Medicaid Fraud Lawyer in New York | Law Offices of Albert Goodwin

Medicaid fraud cases are pursued by the Medicaid Fraud Control Unit (MFCU) of the Office of the Attorney General, the Office of the Medicaid Inspector General (OMIG), HRA, and federal prosecutors when the conduct touches the federal share. Recipients and providers face different but parallel exposure.

Recipient Fraud

The typical recipient case alleges that the applicant failed to disclose income, assets, household composition, or a parent's whereabouts when applying for Medicaid. Charges are usually brought as welfare fraud under Penal Law Article 158 and as offering a false instrument for filing under PL §§ 175.30 or 175.35. The administrative side runs in parallel: overpayment recoveries, fair-hearing rights, and disqualification.

Provider Fraud

Provider cases against doctors, dentists, home health agencies, pharmacies, durable-medical-equipment suppliers, and behavioral-health providers are larger and more document-intensive. The MFCU subpoena typically demands billing records, patient charts, and personnel files. Issues include:

Upcoding and unbundling under CPT-coding rules
Phantom services and rendered-by mismatches
Kickbacks under the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b
Stark Law self-referral issues, 42 U.S.C. § 1395nn
Excluded-provider issues under 42 U.S.C. § 1320a-7
False Claims Act exposure (civil) under 31 U.S.C. § 3729

Home-Care Aides and CDPAP

The Consumer Directed Personal Assistance Program (CDPAP) has produced its own wave of Medicaid-fraud prosecutions, with aides accused of submitting timesheets for hours not worked. We defend aides and consumers in these cases by attacking timekeeping records and the procedures used by the fiscal intermediaries.

Settlement and Negotiation

Many provider Medicaid cases resolve through civil settlements, corporate integrity agreements, and exclusion negotiations rather than indictments. Early lawyering preserves those options.

Penal Law Article 177 in Detail

New York charges Medicaid fraud as a discrete crime under Penal Law Article 177. The grading is tiered by the dollar value of the fraudulent claim or claims aggregated under the scheme:

PL § 177.05 — health care fraud in the fifth degree, a class A misdemeanor; any amount.
PL § 177.10 — health care fraud in the fourth degree, a class E felony; over $3,000 in a single year.
PL § 177.15 — health care fraud in the third degree, a class D felony; over $10,000 in a single year.
PL § 177.20 — health care fraud in the second degree, a class C felony; over $50,000 in a single year.
PL § 177.25 — health care fraud in the first degree, a class B felony; over $1,000,000 in a single year.

The Article 177 counts almost never travel alone. Indictments routinely add grand larceny under PL Article 155, offering a false instrument for filing in the first degree under PL § 175.35, falsifying business records in the first degree under PL § 175.10, scheme to defraud in the first degree under PL § 190.65, and the appropriate identity-theft counts under PL §§ 190.78–190.80 where beneficiary identifiers were used. The MFCU often pairs the state indictment with parallel civil False Claims Act exposure under New York State Finance Law § 187 et seq., which authorizes treble damages and per-claim penalties.

How an MFCU Investigation Unfolds

The Medicaid Fraud Control Unit, which sits inside the Office of the New York Attorney General, runs both criminal and civil tracks out of the same case file. A typical investigation begins with one of three triggers: an OMIG audit referral, a complaint from a former employee or competitor (often a qui tam relator), or a data-analytics flag on billing outliers. From there the MFCU issues subpoenas under Executive Law § 63(8) demanding patient charts, billing records, time sheets, and personnel files.

Subject interviews. Agents often interview employees at home in the early morning. Whether and how to refuse, lawyer up, or proffer is decided in the first hours.
Search warrants. Practices, agencies, and pharmacies can lose their charts, servers, and bank records in a single morning. Pre-warrant lawyering is the difference between continuing to operate and shuttering.
Cooperation pitches. The MFCU regularly seeks cooperation from rank-and-file employees against owners and managers. Identifying who the government has flipped is half the defense.
Grand jury. Most felony Medicaid-fraud cases are presented to a New York County, Kings County, or Albany County grand jury, depending on venue. CPL Article 190 procedures — and the right to testify on notice — matter.

Federal Overlay

When the scheme is large enough or touches the federal share aggressively enough, the United States Attorney's Office picks up the case. Federal charges typically include health care fraud under 18 U.S.C. § 1347, conspiracy under 18 U.S.C. § 1349, kickbacks under the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), Stark Law violations under 42 U.S.C. § 1395nn (as predicates for False Claims Act liability), wire fraud under 18 U.S.C. § 1343, money laundering under 18 U.S.C. §§ 1956 and 1957, and aggravated identity theft under 18 U.S.C. § 1028A where beneficiary numbers are used. The civil False Claims Act, 31 U.S.C. §§ 3729–3733, runs alongside — often filed first under seal by a qui tam relator.

