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| | Why Does New York Love Fraud Perpetrators?
By Barry Zalma, Esq. - September 3, 2010My colleague, Larry Rojak, in New York recently, blogged that two years ago, the Court of Appeals held in Fair Price Medical v. Travelers Insurance Corp. that a medical provider which submits fraudulent billing to a no-fault insurer is entitled to be paid, even for services it never actually provided, unless the no-fault insurer discovers the fraud within 30 days of submission of the bill and issues a denial based on that fraud. In the case reported here, that principle – that no-fault fraud is basically legal in New York – is once again applied. This case stands for the principle that the no-fault insurer cannot even amend its Answer to include a counterclaim for unjust enrichment because it did not assert the fraud defense in its denials. You can read his entire post at: http://www.newyorknofaultadvisor.com/blog.php?id=63&showEntry=1
Mr. Rojak noted that the court found that "fraudulent billing is precluded as a defense unless it is raised in a timely denial. See Fair Price Med. Supply Corp., 10 NY3d at 564-565; Careplus Med. Supply, Inc., 25 Misc 3d at 49. The defense of provider fraud is precluded if not timely and properly asserted. M. G. M. Psychiatry Care, P.C. v. Utica Mut. Ins. Co., 12 Misc 3d 137(A), 824 NYS2d 763 (App. Term, 2d & 11th Jud. Dists. 2006). Fraud defense whether premised on fraudulent billing, excessive medical treatment or otherwise is subject to the preclusion sanction."
New York state has a problem. In most states the fraud statute of limitations is four years from discovery of the fraud. Here, because the victim is an insurer, the limitation period is a matter of weeks. I am, to say the least, shocked that a court would allow fraud to succeed just because it wasn't discovered immediately. No fault in New York really seems to mean that there is no fault if you cheat an insurance company because they are not protected from crimes, rather the criminal is protected.
The ruling of the New York Court of Appeals has become a co-conspirator with the insurance criminals and has placed his imprimatur upon the actions of insurance criminals. It is time for the legislature of the state of New York to change its law to protect its insurers against this fraud and allow insurers to defend themselves.
New York seems to enjoy allowing its residents to defraud insurers and Medicaid. It was reported in August that the state's Medicaid program paid out $40 million for excessive dental cleanings and examinations over five years, according to an audit from state Controller Thomas DiNapoli. One dental clinic got paid for 79 exams given to one patient over four years, according to the audit, according to a story in the New York Daily News.
Other findings included a dentist who billed taxpayers for 18 cleanings for one patient over five years and a patient who received 32 cleanings from 19 separate dentists over three years. DiNapoli's audit also found that the state paid higher rates to dentists for cleanings and examinations than most other states, costing taxpayers as much as $60 million. The audit reviewed $418 million in Medicaid dental transactions during a five-year stretch that ended last August. It did not include the names of the dentists or of the patients who received the excessive treatments.
One can only wonder how much more will be stolen when 30 million more people start receiving government funded health with doctors believing they are underpaid and entitled to steal with impunity.
Barry Zalma, Esq., CFE, is an expert witness for insurance fraud cases and the writer of a bimonthly newsletter called Zalma's Insurance Fraud Letter (ZIFL). It can be found at www.zalma.com. Barry Zalma can be reached at zalma@zalma.com. |
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