Medicaid Fraud investigations in New York – is there a way out?

Health care coverage in New York these days costs an arm and a leg. Think you can have a break by applying for Medicaid? That may be so if you financially qualify. On the other hand, if you don’t, think twice
before applying because you may be investigated for fraud sooner than you think.
If you have applied for Medicaid in the State of New York, particularly in New York City, and misrepresented facts regarding your income and assets on your application, you may become another target of relentless and massive hunt for fraudsters. The new initiative that started a few years ago across the state has netted thousands of Medicaid recipients who had received Medicaid fraudulently. Numerous people were recently contacted by New York City Bureau of Fraud Investigation and other agencies that routinely investigate New York Medicaid fraud.
As a benefit recipient, you are obligated not only to provide truthful disclosure of your financial status when you apply for Medicaid, but also inform the program of any changes in your income. Many Medicaid fraud cases that have come to my office involved individual recipients who for this or another reason concealed their income and assets. Many had disclosed a significantly lower income than it really was and many used a fictitious address or concealed assets. Obviously, most were ineligible to receive Medicaid. Less known is that the duty to update financial eligibility information applies immediately upon the change occurs. If you are eligible to receive Medicaid but become ineligible before your next recertification, you must notify the agency or you will be committing fraud.


In many cases, the investigation is conducted and completed without your knowledge. At some point you will receive a letter from the Bureau of Fraud Investigations asking you to come to their office for an “interview” along with certain documentation. By that time the investigation is practically completed. If you receive such letter, you should seek legal advice immediately before discussing anything with investigators. If you go to the interview and voluntarily submit requested information, you may be confessing to having committed a crime and it will be used against you in case the matter is referred to the local District Attorney’s Office for criminal prosecution.


At the investigative stage of the case, the most optimal resolution is avoiding prosecution and your chances of a favorable outcome increase dramatically if you deal with the investigative agency early and in the right way, though your attorney.
While the subject may be difficult to think about, it remains a fact that most people will spend some portion of their lifetimes in an assisted care facility. The possibility also exists that individuals may run up large medical bills both before and during placement in such a facility. It is therefore important to be prepared for these events by consulting with experienced estate planning and elder law attorney about proper Medicaid planning.


Since Medicaid is a joint State and Federal program, eligibility rules determining who qualifies for Medicaid vary from state to state. To qualify for Medicaid in New York, individuals must be eligible for Supplementary Security Income (SSI) and meet income and age restrictions. New York also has a Medicaid Surplus Income Program. Under this program individuals who have incomes that are too high can qualify for Medicaid if they spend down their excess income on medical bills.


In 2005, Congress passed the Deficit Reduction Act. This Act made several changes to Medicaid law, the most notable of which were the changes to the Medicaid Transfer of Asset rules. The new law, which took effect on February 8, 2006, created a five year look-back period and established a waiting,  or penalty, period for individuals in institutional care who would otherwise be able to receive Medicaid.


Transferring money and property to trusts or other family members in order to reduce individual assets and qualify for Medicaid has long been an estate planning practice. Under the new rules this type of Medicaid planning is still possible, but due to the longer look-back period and increased penalty, it must be done farther in advance of the time one wishes to be able to qualify for Medicaid.


The difference between the look-back period and the penalty period is one of cause and effect. The look-back period is the amount of time after an individual receives or applies for Medicaid covered services during which Medicaid reviews finances. The penalty period is the amount of time you must wait to receive Medicaid after which you would otherwise have been qualified. For example, if you gave a child $50,000 two years ago, that amount would be used to calculate your penalty period.


Penalty periods are determined on a community by community rather than a state by state basis. The penalty period is calculated by dividing the value of the transferred asset by the average cost of nursing facility services. In New York City the average cost of nursing facility services for 2009 is estimated to be $9,838 per month. To return to our $50,000 transfer example, the penalty period in New York would be 50,000 divided by 9,838, or approximately 5.1 months.  In Long Island, the average cost of care is set at $10,852. In Westchester, Orange, Putnam and Rockland, it is $9,439.


Medicaid planning is an effective way to keep your assets in the possession of your family and prevent them from being spent on costly medical care. Good Medicaid planning also ensures your medical expenses will be covered when the time comes.   An estate planning lawyer can advise you on the best way to handle your Medicaid planning.
Call (718) 333-2394 the Law Office of Inna Fershteyn and Associates today to find out how you can be eligible for Medicaid in New York.

1 Reply to “Medicaid Fraud investigations in New York – is there a way out?”

  1. Previous review from client:

    Inna Fershteyn is excellent attorney. I saw several attorneys before and none of them helped. My company was supposed to repay a huge amount back to Medicaid. We were under Medicaid Fraud Investigation. Inna gave us excellent advise and helped us to stay in business.
    I would recommend her office and would come back in case I need any legal advise.

    Law Office of Inna Fershteyn
    1517 Voorhies Avenue, Suite 4 Brooklyn NY 11235

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