New York Criminal Lawyers with our firm represent healthcare professionals and other individuals accused of No-Fault Insurance Fraud in state and federal courts. Our clients include physicians, physician assistants, physical therapists, attorneys, and others. We have years of experience defending white-collar criminal cases, especially those involving healthcare and insurance fraud.
First, let’s understand what New York No-fault law is. In New York, every car registered in the state must have “no-fault car insurance”. This allows the driver and all passengers of the car to collect up to $50,000 in benefits per each person in case of an accident-related injury no matter whose fault the accident was (hence the name No-Fault). To simplify and speed up the way claimants get reimbursed for Medicaid treatment, the No-fault law doesn’t require that the injured parties sue to recover the payments. Instead, the patients can authorize the insurance company to reimburse healthcare providers involved in their treatment directly through an assignment. Basically, once the reimbursement is assigned, the healthcare providers can bill the insurance companies directly for all the medical treatment they provided to the patients. If the patient wants to receive additional damages, separate from the $50,000 allowed by the No-Fault Law, the patient can file a lawsuit to demonstrate that he or she suffered serious injuries as a result of the accident.
No-Fault fraud occurs when medical service provides such as medical clinics, physical therapists, rehab centers, etc. operate as a billing mill that bill car insurance companies under the No-Fault Law for medical treatments that were either never provided or were medically unnecessary.
One issue that commonly occurs in No-Fault Fraud cases is who owns and controls the medical practice that provides the service. In New York, the law requires that all healthcare business entities including medical clinics must be incorporated, owned, operated, and controlled by a licensed medical practitioner. If a clinic is owned, controlled, or operated by someone who is not a licensed medical practitioner, the clinic is ineligible for reimbursement and insurance companies will not pay its bills for any of the services it provided.
In a common scheme, a non-licensed individual who is the real business operator, will pay a fee or salary to doctors, physical therapists, or other licensed medical professionals so that they would incorporate a professional corporation, open up a bank account, sign the lease for clinic, sign the bills for treatments under the No-Fault Law； and write prescriptions and referrals for additional treatments and medical supplies to other fraudulent medical clinics. These prescriptions are often unnecessary and the referrals are done for kickbacks, all of which is illegal.
One way the prosecutors can establish who is the real owner of the clinic is by examining how the clinic was started; who invested the initial funds; who negotiated the rent; who purchased the medical equipment; who brought the patients, and who received the proceeds from the clinics.
Virtually every no-fault fraud criminal case we handled involved illegal kickbacks. In general terms, an illegal kickback means paying for referrals of patients whose treatment is covered by a government-run insurance company. In an average no-fault setting, the individual who operates the clinic refers patients to other providers to receive excessive and unnecessary medical treatments. These providers are called the modality clinics. The modality clinics usually include acupuncturists, chiropractors, physical therapists, MRI labs, pain management, orthopedics, durable medical equipment, and others. These providers bill the insurance companies under the No-Fault law and pay a certain percentage to the referring clinic (kickback).
Another common issue is the way clinics arrange for patients to come. In most kickback schemes clinic owners employ the runners. The runners are people who recruit patients to the clinics. In return, they are paid for each patient referral. Runners can work with personal injury attorneys, hospital employees, and others. They can even instruct the patients about faking certain injuries to qualify for treatment.
In some cases, personal injury lawyers paid kickbacks to clinics for patient referrals so that they can file lawsuits for them.
Many no-fault fraud cases in New York are prosecuted in federal courts. The US Attorney’s Office is likely to use several criminal charges including healthcare fraud conspiracy, RICO, and money laundering. In these cases, money laundering occurs when owners reinvest some of the proceeds of scheme back into the business, usually by paying fees and salaries to modality providers and doctors who participate in the scheme. The modality providers pay a portion of the kickback money to the clinic owner by “rent” payments for the use of space at clinic. This process may be considered money laundering.
No-fault fraud is a serious crime that can result in prison sentences, severe fines, and lost of medical and other professional license. A healthcare provider convicted of no-fault fraud may also be excluded from participating in Medicaid and Medicare, essentially ending their professional career.
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