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Medicaid Fraud Investigations in New York

Todd Spodek, Esq. - 2/23/2013

Medicaid is a health insurance program for New Yorker’s who are unable to pay for Health Insurance on their own. To qualify for Medicaid you must meet certain income, resource, age, or disability requirements.

The government carefully monitors all medicaid recipients, using software that may remind one of the free flash games many of us know. People who are unable to qualify for medicaid, but cannot afford to pay out of pocket for health insurance should consider borrowing from a company like Go AAGP, but shouldn't risk jail and a criminal record by committing fraud. Applying for Medicaid benefits in New York State is a laborious process where you have to successfully navigate through a labyrinth of forms and procedures. In a lot of communities have newly arrived immigrants who will go to a neighborhood center where they will have individuals there who can assist them with the application process. In NY, the NYC Human Resources Administration (“HRA”) administers various social services programs including Medicare. Part of the HRA is The Investigation Revenue and Enforcement Administration (“IREA”) which has three major operating units. There is the Office of Investigation, Office of Revenue and Administration, and the Office of Medicaid Provider Fraud and Abuse Investigation. Unfortunately more and more applicants are finding themselves under investigation for Medicaid Fraud because they felt like they had no choice but lie to get government-paid insurance. That, however, is only a short-term solution that creates much greater long term problems.

Under the Office of Investigation, there are two subgroups. There is the Bureau of Fraud and Investigation (BFI), and Bureau of Eligibility Verification (BEV). BEV deals with the integrity of the cash assistance eligibility process through reviews of applicants and recipients of assistance. Activities include participant interviews, computer matches, collateral contacts and document verification. This process includes office as well as field interviews.

The Bureau of Fraud and Investigation (BFI) conducts criminal investigations of individuals and groups they believe are attempting or committing fraudulent acts against the social service programs administered by HRA. BFI’s investigations can result in criminal prosecutions, Administrative Disqualification Hearings, Civil Litigation and other administrative actions. BFI works closely with local, state and federal law enforcement and prosecutorial agencies in this fashion.There are two categories of people who are investigated and prosecuted for Medicaid fraud: benefits recipients and providers. The BFI is the group that send out these letters to the beneficiary recipient’s. I believe that most of the people you are referring to fall into this category. Most investigations are commence when recipients conceal or misrepresent material information on Medicaid or Family Health Plus applications. Upon receipt of the letter, the investigation is really done. They have enough information to bring you in.

Generally the Investigator will mail you a letter stating that meeting has been scheduled for a certain date and time at their office at 250 Church Street, on the 3rd Floor. Depending on the individual circumstances of the case, they will ask for various documents.

They might ask for any or all of the following:

Utility Bill

Social Security Card

School letter for children

Rent receipts

Pay stubs

Passport

Marriage Certificate

Lease

Drivers license

Income tax statements

Bank statements

Further, they will advise you that you may bring an attorney or another representative with you to these meetings. You don’t have to answer the questions asked by the Investigator, and if you choose not to your benefits can not be stopped solely on your choice not to answer. Generally, the Investigator is alleging that you misrepresented facts on your application as to your income and assets. As a recipient of medicaid benefits, you are obliged to give not only truthful disclosure of your financial situation but any changes in your income.

The majority of our clients have allegedly done one of the following:

Used a fictitious address on the application

Providing false information on the Medicaid application (lying or

concealing information about income, assets, etc.)

Altering or forging prescriptions

Re-selling medicine and products obtained through the program

Receiving services for which you are not eligible by means of

intentional misrepresentation

Allowing another person to use your Medicaid card to obtain services

Receiving and using several Medicaid Cards

I recommend that once an individual receives such a letter that seek immediate legal advice before speaking with any investigator. If not, the individual may very well go to the interview, confess to a crime, and provide much more information than is necessary. Any information your provide will be used against you. If your case is not settled administratively at the investigative stage, criminal charges are likely to be brought by the local District Attorneys Office. Once can be accused of several felonies including grand larceny, false filing, health care fraud, etc. An individual can be subject to restitution and fines, be banned from receiving or participating in Medicaid, have a criminal record, and possibly prison time. Additionally, the collateral consequences of a criminal conviction can effect their immigration status. Again, this all varies with the facts of the individual cases.

Further, they can refer the case out to the NYC Legal Department for civil litigation. If the legal department brings suit, the individual can incur high legal bills defending it and waste numerous hours at the Courthouse dealing with it. Lastly, if they lose or default on the case, they will be subject to garnishments and liens on any real estate they might own.

At this state of the investigation, the investigator is attempting to resolve the situation. They are offering your a chance to avoid prosecution and work out an agreement with them. An attorney can help by reducing the total owed, removing penalties and interest. Also, they can figure out if your actions were criminal in nature or rather an unintentional error.

If you do settle, the Investigator will want you to sign an installment note, which is really a settlement agreement. The note will be singed by the individual and notarized. It will be very similar to a mortgage, they will get an updated statement every month.

In this agreement, there will also be a provision about not referring this matter out to any other governmental agencies. I am not conformable with this provision alone. I don’t believe that it is sufficient protection. In any case, that I am involved in I always make sure that i have a supplemental settlement agreement that explicitly states that HRA will not only take no further action, but that they will make NO referrals to any third party agencies. Lastly, any payment plan that I would have a client enter into would have be one that in good faith the client can commit to and make the payments.

If not, it’s an exercise in futility. The Investigators are people as well, and they understand the situation. They have no interest in making you homeless just so you can pay back the premiums.

Helpful links:

http://www.health.state.ny.us/health_care/medicaid/

http://www.omig.state.ny.us/data/

We strongly recommend that you considering borrowing instead of cheating!