Medicaid or Medicare fraud is a broad term that refers to alleged deception in the administration or receipt of health care benefits. This is typically a federal crime because these programs, even if administered by the state, are funded by the federal government. The U.S. Department of Health and Human Services Office of Inspector General (OIG) oversees Medicaid Fraud Control Units (MFCUs) in all 50 states, including New Jersey. As a result, an increasing number of New Jersey care providers are facing charges for Medicare or Medicaid fraud.
Some examples include:
- In 2024, an NJ jury convicted a New Jersey physician of three counts of Medicare fraud for ordering unnecessary care to Medicare patients.
- In 2025, four NJ owners of nursing home facilities pleaded guilty to Medicaid fraud charges of a financial scheme that allegedly enriched owners while leaving patients without necessary supplies and care.
- In 2024, the U.S. Attorney charged 13 NJ residents with Medicare and Medicaid fraud for an alleged scheme that involved paying patients to allow false medical billing under their names.
While these cases against physicians and facility owners are widely reported in the news media, allegations of Medicare and Medicaid fraud may involve all types of care providers. The Lento Law Firm is an experienced Medicare and Medicaid defense firm with a proven track record of success. Contact our office today at (888) 535-3686 for a case evaluation.
Medicare or Medicaid Fraud Laws in NJ
Several federal and state laws govern the administration of federal and state healthcare benefits in New Jersey.
False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733
This federal law makes it a crime to overcharge or overbill the federal government. An allegation of Medicare or Medicaid fraud under the False Claims Act typically involves a care provider billing for services they did not provide or billing for procedures or services that were more complex than those actually provided.
Anti-Kickback Statute
This federal law criminalizes paying to generate Medicare or Medicaid billing activity. People may be charged for either providing or receiving payment. Fines under this law may be up to $50,000 plus three times the amount of the money provided.
Stark Laws
The Stark Laws make it a crime for a physician to refer Medicare or Medicaid patients to businesses in which the physician or a family member has a financial interest.
These laws, along with several other regulations and provisions, establish a framework for prosecuting Medicare and Medicaid fraud in the state of New Jersey. The investigation of violations of these laws may be conducted by federal entities and also by state authorities.
New Jersey Medicaid Fraud Control Unit (MFCU)
In New Jersey, the Office of the Insurance Fraud Prosecutor at the Attorney General's Office is responsible for investigating and prosecuting healthcare insurance fraud, including Medicare and Medicaid Fraud. The Prosecutor's Office includes the New Jersey Medicaid Fraud Control Unit (MFCU), which investigates alleged violations of the False Claims Act and other laws related to the New Jersey Medicaid Program.
The MFCU will investigate the following types of accusations:
- Healthcare providers suspected of engaging in false or fraudulent billing to New Jersey Medicaid.
- Fraudulent activities by patients, care providers, or others.
- Alleged violation of the False Claims Act made to New Jersey Medicaid.
- Alleged fraud in the administration of a facility or agency that pertains to or impacts New Jersey Medicaid.
The MFCU has a team of investigators, attorneys, and auditors. Although they are not part of New Jersey Medicaid, they have a wide range of investigative powers to address fraudulent activity related to New Jersey's Medicaid program. They may also investigate Medicare fraud if there is a nexus with Medicaid fraud, such as when patients with both Medicare and Medicaid are treated at the same practice or facility.
Investigations Prior to Charges
Providers may suspect or become aware of Medicare or Medicaid fraud investigations long before any formal charges are made. These signs may include:
- A search warrant for billing or care records.
- A Grand Jury Target letter.
- A Grand Jury subpoena.
- A Grand Jury witness letter.
- Increased record requests from compliance entities.
If you become aware that an investigation is pending as to your practice or facility, contact the Lento Law Firm immediately. Once the process begins, it is crucial to have legal counsel to develop a defense strategy and safeguard your practice and reputation.
Common Types of Medicare/Medicaid Fraud Allegations
Some of the most common Medicare/Medicaid fraud allegations include:
- Billing for care not provided, also known as “phantom billing”
- Double billing.
- Billing for unnecessary care.
- Billing for more expensive care than provided, or “up-coding.”
- Billing for the wrong type of care, also known as “mis-coding.”
- Taking kickbacks to refer patients.
