New York Medicaid Fraud Defense

A Medicaid fraud investigation can begin with what appears to be a routine request. A provider may receive an audit notice, a demand for records, or questions about several claims. The matter becomes more serious when investigators suspect that billing errors were intentional. Payments may be withheld, employees may be interviewed, and years of claims may be reviewed.

New York providers may face scrutiny from the Office of the Medicaid Inspector General (OMIG), the state attorney general’s Medicaid Fraud Control Unit, a managed care organization, or a federal agency. Each body has a different role. When you choose a New York Medicaid fraud defense lawyer with The Criminal Defense Firm, we can work to identify the type of inquiry, preserve records, and prevent a premature response from creating new problems.

Medicaid Fraud Is Not the Same as an Overpayment

An inaccurate claim does not automatically amount to fraud. A payment may be denied or recovered because a record is missing, a code was used incorrectly, a worker lacked a required credential, or the service failed to meet a payment rule. These issues can support an audit finding even when nobody meant to deceive Medicaid.

Fraud requires more. Under N.Y. Penal Law § 177.05, health care fraud in the fifth degree involves an intent to defraud a health plan and the knowing and willful use of materially false information or a material omission to obtain payment. The government must address both the claim and the person’s state of mind.

An isolated mistake, a software problem, or a reasonable reading of unclear guidance may support a different explanation than intentional fraud.

Why New York Providers Face Close Review

New York’s Medicaid program covered more than 7.5 million people as of December 2023. Its size generates a large volume of claims data that agencies can analyze for unusual patterns. For example, high claim volume, repeated use of a single code, or billing that differs from that of similar providers may raise questions. A pattern can justify review, but it does not prove fraud.

Recent state figures show active oversight. New York’s Medicaid Fraud Control Unit reported more than $627 million recovered through fraud investigations since 2019. OMIG conducted more than 2,500 audits and investigations in 2024, along with more than $4.5 billion in cost savings and recoveries. Those totals include several forms of program integrity work. They should not be treated as a total of proven criminal fraud losses.

Conduct That May Lead to an Investigation

Investigations may begin with billing data, an employee complaint, a patient report, a managed care referral, or information found in another case. Authorities often compare claims with medical records, staffing schedules, prescriptions, treatment plans, and provider qualifications.

Common allegations include:

• Keeping an identified overpayment.
• Changing records after learning about an audit.
• Billing for care that was not provided.
• Using a code that pays more than the service performed.
• Billing for medically unnecessary treatment.
• Using unlicensed, excluded, or unqualified workers.
• Paying for referrals or receiving improper payments.
• Billing separately for services that should have been combined.
• Submitting claims under another provider’s number.

Owners and managers can face scrutiny even when another employee entered the billing information.

New York Criminal Health Care Fraud Charges

New York Penal Law Article 177 divides health care fraud into five degrees. The basic offense is health care fraud in the fifth degree. Higher charges depend mainly on the amount wrongfully received from a single health plan within a period of no more than one year.

• Under N.Y. Penal Law § 177.10, an amount greater than $3,000 can support health care fraud in the fourth degree, a class E felony. 
• N.Y. Penal Law § 177.15 applies when the amount exceeds $10,000, thereby making the offense a class D felony.
• An amount above $50,000 may support a class C felony under N.Y. Penal Law § 177.20. 
• When the amount exceeds $1 million, N.Y. Penal Law § 177.25 makes the offense a class B felony.

A New York Medicaid fraud defense lawyer with The Criminal Defense Firm can review how the amount was calculated, whether the payments came from one health plan, and whether the claims fall within the required period. The alleged amount can change the charge and possible sentence.

Civil Claims and Repayment Exposure

A provider may face civil liability even when no criminal charge is filed. New York Social Services Law § 145-b prohibits knowingly using a false statement, concealment, or fraudulent method to obtain public payment for covered services or supplies. The statute allows the state or a local social services district to seek three times certain damages.

The New York False Claims Act may also apply. Under New York State Finance Law § 189, liability can arise from knowingly presenting a false claim, using a false record material to a claim, or knowingly avoiding an obligation to repay money to the state or a local government.

