Health Care Fraud

Health care Fraud occurs when a person, with the intent to defraud a health plan, knowingly and willfully provides materially false information (or omits material information) to receive payment that the person is not entitled to under the circumstances. This New York law is codified in Penal Code Article 177. Like many New York laws, there is a federal law that criminalizes the same conduct. Health Care Fraud essentially occurs when medical providers like doctors or hospitals lie to an insurance company about the services they rendered to a patient. An example of health care fraud is when a patient goes to a doctor for a routine checkup, but the doctor bills the insurance company for the removal of a mole that never happened. The insurance company then pays the doctor for the procedure. The degree of health care fraud that the doctor would theoretically be guilty of depends on the amount of money the doctor gained from the procedure.

In its most basic form, this kind of fraud is Health Care Fraud in the Fifth Degree, which is a class A misdemeanor. However, the degree of the crime increases as the money gained increases. So if a person gains over $1,000 from the fraud, he is now guilty of Health Care Fraud in the Fourth Degree, which is a class E felony.

Under New York law, all degrees of Health Care Fraud have an affirmative defense. This affirmative defense, which is listed in Penal Code Section 177.30, essentially states that if the accused person was a clerk, bookkeeper or other employee and the person was merely acting on the orders of a supervisor and the person received no personal benefit from the act, then the person is not guilty of this kind of fraud. Like with all affirmative defenses, however, this defense does not immunize the person from arrest or prosecution. It is still the duty of the accused to prove at trial, through a preponderance of the evidence, the exculpating facts to prevail with this defense.

The degrees of Health Care Fraud, what the government needs to prove to sustain a conviction, and the applicable sanctions, are listed below. If you, or a loved one, is accused of Health Care Fraud, do not hesitate to contact John Buza for a free consultation.

  • Health Care Fraud in the First Degree

Health Care Fraud in the First Degree is codified in New York Penal Code Section 177.25. It is a class B felony. If a person with no prior felony convictions is convicted of a class B felony, the minimum period of incarceration is an indeterminate sentence of 1-3 years in prison and the maximum is 8 1/3 - 25 years. An indeterminate sentence is one in which the person is sentenced to a range and the department of corrections determines how much of that range the person must serve before he is eligible for release. If the person has been previously convicted of a prior felony within 10 years of the new conviction, excluding time spent in prison, the minimum period of incarceration is 4 1/2 - 9 years and the maximum is 12 1/2 - 25 years. In all circumstances, the person is forced to be on parole between 1 to 3 years after his release.

For the government to sustain a conviction for Health Care Fraud in the First Degree, the government must prove the following four elements beyond a reasonable doubt. It must prove:

  1. the person provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;
  2. the person did so knowingly, willfully, and with the intent to defraud a health plan;
  3. as a result of such information or omission, the person received payment in an amount that he was not entitled to under the circumstances; and
  4. the payment or portion of the payment wrongfully received from a single health plan, in a period of not more than one year exceeded over $1,000,000 in the aggregate.
  • Health Care Fraud in the Second Degree

Health Care Fraud in the Second Degree is codified in New York Penal Code Section 177.20. It is a class C felony. There is no minimum period of mandatory incarceration if a person with no prior felony convictions is convicted of a class C (non-violent and non-drug) felony, however, the maximum period of incarceration is an indeterminate sentence of 5 - 15 years. An indeterminate sentence is one in which the person is sentenced to a range and the department of corrections determines how much of that range the person must serve before he is eligible for release. If the person has been previously convicted of a prior felony within 10 years of the new conviction, excluding time spent in prison, the minimum period of incarceration is 3 - 6 years and the maximum is 7 1/2 - 15 years. There is no period of mandatory parole after the person is released from custody.

For the government to sustain a conviction for Health Care Fraud in the Second Degree, the government must prove the following four elements beyond a reasonable doubt. It must prove:

  1. the person provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;
  2. the person did so knowingly, willfully, and with the intent to defraud a health plan;
  3. as a result of such information or omission, the person received payment in an amount that he was not entitled to under the circumstances; and
  4. the payment or portion of the payment wrongfully received from a single health plan, in a period of not more than one year exceeded over $50,000 in the aggregate.
  • Health Care Fraud in the Third Degree

Health Care Fraud in the Third Degree is codified in New York Penal Code Section 177.15. It is a class D felony. There is no minimum period of mandatory incarceration if a person with no prior felony convictions is convicted of a class D (non-violent and non-drug) felony, however, the maximum period of incarceration is an indeterminate sentence of 2 1/3 - 7 years. An indeterminate sentence is one in which the person is sentenced to a range and the department of corrections determines how much of that range the person must serve before he is eligible for release. If the person has been previously convicted of a prior felony within 10 years of the new conviction, excluding time spent in prison, the minimum period of incarceration is 2 - 4 years and the maximum is 3 1/2 - 7 years. There is no period of mandatory parole after the person is released from custody.

For the government to sustain a conviction for Health Care Fraud in the Third Degree, the government must prove the following four elements beyond a reasonable doubt. It must prove:

  1. the person provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;
  2. the person did so knowingly, willfully, and with the intent to defraud a health plan;
  3. as a result of such information or omission, the person received payment in an amount that he was not entitled to under the circumstances; and
  4. the payment or portion of the payment wrongfully received from a single health plan, in a period of not more than one year exceeded over $3,000 in the aggregate.
  • Health Care Fraud in the Fourth Degree

Health Care Fraud in the Fourth Degree is codified in New York Penal Code Section 177.10. It is a class E felony. There is no minimum period of mandatory incarceration if a person with no prior felony convictions is convicted of a class E (non-violent and non-drug) felony, however, the maximum period of incarceration is an indeterminate sentence of 1 1/3 - 4 years. An indeterminate sentence is one in which the person is sentenced to a range and the department of corrections determines how much of that range the person must serve before he is eligible for release. If the person has been previously convicted of a prior felony within 10 years of the new conviction, excluding time spent in prison, the minimum period of incarceration is 1 1/2 - 3 years and the maximum is 2 - 4 years. There is no period of mandatory parole after the person is released from custody.

For the government to sustain a conviction for Health Care Fraud in the Fourth Degree, the government must prove the following four elements beyond a reasonable doubt. It must prove:

  1. the person provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;
  2. the person did so knowingly, willfully, and with the intent to defraud a health plan;
  3. as a result of such information or omission, the person received payment in an amount that he was not entitled to under the circumstances; and
  4. the payment or portion of the payment wrongfully received from a single health plan, in a period of not more than one year exceeded over $1,000 in the aggregate.
  • Health Care Fraud in the First Degree

Health Care Fraud in the Fourth Degree is codified in New York Penal Code Section 177.05. It is a class A misdemeanor. A person convicted of a class A misdemeanor may be sentenced up to 1 year in jail.

For the government to sustain a conviction for Health Care Fraud in the Fifth Degree, the government must prove the following three elements beyond a reasonable doubt. It must prove:

  1. the person provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;
  2. the person did so knowingly, willfully, and with the intent to defraud a health plan; and
  3. as a result of such information or omission, the person received payment in an amount that he was not entitled to under the circumstances.

Accusations of any kind of Fraud are serious. Feel free to contact John Buza, an experienced lawyer, for a free consultation if you, or a loved one, is accused of this crime.