How does an investigation begin and what should a Physician or Provider do once an investigation is commenced against them?

    Typically an investigation will begin with a letter served on the suspected party which will request them to produce documents or engage in an interview with an Investigator assigned to their case.
    It is vital that upon receipt of a notice of investigation or audit that the suspected party contact an experienced attorney immediately. Going into an investigation or interview alone can prove to be quite detrimental to your case and your rights under the applicable statutes. It is important that the suspected individual does not make any contact with the investigator or department of human service until they retain a qualified attorney and is advised on how to proceed.
    It is crucial that an attorney be present at any and all interviews and meetings between the investigator, the Department of Health and Human Services, and the suspected party.

What are some actions that a Medicaid provider can do that will constitute defrauding the Medicaid Program?

    As a Physician or a Medicaid provider it is vital that you take every precaution not to commit any acts that could constitute an act of fraud or an attempt to defraud the Medicaid Program.
There are six common acts that typically result in fraud:
(1)    Billing for services not rendered – This is a clearly fraud and will likely result in criminal prosecution. Billing for services such as x-rays, medical procedures, or examinations that were never preformed is illegal and immoral.
Example: A Plainview dentist with a practice in Brooklyn has been sentenced to 1-3 years in jail after a joint state audit revealed he had engaged in a fraudulent Medicaid practices and will also have to pay some $700,000 in restitution. Attorney General Eric T. Schneiderman revealed that Bruckner’s worked with five affiliated dentists who took in nearly $7 million in Medicaid payments from 2007 to 2011, at least $2.3 million of which was likely fraudulent. The practice was based largely on the illegal recruiting of Medicaid recipients and billings for services never rendered. All six dentists, including Bruckner, shared improper claim payments from high-volume billings for services that would be impossible to properly perform. On a single day in 2010, for example, auditors found dentist Robert Thaler was paid for 119 procedures that would have taken at least 38 hours to perform properly.
(2)    Double Billing – This occurs when a provider bills both a private insurance company and Medicaid, or two separate providers for the same procedure performed on the same patient.
(3)    Substitution of generic drugs – A pharmacy bills Medicaid for the name brand drug, but a generic substitute was provided to the recipient.
Example: David Correa, 43, faces up more than a decade in prison after being charged with fraud and various violations by federal authorities Thursday. His was the latest arrest in what has become a $500 million Medicaid fraud scheme.
 “The alleged scheme enabled David Correa to defraud Medicaid and other insurance providers out of hundreds of thousands of dollars, while potentially compromising the health of very sick people in need of life-saving drugs.”
Federal authorities say that from 2010 through July 2012, the pharmacy owner bought prescription pills at heavily discounted prices from a pair of individuals in order to resell the pills at his pharmacy. The drugs treat a variety of illness, including HIV, schizophrenia and asthma.
Originally dispensed to Medicaid recipients, the pills were passed through the black market, ending up on the shelves of various pharmacies, including Correa’s Bronx shop, where they were sold as “new” drugs.
(4)    Unnecessary services – Performing numerous tests and procedures that are medically unnecessary and result in great expense to the insurer.
Example: Jose Katz a New York and New Jersey Cardiologist was found guilty of billing Medicaid, and numerous private insurers for “unnecessary tests and unnecessary procedures based on false diagnoses for medical services rendered by unlicensed practitioners.”  According to the government Katz billed Medicare, Medicaid, and private insurers more than $19 million dollars in fraudulent claims.
(5)    Kickbacks – In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime.
(6)     Upcoding – using incorrect billing codes for more severe illness than actually existed or a more expensive treatment than was provided. Another common problem with billing – billing for services that were “not medically necessary”.

How can one make sure that they comply with all the Medicaid procedures in order to ensure that they don’t end up committing fraud unintentionally?

