How serious is concern regarding healthcare-related fraud in the U.S. and here in New Jersey? On the federal level, the United States Department of Justice maintains a Health Care Fraud Unit (HCF) composed of 60 prosecutors. They employ a “Strike Force Model” for pursuing these cases where the FBI, Office of Inspector General, and U.S. Attorney's Office partner with various state and local partners. In 2018, charges were filed in 309 cases that were estimated to total approximately $1.6 billion in losses.
New Jersey Medicaid Fraud Control Unit
The New Jersey Medicaid Fraud Unit is one agency that specifically focuses on instances of fraud in the state's Medicaid program. Between 2015 and 2017, they brought 56 indictments, which included 42 cases of provider fraud and 14 cases where patients were subjected to some form of abuse and mistreatment. During this three-year span, they recovered $58.6 million.
New Jersey Healthcare Claims Fraud Act (NJHCCFA)
The NJHCCFA was established to address this form of fraud. One of their primary purposes is to prevent false claims from being filed with insurers for medical products or services that were not received or performed. They also investigate illegal claims filed by someone who is not a licensed healthcare provider and to prevent schemes that involve “kickbacks” that defraud Medicaid and other payers.
Defining Health Care Claims Fraud
New Jersey defines this type of fraud in 2C:21-4.2. The crime may be committed by, or on behalf of, a practitioner such as those licensed to practice medicine, dentistry, physical therapy, pharmacy, and many others. It may be committed by making a “false, fictitious, fraudulent, or misleading” statement requesting payment for health-related services. The majority of claims today are submitted for reimbursement through electronic means.
N.J. Legislative Intent
The state views insurance fraud as a wasteful crime that creates potentially millions of losses. It recognizes that fraud leads to higher insurance premiums for everyone. This illegal practice is now punishable using serious criminal penalties and civil remedies when needed that may lead to forfeiture or suspension of licenses or certifications. The Insurance Fraud Detection Reward Program encourages those who suspect wrongdoing to come forward.
- A practitioner who consciously (knowingly) commits an act of healthcare claims fraud may be charged with a second-degree criminal offense
- When a practitioner commits an act of healthcare fraud that is attributed to recklessness, the charge is a third-degree offense
- Those who are not a healthcare practitioner that knowingly commit healthcare fraud may be charged with a third-degree offense
- If this individual intentionally commits five or more acts of fraud that total a minimum of $1,000, the charge is upgraded to a second-degree offense
- If the party that is not a healthcare practitioner commits an act of healthcare fraud that is attributed to recklessness, the charge is a fourth-degree offense
- For all levels of the offense, a monetary penalty may apply of up to five times the amount of claims involved
- Each claim that is fraudulently submitted will be charged as a separate offense; however, five or more acts may be combined and charged as one
- If a medical practitioner has signed or initialed a fraudulent claim, it is assumed that they have read and reviewed it
- The judge assigned may dismiss a claim if they determine that the conduct was a “de minimus infraction.”
- This applies when it is determined that the defendant was “within a customary license or tolerance”
- The defendant did not actually “cause or threaten the harm” or they acted to “an extent too trivial”
- The defendant present extenuating circumstances that are deemed as reasonable
- Unless the state attorney files the motion to dismiss, a written statement that explains the reasoning will be filed
New Jersey Medical Assistance and Health Services Act (NJMAHSA) Penalties
- Any person or provider who willfully accepts payments that they are not entitled or payments that are greater than they should be may be charged with a third-degree offense
- This applies to false statements made to receive a payment
- It also applies to those who “conceals or fails to disclose” receipt of such payments
- Despite being a third-degree offense, the presumption of non-imprisonment will not apply
- Any person or provider that is involved in any scheme related to a “kickback, rebate, or bribe” in connection with obtaining payments may also be charged with a third-degree offense
- Those who violate these provisions may also face civil penalties in addition to those imposed for the criminal offense
- This may include paying any interest that has accrued, which may be adjusted to account for inflation
- They also may be subject to a financial penalty that is up to three times the amount of claims involved
New Jersey Insurance Fraud Detection Program (2C:21-4.7)
When someone has the knowledge or has some reason to believe that healthcare-related fraud has been committed, they may provide this information to the Insurance Fraud Prosecutor. This office maintains an “insurance fraud hotline” that is available 24-hours-a-day for reporting such information. The Attorney General may pay up to a $25,000 reward for those who report healthcare or insurance fraud. The amount may be divided among multiple parties.
Choosing an Attorney
If you are facing allegations of healthcare fraud, the prosecution may be conducted by seasoned professionals associated with various governmental agencies. A conviction, depending on the level of the offense, could result in a sentence of incarceration of up to ten years. Under these circumstances, it is imperative to choose an attorney who practices within the realm of criminal defense on a daily basis.
Defense Lawyer for Allegations of Healthcare Fraud
Attorney Joseph D. Lento has been providing tenacious legal representation for clients facing these and many other forms of white-collar crime for many years. He employs a comprehensive approach that closely analyzes the individual evidence and circumstances associated with the case in order to create an effective defense strategy. Contact the office today at (888) 535-3686 for a case evaluation.