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New York Health Care Fraud: Understanding NY Penal Law Article 177 Crimes, Arrests and Investigations

Health care, and issues surrounding the same, is discussed almost daily on the radio, television and internet. Simply, health care is a daily part of our lives in both the political and literal sense. While we may know about “Obama Care,” attempts to repeal the Affordable Health Care Act, Medicare, Medicaid, and different health insurance options, New York criminal lawyers often hear about or deal with health care issues in a completely different context. What is that you ask? Because of the prevalent fraud that is perpetrated to and in the health care system, District Attorneys and the New York State Attorney General actively investigate and prosecute individuals and groups of people from pharmacists and physicians to patients and office staff, for violating a Health Care Fraud pursuant to New York Penal Law Article 177. Depending on the amount of the theft from a health plan over a one year period, exposure to incarceration is not merely a legitimate concern, but a potential reality whether a person is arrested for First Degree Heath Care Fraud, Fifth Degree Health Care Fraud or crime in between.

Before addressing a central case breaking down the crime of Health Care Fraud, know the following. New York Penal Law sections 177.05, 177.10, 177.15, 177.20, 177.25, codify New York Health Care Fraud in the Fifth, Fourth, Third, Second and First Degrees respectively. The crime, in substance, makes it a misdemeanor to intentionally defraud a health plan by providing materially false information, or failing to provide this information, for the purpose of securing payment for a health care service or a health care item. The crime becomes a felony, and increases in severity, when the payments or money you receive, and are not entitled to, exceeds, $3,000.00, $10,000.00, $50,000.00 and $1 million respectively.

In People v. Khan, 82 AD3d 44 (1st Dept. 2011), the District Attorney secured a conviction for numerous crimes including Health Care Fraud in the Fourth Degree, PL 177.10, where Medicaid claims misidentified the recipient of medications. In lieu of examining the entire case, the following question is a worthwhile one that the court answered:

If a customer goes to a pharmacy to obtain medication for a spouse, would her or she be guilty of Health Care Fraud merely because the insurance claim or Medicaid claim is made in the spouse’s name? As Correctly addressed by the Appellate Court, the answer is in the negative.

“The definition of ‘person’ for purposes of prosecution under this statute excludes a recipient of a health care item or service unless such person was an accessory to the fraud (Penal Law [] 177.00 [2]). Thus, absent evidence that a spouse…is involved in a scheme to defraud a health plan, there would be no prosecution for health care fraud. Nor would a pharmacist who dispenses medications to someone other than the one for whom medications are prescribed commit fraud in the absence of evidence that the person picking up the medications is involved in an illegal scheme and the pharmacist is also aware of what is going on.”

Obviously, this blog merely touches on the crime or crimes involving thefts and larcenies in New York based on the crime of Health Care Fraud. To better understand these offenses, whether you are the target of an investigation for an Article 177 crime or you have been arrested for any degree of Health Care Fraud, review Saland Law PC’s New York Health Care Fraud Information Page where you will find ample materials on each of the statutory codes, collateral issues and related theft and fraud crimes you may face.

Saland Law PC is a New York criminal defense law practice representing individuals accused of and arrested for Health Care Fraud. The New York criminal lawyers and former Manhattan prosecutors at Saland Law PC represent clients throughout the New York City, Hudson Valley region, and beyond.


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