New York Law Review

Tag: Healthcare Fraud

  • People v. Khan, 20 N.Y.3d 536 (2013): Sufficiency of Evidence for Healthcare Fraud Conviction

    People v. Khan, 20 N.Y.3d 536 (2013)

    For a conviction of healthcare fraud, the prosecution must prove that the defendant knowingly and willfully provided materially false information to a healthcare plan to receive unauthorized payments.

    Summary

    The New York Court of Appeals affirmed the defendant’s conviction for healthcare fraud and grand larceny, holding that sufficient evidence existed for a rational jury to conclude that the defendant knowingly and willfully provided materially false information to Medicaid. The case involved an undercover investigation where the defendant, a pharmacist, dispensed pills different from those prescribed and billed Medicaid for the prescribed medications. The Court clarified the standard of proof required for convictions under New York’s health care fraud statute and emphasized the importance of considering the totality of the circumstances in evaluating the sufficiency of evidence.

    Facts

    An undercover officer visited NYC Pharmacy multiple times, posing as a customer. During some visits, the officer requested specific prescription drugs without a valid prescription, and the defendant provided the drugs in exchange for cash. During other visits, the officer presented prescriptions and a Medicaid card under a fictitious name, Ivonne Arroyo, and requested different drugs than those prescribed; the defendant provided the requested drugs and billed Medicaid for the prescribed medications. The pills dispensed were never subjected to lab analysis. Medicaid records showed that NYC Pharmacy billed Medicaid for the prescriptions associated with the fictitious patient, Ivonne Arroyo, and received payments totaling over $3,000.

    Procedural History

    The defendant was charged with healthcare fraud, grand larceny, and criminal diversion of prescription medications. The trial court dismissed the criminal diversion counts but upheld the convictions for healthcare fraud and grand larceny. The Appellate Division affirmed the judgment. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the evidence presented at trial was legally sufficient to support the defendant’s convictions for health care fraud in the fourth degree and grand larceny in the third degree.

    Holding

    Yes, because, viewing the evidence in the light most favorable to the prosecution, a rational jury could have found the essential elements of the crimes beyond a reasonable doubt.

    Court’s Reasoning

    The Court of Appeals reasoned that to establish healthcare fraud in the fourth degree, the prosecution must prove that the defendant, with intent to defraud a health care plan, knowingly and willfully provided materially false information for the purpose of requesting payment from a health plan for a health care item or service, resulting in the defendant or another person receiving payment to which they were not entitled, and that the payment wrongfully received from a single health plan exceeded $3,000 in the aggregate. The Court determined that the jury could reasonably infer that the pills dispensed were not the prescribed medication. The Court emphasized that the jury could consider “the whole course of dealing, in which defendant consistently gave Gomez what Gomez asked for, rather than what was prescribed” in evaluating whether the defendant knowingly provided false information to Medicaid. The Court also rejected the defendant’s speedy trial argument.

    The Court cited Jackson v. Virginia, 443 U.S. 307, 319 (1979), stating that their role is limited to determining whether “after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.”

    The court noted that in this case the People presented sufficient evidence for a jury to conclude that the pills dispensed to Gomez were different from the drugs listed on the prescriptions presented to defendant on February 28, 2008 and April 2, 2008, and that defendant knowingly and willfully provided materially false information to Medicaid.

  • People v. Boothe, 16 N.Y.3d 195 (2011): Statutory Interpretation and the Limits of Judicial Power

    People v. Boothe, 16 N.Y.3d 195 (2011)

    Courts cannot expand the scope of criminal statutes beyond their plain meaning through statutory interpretation; any correction of legislative omissions must be done through legislative action.

    Summary

    Boothe, the COO of a healthcare provider, was indicted for insurance fraud for submitting false marketing plans to Medicaid. The indictment alleged he committed a “fraudulent insurance act.” However, the Penal Law defined “fraudulent insurance act” narrowly, excluding healthcare-related fraud, although a separate provision defined “fraudulent health care insurance act.” The Court of Appeals affirmed the dismissal of the indictment, holding that the legislature’s failure to include “fraudulent health care insurance act” in the substantive offense provisions could not be remedied by judicial interpretation. The Court emphasized that it cannot legislate under the guise of interpretation and that any correction requires legislative action.

    Facts

    Boothe, as the chief operating officer and executive vice-president of a managed health care provider, was indicted on charges of insurance fraud. The indictment stemmed from his submission of marketing plans to Medicaid in 2003. The prosecution alleged that these plans contained materially false information, constituting a “fraudulent insurance act.” The relevant statute defined “fraudulent insurance act” but did not explicitly include fraudulent acts related to healthcare.

    Procedural History

    Defendant moved to dismiss the insurance fraud counts, arguing that he did not commit a “fraudulent insurance act” as defined by the Penal Law. Supreme Court granted the motion to dismiss. The Appellate Division affirmed. The People appealed to the Court of Appeals. The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether a “fraudulent health care insurance act,” as defined in Penal Law § 176.05(2), can be prosecuted under Penal Law §§ 176.10 through 176.35, which require the commission of a “fraudulent insurance act,” when the legislature failed to include “fraudulent health care insurance act” within the definition of “fraudulent insurance act”.

    Holding

    No, because the Legislature plainly failed to criminalize the conduct at issue, and this statutory infirmity cannot be remedied through statutory interpretation.

    Court’s Reasoning

    The Court of Appeals rejected the People’s argument that a “fraudulent health care insurance act” is a “species” of “fraudulent insurance act.” It emphasized that the statutory definition of “fraudulent insurance act” is limited to defined commercial and personal insurance, which did not encompass the marketing plans submitted by the defendant. The Court stated, “that courts are not to legislate under the guise of interpretation” (People v Finnegan, 85 NY2d 53, 58 [1995], cert denied 516 US 919 [1995], citing People v Heine, 9 NY2d 925, 929 [1961]). The Court highlighted the Legislature’s failure to amend the substantive offense provisions to include a “fraudulent health care insurance act,” despite amending the definition section. It noted that the Judicial Conference of the State of New York had proposed legislative action to correct this oversight, but no such action had been taken. The Court deferred to the Legislature to correct any deficiencies, stating that “the Legislature is better equipped to correct any deficiencies that might exist (see Bright Homes v Wright, 8 NY2d 157, 162 [1960]).” Because the Legislature had not acted to include “fraudulent health care insurance act” within the definition of “fraudulent insurance act,” the defendant could not be found to have violated Penal Law § 176.30.