Civil matters can involve repayment, added damages, penalties, compliance duties, and limits on future program participation.

What Happens During an OMIG Audit

An OMIG audit usually begins with written notice identifying the provider, service category, and audit period. Auditors may request patient charts, billing records, employee files, licenses, training records, contracts, and policies. They may also interview clinical, billing, or compliance staff.

OMIG may review a sample of claims and project identified errors across a larger group. A few disputed records can therefore lead to a much larger repayment demand.

Providers may supply additional information, respond to preliminary findings, and object to a draft report. OMIG’s current audit materials state that written objections are generally due within 30 days after the draft report. A hearing request must generally be made within 60 days of the final report. Missing these stages can restrict what may be raised later.

How to Respond to a Records Request or Subpoena

The first response should focus on preservation and control. Paper records, electronic charts, billing files, emails, text messages, schedules, and contracts should be protected from deletion. Ordinary destruction practices may need to stop.

A provider should avoid several common mistakes:

• Editing charts without a clear, dated explanation.
• Guessing during an interview.
• Giving different answers to different agencies.
• Asking employees to coordinate their accounts.
• Sending records without reviewing them.
• Refunding money before understanding the legal effect.

An attorney can communicate with the agency, clarify the request, and create a review process before documents leave your control. That review may identify missing records, protected communications, or information outside the proper scope.

Building a Claim-By-Claim Defense

Your attorney must match each disputed claim with the medical record, order, treatment plan, staffing information, credential file, and payment history. The review should also identify the rule in effect on the date of service.

Some cases turn on whether the service happened. Others involve coding, supervision, documentation, or enrollment status. The response should address the actual reason for each challenged payment.

Intent must be examined separately. Training logs, compliance reports, internal emails, software records, and prior audits may show how the billing system worked. They may also show whether management corrected known problems or ignored warnings. A New York Medicaid fraud defense lawyer can use this evidence to challenge an unsupported claim of deliberate fraud.

Self-Disclosure and Compliance Duties

New York Social Services Law § 363-d requires certain Medicaid providers to adopt and implement an effective compliance program. It must be designed to prevent, detect, and correct noncompliance, fraud, waste, and abuse. Providers should train workers, investigate reports, track corrections, and review billing risks.

OMIG maintains a self-disclosure process for identified Medicaid overpayments. Disclosure may be appropriate when a provider has confirmed an overpayment, determined its cause, and calculated the amount with reasonable care. It should not be based on an incomplete review.

Before disclosing, legal counsel should consider whether the facts could lead to civil or criminal allegations. The provider should also determine whether another agency is already reviewing the issue. OMIG states that matters already included in an agency audit or investigation should not be submitted through its ordinary self-disclosure process.

Frequently Asked Questions

Can personal text messages become evidence?

Yes. Messages about patients, staffing, referrals, coding, or payment decisions may be requested or seized. Relevant messages should not be deleted after an inquiry begins.

Does selling the practice end Medicaid liability?

Not necessarily. A sale may not erase liability tied to earlier claims. Purchase terms, indemnity provisions, and reporting duties should be reviewed before closing.

Can one employee have separate counsel?

Yes. Separate representation may be needed when the employee’s interests differ from the organization’s interests or when each may blame the other.

Early Decisions Can Affect the Case

A records request may be part of an audit, a civil investigation, or a criminal inquiry that began months earlier. Providers should learn who issued the request, what authority is being used, and whether payment suspension or exclusion is being considered.

Our legal professionals can organize records, prepare employees for lawful interviews, communicate with the government, and review loss calculations or sampling methods.

Early involvement from a New York Medicaid fraud defense lawyer may help separate correctable billing issues from allegations of intentional misconduct. No defense can promise a particular result. However, a careful response can still protect legal options and reduce the chance that avoidable mistakes will drive the case. Please do not hesitate to use our online contact form to schedule a free case review with The Criminal Defense Firm.

Last Updated: 08-25-2026