Qui Tam Origins

A meaningful share of provider Medicaid-fraud cases originates with a former employee filing a sealed qui tam complaint under 31 U.S.C. § 3730(b) or under State Finance Law § 190. The complaint sits under seal while the government investigates — sometimes for years — and the provider only learns of the relator when the government intervenes or declines. Identifying the relator's narrative and the weakest documents in the records they took on the way out is central to early defense work.

OMIG Audits and Self-Disclosure

OMIG runs the civil audit side of the New York Medicaid program. A typical OMIG audit opens with a records request, moves through an exit conference and draft audit report, and produces a final audit report with a stated overpayment figure. The provider has appeal rights under 18 NYCRR Part 519 and can challenge the audit in an administrative hearing before the Department of Health. The OMIG Self-Disclosure Program, modeled loosely on the federal OIG protocol, allows providers to come forward with identified overpayments at reduced exposure. Whether and when to self-disclose is one of the most consequential early decisions in a Medicaid case — done wrong, it hands the government a roadmap to a criminal referral.

Common Defenses

Specific intent is the constant battleground. Article 177 and 18 U.S.C. § 1347 both require an intent to defraud — not mere negligence, not bad recordkeeping, not delegated compliance failures. Good-faith reliance on outside billers, coding consultants, and compliance officers negates intent. Where a regulation is genuinely ambiguous, the government cannot manufacture criminal liability out of a contested interpretation; United States v. Whiteside and similar authority remain useful.

On the audit-driven cases, sampling and extrapolation are vulnerable to attack. The Medicare and Medicaid program integrity manuals impose specific requirements on statistical sampling; non-compliance is grounds to throw out the extrapolated number entirely. On the CDPAP and home-care cases, electronic visit verification (EVV) data, payer-side records, and the consumer's own testimony often contradict the timesheets the prosecution relies on. On the kickback cases, the AKS safe harbors at 42 C.F.R. § 1001.952 and the Stark exceptions at 42 C.F.R. §§ 411.355–411.357 are affirmative defenses we develop early.

Pretrial Motion Practice

State Medicaid-fraud indictments are attacked through CPL Article 210 motions to dismiss — legal insufficiency under CPL § 210.20(1)(b), defective grand jury proceeding under CPL § 210.35, and inspection of the grand jury minutes under CPL § 210.30. We challenge the legal sufficiency of Article 177 counts where the dollar tier cannot be supported by competent evidence in the minutes. On the federal side, Rule 12(b)(3) motions to dismiss, Rule 7(f) bills of particulars, and Rule 14 severance motions do similar work. Suppression of overbroad MFCU subpoena returns and of search-warrant sweeps is litigated under both state and federal standards.

Sentencing, Restitution, and Exclusion

State sentencing on Article 177 felonies follows the Penal Law and CPL Article 70, with the B-felony top end (PL § 177.25) carrying up to 25 years. Federal sentencing runs through U.S.S.G. § 2B1.1, with loss as the central driver. Mandatory restitution applies on both sides — New York under CPL § 60.27 and federal under the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A — with Medicaid and Medicare as named victims. Forfeiture under 18 U.S.C. §§ 981 and 982 reaches operating accounts and real property; substitute assets are available under 21 U.S.C. § 853(p).

The exclusion track is often the most lasting consequence. Conviction triggers mandatory federal-program exclusion under 42 U.S.C. § 1320a-7(a), published on the OIG List of Excluded Individuals/Entities and the SAM list, with parallel state exclusion by OMIG. Exclusion effectively ends federal-program practice and reaches even employment in a billing or administrative role at any provider that bills Medicare or Medicaid. We negotiate exclusion length and scope alongside the criminal disposition.

Collateral Consequences

Beyond exclusion, Medicaid-fraud convictions produce OPMC, OPD, Board of Pharmacy, and Department of Health licensing proceedings. DEA registration is at risk in any case touching controlled substances. Immigration consequences are severe: a fraud offense involving loss greater than $10,000 is an aggravated felony under 8 U.S.C. § 1101(a)(43)(M), and a controlled-substance count is independently removable under 8 U.S.C. § 1227(a)(2)(B). Plea structure controls those outcomes — the offense of conviction, loss stipulation, and restitution figure have to be drafted with the immigration analysis in mind.

If you are being investigated for Medicaid fraud as a recipient, provider, or employee, call us at 212-233-1233 or email [email protected].