A lot of NYC residents receive health care through the Medicaid program. By its nature, it is a complex mechanism that is hard to ensure and track compliance with, which results in billions of dollars wasted. To minimize this sum and recover at least some of it into the local and federal treasuries, the government sends its investigators to look into alleged Medicaid fraud. In this article, our lawyers explain how such investigations are carried out and what are their consequences.

Who Investigates Medicaid Fraud

There are several federal and state-level authorities charged with investigating into Medicaid fraud. And since most of the program’s expenses lie on the shoulders of state rather than the federal government, state authorities are becoming more active when fighting Medicaid fraud. Surely, New York State is no exception. Here, such investigations are handled by District Attorneys, the OMIG agents and MFCUs. Investigations into suspected recipient fraud are carried out by the Human Resources Administration.

What Can Set Off Investigation

There are a number of things that can trigger provider fraud investigations. Most commonly, it is upcoding and billing for services not provided. An agency may be routinely auditing an organization when it finds some discrepancy that may imply fraud and then it decides to investigate into it. Another reason is a whistleblower report which may be filed by a patient, the organization’s employee or just an outsider.

As for recipients, it turns out that a large share of them do not qualify for Medicaid for one reason or another. Two most common reasons for that are unreported income and residency discrepancy. Again, it may be a whistleblower who tips off that a Medicaid beneficiary has committed fraud, but this is very uncommon. Nowadays, state and federal agencies employ many analytical tools that allow its agents to sift through vasts amounts of data in a blink of an eye, detecting potential fraud cases that are worth looking into more carefully. The data may be property and car registrations, tax return information, business records, etc. The investigators may always use dedicated software to find unusual patterns in a provider’s coding practices.

Stages of Medicaid Fraud Investigation

Whatever are the reason and the cause of the investigation and whoever is in charge of it, they all start in a similar way.

  1. After receiving a lead, the agency allocates a team of agents to it and charges them with collecting the necessary evidence to prove that fraud took place. To achieve that, if the target is a provider, the agents may obtain data about the health care company’s financial transactions, come to the organization to ask its employees some questions, contact its patients, etc. If it is a recipient who is the subject of the investigation, then the investigators may get in touch with the person’s current and former employers and co-workers, keep a close watch on their place of residence to find out who is living with them, obtain financial information from banks about the person’s accounts, loans, mortgages, etc. In many cases, this phase of the investigative process does not require any participation of the targeted person or organization. Moreover, commonly the agents will do their best to make their presence unnoticed in order not to scare off the target.
  2. The next stage is contact with the targeted person or organization. As you see, by this time the agents most surely have already gathered enough information to bring the case against the person or company. Why do they still need to approach the recipient or the provider, you may ask. The answer is that the investigators may simply lack some document proof of the target’s guilt or they need some additional evidence – preferably the person’s own statements proving they are on the right track. They may send the person a letter to invite them to an interview and bring along some documents. They also have the right to issue subpoenas.
  3. Having gathered all the necessary information, the agency can now decide whether to drop or dismiss the case or to pass it on for further criminal proceedings. If the case is referred to court for prosecution, the person faces harsh administrative, civil and criminal penalties.

Consequences of Medicaid Fraud

People and organizations accused of Medicaid fraud may be sentenced on charges of grand larceny, welfare fraud, forgery, etc. Penalties include massive fines, jail time, probation, community service, conditional discharge. If the person can afford to pay restitution, the situation is much better, since it allows minimizing penalties. Nevertheless, a conviction means a permanent criminal record, which may influence the life of the person may years after the sentence is served.

Other consequences include a high probability that the person will lose access to public health care benefits (or the right to provide them) either for a very long period of time or permanently. Moreover, the provider may face medical license suspension or complete loss. Even if the person or organization accused of Medicaid fraud manages to avoid program exclusion and or license loss, chances are big that the public finds out about the case and the reputation will be hampered forever.

Besides that, permanent residents may lose their status and appear in jeopardy of deportation.

What to Do If Charged with Fraud

If you happen to face such a situation, knowing your rights can save you money, career and even freedom. The first thing you should know is that as either a Medicaid provider or a recipient, you have all chances to get audited or investigated one day. No one can be sure that this won’t ever happen to them. So stay alert for any signs that an investigation is underway. For example, your boss or colleague or a neighbor may tell you that someone has approached them and asked about you, and this isn’t something to be ignored. This is an opportunity for you to intervene early and hire a Medicaid fraud lawyer to handle the situation on your behalf.

When the agents approach you to either simply talk and pass you an interview letter, you should know that you are not obliged to talk to them. And don’t fall into the trap of thinking that this is not a big deal or that it’s not you who is targeted. The investigators are not here to work out a misunderstanding with you, they want to find proof that you are guilty.

Follow these guidelines to protect yourself:

  • Politely ask for a business card and tell the agents your legal counsel will get back to them shortly.
  • Don’t engage in any chit chats or conversations with the agents, whether on unrelated topics or about the case.
  • Don’t let the investigators in your apartment or office unless they have a warrant. Don’t give them any records or documents if they don’t have a subpoena. If they do, have your legal counsel check whether it is in order.
  • Immediately after the agents go, call a Medicaid fraud attorney to consult about the situation.

NYC Medicaid Fraud Lawyers at Joseph Potashnik and Associates

If you are a health care provider or recipient facing Medicaid fraud investigation in New York, call our attorneys any time. We are a top criminal defense law group with special emphasis on health care fraud cases. Equipped with over 80 years of joint experience in dealing with the OMIG, the MFCUs, the OIG and other agencies, we are capable of delivering the best possible outcome of any Medicaid fraud investigation.