NY Penal Law § 177.25: Health Care Fraud in the First Degree

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. Pursuant to the statute, the term “health plan” is defined as any health insurance, managed care plan or contract under which a health care product or service may be provided and paid for. For example, Medicaid is included in this definition. Also, health care fraud can be committed by dentists, pharmacists, chiropractors, ambulance business operators, as well as other employees or owners of companies which send insurance claims to health plans for payment. Moreover, the individual could also be the owner or manager of a health care provider that was responsible for billing. For instance, working in collaboration with a doctor, the billing manager submits false claims to a health plan. When the payments come back, the doctor and the billing manager split the money.

Five Degrees of Healthcare Fraud in New York

Five offenses related to health care fraud exist in the New York criminal code. They are health care fraud in the first, second, third, fourth and fifth degrees. 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. You could be charged with health care fraud in the first degree under New York Penal Code § 177.25 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 $1,000,000 in a single year.

For Example

Dr. Marquita Serrano was a licensed orthopedic surgeon. She commonly submitted bills to health plans that claimed payments for procedures that she never performed. Shea, her office manager, was responsible for handling the billing. Although Shea had suspicions that Dr. Serrano was submitting fraudulent bills, she was afraid to bring it up to Dr. Serrano. The fraud continued for more than 3 years. Raking in well over $2 million in payments to Dr. Serrano. At some point, both Dr. Serrano and Shea the office manager were arrested and charged with health care fraud in the first degree.

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Legal Scenario: What Would You Do?

Scenario

You are a physician who recently received a letter from the New York Attorney General's office stating that your billing records are under investigation for systematically upcoding patient visits to higher reimbursement levels over the past three years. The letter references over $1 million in allegedly fraudulent claims submitted to Medicaid and several private insurance carriers.

What am I facing under New York law, and what should I do before responding to this investigation?

Attorney's Answer

Under NY Penal Law § 177.25, Health Care Fraud in the First Degree is a Class B felony carrying up to 25 years in prison, and it applies when a person knowingly commits health care fraud and the payment or benefit received exceeds $1 million. Even if the total falls below that threshold, you could still face charges under the lesser degrees outlined in §§ 177.05 through 177.20, each carrying significant penalties. You should not respond to the Attorney General's office or turn over any records without first retaining a criminal defense attorney experienced in healthcare fraud, as anything you say or produce now can be used to build the case against you. An attorney can evaluate whether the billing patterns have legitimate explanations, negotiate with investigators on your behalf, and protect your medical license throughout the process.

This is general information only. Contact us for advice specific to your situation.

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