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

July 5, 2020 Federal Criminal Attorneys

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 who 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 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.

In this scenario, the prosecutor will have a difficult time with the health care fraud case against Shea.  There is no evidence that Shea benefited from Dr. Serrano’s activities.  Furthermore, in preparing and sending the fraudulent claims in, she was just doing what she was told to do on her job. On top of that, if the total payments that occurred in the space of one year was less than $1 million, then the prosecutor would have a hard time sustaining a first degree fraud charge against Dr. Serrano. That said, the prosecutor could still charge the doctor with health care fraud in the second, third, fourth or fifth degree.

Offenses‌ ‌that‌ ‌are‌ ‌Related‌ 

Health care fraud in the fifth degree: New York Penal Law § 177.05

Health care fraud in the fourth degree: New York Penal Law § 177.10

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

Possible Defenses

In order for you to be convicted of health care fraud in the first degree, the prosecutor must have proof that you received payments for fraudulent claims from a single health plan in a single year that totaled more than $1,000,000. If there were over $1 million in payments but they were made to more than one health plan, or if they occurred over a period of more than a year, then you may have a valid defense against a charge of health care fraud in the first degree.

The Sentence

The crime of health care fraud in the first degree is categorized as a class B felony offense. Should you are convicted of this offense, you could get sent to jail for up to 25 years. You could also get sentenced to up to 5 years of probation. The pecuniary consequences of a conviction may be that you will be obligated to pay restitution to the victim as well as a substantial fine to the court.

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