    Resources are available online at which will detail all applicable code sections and how to ensure your business and practices comply with all New York Medicaid Regulations. However, it is very important to meet with an experienced attorney to make sure that all of your contracts with third-party providers, your internal procedures, and billing practices are in compliance with New York’s Medicaid Regulations.
    It is vital to seek the advice of an experience attorney when starting a business will be a part of the Medicaid provider network. Without this guidance, it is inevitable that you and your business will run into problems down the road.
    It is much easier to spend the time and money up front to make sure that your business stays in compliance with the Medicaid standards then having to deal with an investigation, audit, or indictment down the road.

What can happen if a Physician or Medicaid Provider is investigated, audited, or convicted of being a party in a scheme to defraud the Medicaid system?

    In the past couple years the prosecution of Medicaid fraud has grown exponentially. With the substantial growth in funding and support of the Medicaid Fraud Strike Force, the belt has been tightened and auditing and monitoring of physicians and Medicaid providers has been put under a microscope. If an investigation is initiated against you or your business this will usually result in a huge economic burden. The government will immediately stop payments from Medicaid which will make it impossible to pay your bills as they come due. It is important to seek representation immediately upon notice of an audit, investigation, or indictment. An experienced attorney can navigate the complicated and often emotional time for a person or business being investigated.
    Conviction of Medicaid fraud can result in a fine, loss of your license, or prison time.  Under the Civil Monetaries Penalty Law the Office of Inspector General of the Department of Health and Human Services is authorized to impose civil monetary penalties, assessments, and programs exclusions upon a person who is determined to have submitted or caused to be submitted a false or fraudulent claim.
    The Mediacare and Medicaid Patient Program Act significantly strengthens the authority of the Department of Health and Humans Services to exclude unfit, unscrupulous, or abusive health care practioners from participating in the Medicare and Medicaid programs.

What are some emerging Trends in Medicaid Fraud enforcement?

Home Health Care:
Medicare fraud investigations have uncovered millions of dollars in fraud in this area of service. Typically these offenders are charged with inflating the number of hours their employees work.
Home Infusion Treatments:
Home infusion treatments include more than actual medication. In addition to drugs and nutrient formulas, supplies such as tubing, syringes, alcohol swabs, bottles, gloves, needles, and expensive equipment such as pumps, nebulizers glucose monitors, and blood pressure kits are regularly utilized by the victims of these serious illnesses.
The potential for fraud in this rapidly expanding and highly expensive industry is clear. Kick backs to doctors to authorize medically unnecessary treatment, services, or supplies, whether provided or not, is cause for concern.
Ambulette Services:
Recently a large number of Ambulette Service companies have come under investigation for falsely submitting trips that were never preformed. The potential for fraud in this area is high as the industry is not closely governed and is more like a taxi service than a medical provider. Regardless, submitting claims for payment on trips that were never preformed will constitute fraud and will trigger an investigation. It is important that all Ambulette service companies be sure to accurate records of all services performed, trips provided, and payments made to drivers.
Amublette companies also need to be aware of the long-term v. short-term contracting provision within the New York Medicaid Provider Handbook. A violation of the long-term contracting provision can result in an unintentional act of fraud.

What is happening in Brooklyn no, the #1 zip code (11235) for number of Medicaid Fraud cases filed

Federal and Brooklyn prosecutors team up to tackle healthcare fraud.  Brooklyn DA announced the creation of a new Healthcare Fraud Division to crack down on doctors and pharmacists who commit Medicaid and Medicare fraud.   This division will handle cases stemming form a new collaboration between the DA’s office and US Attorney’s office for the Eastern District of  NY, US Department of Health and Human Services and  New York City’s Human Resources Administration.  They will refer cases to each other, share information and collaborate.  The first case was already filed against a Brooklyn doctor, Naveed Ahmad, who is charged with $500,000 Medicare and Medicaid fraud over 3 years period.  He is charged with submitting bills for bogus procedures and writing prescriptions for pricey HIV drugs that were resold on the black market to HIV patients.