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NY business owners: 3 lessons from recent fraud case

On Behalf of | Nov 22, 2021 | Health Care Investigations |

Any New York business that bills Medicare, Medicaid or another federal provider for services is wise to understand the basics when it comes to allegations of fraud. One way to understand how the feds pursue these allegations is to review a case. In a recent example, the United States Department of Justice (DOJ) pursued a case against a New York business owner who allegedly received millions from the government in fraudulent claims to Medicaid. The DOJ states a 56-year-old owner and operator of a transportation company would file claims for services that were never performed or fraudulent.

What type of transportation was involved?

The business, Quality Service Medical Transportation, provided transportation services to patients who needed to get to medical care appointments. Medicaid will fund these services if public transportation options are either unsafe or unavailable. The patient’s health care professional or the patient themselves schedules the transportation and the transportation provider then files a claim for payment with Medicaid.

In this case, the government argues that the transportation provider did not actually provide the services. Instead, they argue that the company billed and received payment for over 120,000 services with “many” that were not given. The press release does not provide an exact number or percentage of rides they believe were fraudulent, but the case involves over $7 million in Medicaid claims spanning from 2017 through 2020. The prosecution claims many of the patients who allegedly received rides state that they never even heard of the company.

What are the penalties for these types of allegations?

In this case, those involved with the transportation company face allegations of theft of government funds, health care fraud, conspiracy to commit health care fraud, identity theft, and Stark Law violations. Identity theft comes with a two-year prison sentence, the others each come with up to ten years imprisonment. Restitution payments are also likely.

What should my business learn from this case?

First, the case serves as a reminder to keep clear and organized records of services. Patients who receive these services may not recall the name of the company that provided them, and this could prove to be an issue during an investigation.

Second, that allegations of fraud are serious and come with harsh penalties. In addition to monetary penalties, the government could attempt to hold individuals accountable for criminal wrongdoing, which could lead to imprisonment.

Finally, that business owners do not need to go through this on their own. Business owners can conduct audits to make sure they are following applicable regulations and can seek legal counsel if investigated for alleged wrongdoing.

Attorney John Rivas is responsible for this communication.

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