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NY Penal Law § 177.10: Health Care Fraud in the Fourth Degree

What is Healthcare Fraud? Definition and Overview

Healthcare fraud is a kind of white collar crime that entails putting in false medical claims in order to get payments from a health plan or health insurance company. Healthcare fraud imposes an enormous cost to the health care system and to our nation’s economy as a whole. If a physician sends in a claim to an insurance company for a procedure that he or she never carried out in order to receive payment for that procedure and they do receive a payment from the insurance company, that physician would have committed health care fraud.

Who Can Commit Healthcare Fraud? Types of Medical Professionals

Health care fraud can also be committed by:

• Dentists who submit false dental procedure claims
• Pharmacists who bill for medications never dispensed
• Chiropractors who claim services not provided
• Ambulance business operators who inflate transport claims
• Other employees or owners of companies who send insurance claims to health plans for payment

Five Degrees of Healthcare Fraud in New York State

Five offenses related to health care fraud exist in the New York criminal code. They are:

• Health care fraud in the first degree
• Health care fraud in the second degree
• Health care fraud in the third degree
• Health care fraud in the fourth degree
• Health care fraud in the fifth degree

The specific charge that you could be looking at depends on the amount of money you received as a result of the fraud in a single year.

Healthcare Fraud Fourth Degree: Specific Requirements Under NY Penal Code § 177.10

You could be charged with health care fraud in the fourth degree under New York Penal Code § 177.10 if you knowingly submitted falsified health insurance claims and, as a result, you received payments to which you were not entitled. For this charge to be valid, the amount of the payments you received fraudulently must be:

• More than $3,000
• Less than $10,000
• In a single year

Real-World Example: Healthcare Fraud Case Study

For Example: Dr. Marcus, an internal medicine physician, sent some bills to a particular insurance company. The bills indicated that he visited with, on average, about 50 patients a day. This number raised an immediate red flag at the insurance company. Under normal circumstances, it would be nearly impossible for a single doctor to see that many patients in a single day. After disbursing the payments on a few of the bills, the insurance company stopped sending payments and started an investigation into the matter. The firm’s accounting department discovered that many of the claims Dr. Marcus submitted were duplicated. In this scenario, Dr. Marcus could be convicted of health care fraud in the fourth degree. To get the conviction, the prosecutor would need to show that:

• Dr. Marcus knowingly submitted duplicate bills
• The total amount of fraudulent claims for which he was sent payments was greater than $3,000

Related Healthcare Fraud Offenses in New York

Offenses‌ ‌that‌ ‌are‌ ‌Related:

• Health care fraud in the fifth degree: New York Penal Law § 177.05
• Health care fraud in the third degree: New York Penal Law § 177.15
• Health care fraud in the second degree: New York Penal Law § 177.20
• Health care fraud in the first degree: New York Penal Law § 177.25

Legal Defenses Against Healthcare Fraud Charges

Possible Defenses:

Lack of Intent Defense

If you were not aware that you were submitting fraudulent claims, then you could not be convicted for health care fraud in the fourth degree. For example, if a technical issue resulted in your computer sending out the same claims multiple times, then there would not have been an intent to defraud and the charge would not hold.

Employee Exception Defense

You cannot be prosecuted under New York Penal Law § 177.30 for health care fraud if your position in a hospital, medical clinic or private practice office is:

• Bookkeeper
• Clerk
• Other employee besides a manager or physician

And you simply executed the orders of your superiors without gaining any personal benefit from the fraud.

Sentencing and Penalties for Healthcare Fraud Fourth Degree

The Sentence: The crime of health care fraud in the fourth degree is categorized as a class E felony offense. Should you are convicted of this offense, you could:

• Get sent to jail for up to 4 years
• Get sentenced to up to 5 years of probation

Financial Consequences of Healthcare Fraud Conviction

The pecuniary consequences of a conviction may be that you will be obligated to:

• Pay restitution to the victim
• Pay a substantial fine to the court

According to United States Sentencing Commission data, the average sentence for healthcare fraud was 27 months in fiscal year 2023. Healthcare fraud costs the system billions annually, with civil settlements exceeding $1.8 billion in 2023 alone.