New Jersey Law Targets Health Care Claims Fraud

Health care claims fraud—making false or misleading statements to get payments for health services—has become a big issue in New Jersey. A specific law, Section 2C:21-4.2, defines health care claims fraud and sets out penalties. This article explains the key definitions, penalties, defenses, and implications so doctors, hospitals, insurance companies and patients understand the law.

What is Health Care Claims Fraud in New Jersey?

Basically, health care claims fraud involves lying on billing paperwork to get paid. The New Jersey law defines it as:

“Making, or causing to be made, a false, fictitious, fraudulent, or misleading statement of material fact in, or omitting a material fact from, any record, bill, claim or other document, in writing, electronically or in any other form, that a person attempts to submit, submits, causes to be submitted, or attempts to cause to be submitted for payment or reimbursement for health care services.”

That’s a mouthful! Let’s break it down:

• It has to be a false or misleading statement—an outright lie or leaving out key facts
• On any billing paperwork—claims, bills, records, documents
• To get payment for health services that weren’t provided or weren’t necessary

Examples include billing for services that weren’t performed, billing multiple insurers for the same service, inflating costs of services, or prescribing unnecessary medical equipment.

This law covers any attempt to submit fraudulent paperwork, even if the attempt fails.

Who Can Commit Health Care Claims Fraud?

The law distinguishes between “practitioners” like doctors, nurses or dentists who directly provide health services, versus non-practitioners like billing clerks or patients.

Practitioners can be guilty if they “knowingly” or “recklessly” commit fraud in providing services. Non-practitioners can be guilty if they “knowingly” commit fraud, which requires proof they knew the statements were false.

Penalties and Fines

The penalties and fines depend on whether it was a practitioner or non-practitioner, if they acted “knowingly” or “recklessly,” and the amount of money involved.

For practitioners acting knowingly, it is a second degree crime with 5-10 years in prison. If reckless, it is a third degree crime with 3-5 years in prison.

For non-practitioners the main punishment is paying back 3-5 times the amount of money they got or tried to get. Fines range from third to fourth degree crimes.

Each fraudulent claim is a separate offense. So penalties add up fast—one doctor got 8 years in prison for thousands of false claims!

Defenses

The most common defense is that there was no intent to commit fraud. For practitioners, “reckless” fraud requires awareness of the risk. Non-practitioners must provably “know” the statements were false.

Mistakes on paperwork or billing errors don’t necessarily show intent. Poor recordkeeping alone isn’t fraud. So sloppy practices could weaken the prosecution’s case.

Other defenses argue the statements weren’t material or misleading enough to justify charges. There may be factual explanations why records contain errors. Or prosecutors may lack proof that alleged false statements led to wrongful payments.

What are the Implications?

Harsh penalties make health care fraud charges very serious. Even minor cases can end medical careers. And fraud contributes to high healthcare costs.

So hospitals and insurers are ramping up detection and reporting. New Jersey is encouraging whistleblowers and using data analysis to spot potential patterns. That means more investigations, charges and prosecutions.

For medical professionals, the risks are sky-high. Rigorous recordkeeping and billing processes are essential. Getting legal advice early is important—before careless errors turn into criminal charges.

Patients also need to review medical bills and statements carefully. If anything seems questionable, report it right away to prevent personal liability. Detecting mistakes early can protect both patients and practitioners.

Health care claims fraud laws try to balance punishing false claims versus preventing mistakes. But without thoughtful enforcement, they can go too far. Legal experts argue New Jersey’s law defines fraud too broadly in some areas. And without resources to defend themselves, doctors and hospitals often settle questionable claims to avoid bigger penalties.

As fraud prosecutions spread, lawmakers may need to revisit the law to prevent unfair impacts on both medical professionals and patients. Getting the balance right in this complex area remains an ongoing challenge.

I hope this overview helps explain New Jersey’s health care claims fraud law! Let me know if you have any other questions.