent billing to insurance companies.
How are crimes against medical practitioners investigated?
A variety of federal and state agencies are often involved in investigations into doctors, nurses and others who work in healthcare.
Drug Enforcement Administration (DEA): The DEA investigates cases related to illegal prescription drug distribution, diversion, and abuse, which can involve health care fraud and other criminal activities.
Department of Health and Human Services (HHS): Within the federal HHS, the Office of Inspector General (OIG) investigates fraud and abuse in programs operated or funded by HHS, including Medicare and Medicaid.
Centers for Medicare & Medicaid Services (CMS): CMS works closely with the HHS-OIG and other law enforcement agencies to investigate frauds perpetrated against the Medicare and Medicaid entitlement programs.
Federal Bureau of Investigation (FBI): The FBI investigates health care fraud cases that involve complex schemes, organized crime, or significant financial losses.
Department of Justice (DOJ): The DOJ prosecutes health care fraud cases at the federal level. It works with agencies like the FBI and HHS-OIG to investigate cases and bring charges against people or organizations engaged in fraudulent activities.
New York State Office of the Attorney General (NYAG), Medicaid Fraud Control Units (MFCU): MFCU is a unit within the NYAG that investigates and prosecutes health care fraud, including cases involving Medicaid fraud, insurance fraud, and other forms of health care crime and misconduct.
New York State Office of the Medicaid Inspector General (OMIG): Since the state administers the Medicaid program, OMIG is responsible for detecting, preventing, and prosecuting Medicaid fraud and abuse in New York State.
New York State Department of Financial Services (DFS): DFS regulates insurance companies, including health insurers, in New York State. It investigates allegations of insurance fraud, including fraudulent claims submitted to health insurance plans.
New York State Department of Labor (DOL): The DOL investigates various types of fraud, including workers' compensation fraud and fraud related to employee benefit plans, which can arise out of fraudulent medical billing.
The Office of the Inspector General (OIG) for New York City Health + Hospitals Corporation (HHC): HHC-OIG is responsible for investigating health care fraud and other criminal activities involving people doing business with or receiving funds from NYC Health + Hospitals and MetroPlusHealth Health Plan.
New York State Department of Health (DOH): The DOH oversees health care delivery and public health in New York State, and sometimes collaborates with other agencies in investigations involving health care providers or facilities.
Investigations often involve numerous different agencies working together, with prosecutions handled by the Department of Justice, the New York State Attorney General, or local District Attorney’s Offices.
What’s the difference between Medicaid fraud, Medicare fraud and Health Care fraud?
Medicaid fraud and Medicare fraud are specific types of health care fraud, which involves fraud committed against government programs.
Medicaid is a government program in the United States that provides health coverage to low-income individuals and families. It is jointly funded by the federal government and individual states, but it is administered by the states according to federal requirements. Medicare is a federal health insurance program in the United States primarily for people who are 65 years old and older, and people with disabilities.
Providers bill Medicaid and Medicare in the same manner as they bill private health insurance companies, but Medicaid and Medicare often have special additional rules and regulations. Defrauding Medicaid or Medicare is a form of health care fraud, that can involves breaking additional federal and state laws designed to protect taxpayer funded programs.
What federal laws are used to prosecute health care fraud?
Several federal laws are used to prosecute health care fraud in the United States. Some of the key laws include:
Health Care Fraud Statute (18 U.S.C. § 1347): The Health Care Fraud Statute makes it a crime to knowingly defraud a health insurance company, including Medicaid or Medicare, by obtaining—or attempting to obtain—money through false pretenses. This statute makes it a crime to request a payment from a health insurance company while lying to them or deceiving them in some way.
Anti-Kickback Statute (42 U.S.C. § 1320a-7b): The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving anything of value in exchange for referrals or the generation of business involving federal health care programs. For example, if a physician receives money or anything of value from a laboratory in return for sending all his patients blood tests to that specific laboratory, both the physician and the laboratory could be found to violate the Anti-Kickback Statute.
Physician Self-Referral Law (Stark Law): The Stark Law prohibits physicians from referring Medicare or Medicaid patients for certain health services to hospitals or other entities with which they have a financial relationship, unless an exception applies.
Federal Food, Drug, and Cosmetic Act (FDCA): The FDCA prohibits various offenses related to the manufacture, distribution, and sale of drugs, medical devices, and other health care products.
These are some of the main federal laws used to prosecute health care fraud, but there are other statutes and regulations that may also apply depending on the specific circumstances of the case.
What New York State laws are used to prosecute health care fraud?
In New York, several laws are used to prosecute health care fraud at the state level. Some of the key statutes include:
Health Care Fraud, Penal Law Article 177 : New York’s Health Care Fraud statute addresses various forms of health care fraud, including insurance fraud, fraudulent practices by health care providers, and fraudulent billing schemes. It encompasses a wide range of fraudulent activities related to health care services and insurance claims.
Falsifying Business Records, Penal Law Article 175 : New York’s statutes on falsifying written records prohibit knowingly making or tampering with business records with the intent to defraud. They can be applied to cases where people or companies alter medical records or other documents to support fraudulent insurance claims or billing practices.
Larceny, Penal Law Article 155: Larceny is stealing. The New York law targets theft of all types, but is often charged in conjunction with Health Care Fraud for the stealing of money from insurance companies through false billing.