- Billing for non-existent patients.
- Prescribing unnecessary care or prescription drugs.
- Providing and billing for unnecessary care.
- Ordering medically unnecessary tests.
- Billing for steps of a single procedure as if they occurred at different times.
- Waiving unqualifying co-pays or deductibles.
Even if done inadvertently, these actions may be charged as Medicare or Medicaid fraud.
Who Can Be Charged with Medicare or Medicaid Fraud?
Almost anyone participating in a clinic, care agency, hospital, or other healthcare entity can find themselves facing charges for Medicare or Medicaid fraud. Some common targets for charges of this type include:
- Physicians.
- Care facility owners or managers.
- Home health care agency owners or managers.
- Personal care attendants.
- Hospital managers or owners.
- Nurses or nurse practitioners.
- Patients, family members, and guardians.
- Pharmacists.
- Retail pharmacy owners and managers.
- Outpatient mental health providers.
- Inpatient mental health facilities and providers.
In short, almost anyone who bills Medicare or Medicaid or who assists another party in such billing can be charged with Medicare or Medicaid fraud. While the media tends to cover allegations of vast schemes to defraud, even a single instance of overbilling can lead to charges of fraud.
Penalties Under the False Claims Act
The False Claims Act criminalizes making false or fraudulent claims for payment, as well as making any material false statement regarding a claim. Penalties under this law include:
- Fines up to $250,000.
- Up to five years in prison.
- Restitution or recoupment of overbilling amount.
- Triple damages (i.e., the amount of damages is tripled).
- Exclusion from Medicare or Medicaid programs.
Exclusion from Medicare or Medicaid programs may prevent providers from practicing or seeking employment in the vast majority of hospitals and facilities.
Penalties Under the Anti-Kickback Statute
The Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) prohibits providers from soliciting or receiving kickbacks, bribes, or other financial incentives to refer patients under a federal healthcare program. Penalties for violations of this law include:
- Fines of up to $50,000 per violation
- Up to five years in prison.
- Recoupment or triple damages.
- Exclusion from Medicare or Medicaid.
As stated earlier, this exclusion from Medicare or Medicaid may result in the end of the practice or facility in question.
Penalties Under Stark Laws
The Stark Laws prevent physicians from referring patients to entities in which they (or a close relative) have a financial interest. Penalties under these laws include:
- Penalties of up to $15,000 for each service.
- Refund of monies or denial of payment.
- Fines of up to $100,000 for financial schemes.
- Exclusion from Medicaid or Medicare programs.
Consequences Beyond Criminal and Civil Penalties
While civil penalties, criminal fines, potential prison sentences, and exclusion from Medicare or Medicaid programs are serious enough, the potential consequences of fraud allegations are even greater. If you are investigated for Medicare or Medicaid fraud, you will likely face a challenge to your professional license from a state licensing board. Furthermore, even if you are ultimately vindicated, charges of this nature can still cause damage to your practice and reputation. For these reasons, most people accused of Medicare or Medicaid fraud have no choice but to vigorously defend themselves against the charges with every available resource.
If you become aware that you are being investigated or your facility is being investigated for alleged fraud, it is essential to have experienced legal counsel. An experienced fraud defense attorney can help plan your best defense and prevent unnecessary damage to your business, practice, and reputation.
Defenses to Medicare or Medicaid Fraud
The Lento Law Firm will begin evaluating your case immediately and identify possible defenses. Commonly, these defenses include:
- Lack of evidence.
- Exclusion of improper evidence.
- Lack of intent.
- Mistake.
- False allegations for personal gain or to shift blame.
- The fraud was not material.
- The defendant did not participate in any false or misleading billing, even if others at the facility were involved.
The best defense to charges of Medicare or Medicaid fraud will depend on the nature of the accusations. The Lento Law Firm can defend against charges of health insurance fraud while simultaneously defending your professional license and your ability to continue practicing your profession.
The Lento Law Firm Defends Against Fraud Charges
The Lento Law Firm is known for providing tough, effective representation for clients facing white-collar criminal charges, including those for Medicare or Medicaid fraud. We have a proven track record of representing medical professionals and others in cases involving charges of fraud or improper billing. Contact our office today at (888) 535-3686 for a case evaluation.
