29 Sep 23

What is Medicaid fraud and what are the penalties in New Jersey?

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Last Updated on: 3rd October 2023, 07:30 pm


What is Medicaid Fraud and What are the Penalties in New Jersey?

Medicaid fraud is a big problem in New Jersey and across the country. Basically, Medicaid fraud is when someone lies or withholds information to get Medicaid benefits they aren’t entitled to. There are different types of Medicaid fraud, with different penalties, but they all involve some form of dishonesty or deception.

Some examples of Medicaid fraud include:

  • Billing for services that were never provided
  • Billing for unnecessary services
  • Billing for services at a higher rate than is allowed
  • Billing multiple times for the same service
  • Falsifying diagnoses to justify tests or procedures
  • Accepting kickbacks for patient referrals
  • Using someone else’s Medicaid card
  • Hiding income or assets to qualify for Medicaid

As you can see, there are lots of different ways providers or recipients can try to cheat the system. Medicaid fraud costs taxpayers billions of dollars every year. So it’s taken very seriously by investigators and prosecutors in New Jersey.

Penalties for Medicaid Fraud in New Jersey

The penalties for Medicaid fraud in New Jersey vary based on the exact nature of the offense. But in general, those convicted of Medicaid fraud face:

  • Up to 10 years in prison per offense
  • Fines up to $150,000 per offense
  • Having to repay up to triple the amount of damages
  • Loss of professional license

Let’s break down some of the specific laws and penalties in more detail:

Criminal Medicaid Fraud

In New Jersey, criminal Medicaid fraud charges often fall under the state’s Health Care Claims Fraud Act (N.J.S.A. 2C:21-4.2 and 2C:21-4.3). This covers offenses like:

  • Billing for services not performed
  • Misrepresenting what services were provided
  • Upcoding (billing for more expensive services than were rendered)

For even a single offense under this act, penalties can include:

  • 3-5 years in prison
  • Fines up to $150,000
  • Having to repay up to triple damages

So if a doctor billed Medicaid for $50,000 worth of procedures he didn’t actually perform, he could end up paying $150,000 in fines plus another $150,000 in damages – yikes!

Felony Medicaid Fraud

More serious or large-scale Medicaid fraud is often charged as a felony under federal law. This includes offenses like:

  • Billing over $1 million in false claims
  • Committing Medicaid fraud as part of an organized criminal group
  • Receiving kickbacks for Medicaid referrals

Penalties for felony Medicaid fraud can include:

  • Up to 10 years in federal prison per offense
  • Fines up to $250,000 for individuals or $500,000 for corporations
  • Having to repay up to triple damages

In addition to fines and prison time, those convicted of felony Medicaid fraud often face federal supervision after release and forfeiture of any assets connected to the fraud.

Medicaid Eligibility Fraud

Lying on a Medicaid application to obtain benefits you aren’t entitled to is considered Medicaid eligibility fraud. This could involve:

  • Failing to report income or assets
  • Claiming dependents who don’t live with you
  • Using someone else’s Medicaid card

If convicted, penalties for Medicaid eligibility fraud may include:

  • Up to 6 months in county jail
  • Fines up to $1,000
  • Having to repay benefits received
  • Bar from receiving Medicaid for 1 year

While less severe than other forms of Medicaid fraud, eligibility fraud is still a crime that carries real consequences.

Loss of Professional Licensure

For doctors, nurses, pharmacists and other licensed providers convicted of Medicaid fraud, loss of their professional license is often the biggest blow. New Jersey requires strict background checks for licensure. So any felony conviction or fraud conviction will make it very difficult to ever practice in the state again.

How New Jersey Detects and Deters Medicaid Fraud

With billions lost to Medicaid fraud every year, New Jersey deploys a wide range of tools to detect and deter fraud, including:

  • Data mining to identify abnormal billing patterns
  • Audits of Medicaid providers and claims
  • Undercover operations and sting investigations
  • Review of patient complaints
  • Analysis of tips and whistleblower reports

The state has also launched public education campaigns to increase awareness of Medicaid fraud and its consequences. And specialized Medicaid Fraud Control Units work with federal investigators to identify and prosecute fraud.

With so many eyes watching, those considering Medicaid fraud in New Jersey should think again. The penalties simply aren’t worth the risk.

For providers, the best protection against fraud allegations is to follow proper billing practices, document services accurately, and avoid questionable arrangements like kickbacks. If unsure whether a certain billing or referral practice is above board, consult with an attorney.

For recipients, be upfront about your household income, assets, and living situation when applying for Medicaid. If these change after you’ve been approved, report it promptly to avoid any penalties down the road.

Medicaid fraud cheats taxpayers, drives up healthcare costs, and deprives needy patients of benefits. So if you suspect Medicaid fraud, report it right away. This will protect the integrity of an essential program for New Jersey’s most vulnerable residents.


Learn more about Medicaid fraud and penalties in New Jersey: