What is Medicaid and Welfare Fraud?
Programs like Medicaid, Medicare, Supplemental Nutrition Assistance Program (SNAP), and others exist to help people in need get more affordable access to necessary goods and services, or help people get back on their feet when they fall on tough times. There are all sorts of bureaucratic elements people have to go through to gain access to these benefits, which is often quite confusing and challenging for the people who need them most. Sometimes the government pursues people who they believe to be abusing these benefits by attempting to gain some they should not be entitled to. Additionally, people providing services to people who have these benefits have to abide by certain regulations, which can also be quite detailed and confusing. With how complicated these programs can get, it is totally possible for innocent people to get caught up in an investigation. If you are facing an investigation or charges for medicaid or welfare fraud, try to reach out to an experienced attorney.
While it’s understandable that most people in need of Welfare will not have the money to pay a more experienced lawyer, it is in your best interest to reach out to some and get a better idea of what you are facing and try to discuss payment options for a private lawyer with more time to devote to get better results on your case. If you are a provider facing such charges, hiring an experienced attorney is essential to protecting your rights and privilege to continue your practice.
North Carolina has statutes for three key areas of welfare: Medicare, general welfare fraud, and Electronic Food and Nutrition Benefits Transfer (EBT) Fraud.
In North Carolina, most medicaid-related crimes focus on providers abusing the benefits system to gain something of value, whether it be payment for services through the program, program eligibility, or something else. There are several ways a person can be guilty of medicaid fraud, as outlined below:
Fraudulent Application by a Provider
A provider under Medicaid is guilty of this offense when they willfully and knowingly make a false statement in either:
- An application for payment or for use in determining entitlement of payment, or
- With respect to the conditions or operation of a provider or facility so that they may qualify or remain qualified to provide assistance under the program.
This crime is punished as a class I felony.
Concealment of a Fact Affecting a Provider's Eligibility
A provider under Medicaid is guilty of this offense when they willfully and knowingly conceal or fail to disclose a fact or event that affects:
- Their initial or continued entitlement to payment, or
- The amount of payment to which they may be entitled to.
This crime is punished as a class I felony.
Fraud by Medical Assistance Provider
A provider under Medicaid is guilty of this offense when they knowingly and willfully execute or attempt to execute a scheme to:
- Defraud the Program, or
- Obtain, by means of false pretenses, any of the money or property owned by or under the custody or control of the Program
- In connection with the delivery of or payment for benefits, items, or services under the program.
This crime is punished as a class H felony.
Obstructing Investigation by Medical Assistance Provider
A provider under Medicaid is guilty of this offense when they knowingly, willfully, and with intent to obstruct:
- make or cause to be made a false entry in,
- alters, destroys or conceals, or
- make a false statement about
- a financial, medical, or other record related to the provision of a benefit, item, or service under the program.
The punishment for this crime is a Class I felony.
Using an Illicit Card
The second way to be guilty of a financial transaction card crime in North Carolina is through the use of an illegal card. A person is guilty of this crime when they do the following:
- Use a financial transaction card that was either obtained with knowledge that it was forged, or otherwise know it was forged or obtained via a fraudulent application.
- with the intent to defraud and for the purpose of obtaining money, goods, services, or anything else of value.
If the value of all things received through use of the card does not exceed $500 in any 6-month period, this crime is punished as a class 2 misdemeanor. If the value exceeds $500 in any 6-month period, this crime is punished as a Class I felony.
Soliciting, Receiving, Offering, or Paying Kickbacks
Unlike the above crimes, this one is not specific to providers. A person is guilty of this offense when they knowingly and willfully:
- Solicit, receive, offer or pay money in exchange for services to:
- Refer an individual to a person for arranging payments to be made under Medicaid, or
- Purchasing, leasing, or ordering any good, facility, or service for which payment may be made under the program.
This crime is punished as a Class I felony.
While Medicare fraud has many detailed subsections in North Carolina’s statute, Welfare fraud is much more broad and relatively simpler. A person is guilty of Welfare fraud when they:
- Are a provider or recipient of public assistance, or representing themselves as such, and
- willfully and knowingly, with the intent to deceive,
- make a false statement or representation, or fail to disclose a material fact, and
- as a result of such, obtain or attempt to obtain or continue to receive public assistance for themself or others.
If the public assistance wrongfully obtained does not exceed $400, this crime is punished as a Class 1 misdemeanor. If the value exceeds $400, the crime is punished as a Class I felony.
Electronic Food and Nutrition Benefits Fraud
EBT fraud is a bit more complex, as it covers fraud in applications, items obtained, and other illegal activity that involves the use of such benefits. EBT has a great deal of regulations on what it can and cannot be used for. The most simple way to be guilty of EBT fraud is when a person knowingly uses EBT benefits in any manner not authorized by the program.
Punishment for this general EBT crime is based on the value of benefits accessed illegally. If the value is less than $100, the crime is punished as a Class 1 misdemeanor. For a value between $100 and $500, the crime is punished as a Class A1 misdemeanor. If the value is greater than $500 but less than $1,000, the crime is punished as a Class I felony. Finally, a value greater or equal to $1,000 is punished as a Class H felony.
In addition to the general crime above, there are two other specific ways to commit this crime:
Fraudulent Obtaining or Transferring of EBT Benefits
A person is guilty of this offense if they are a provider or recipient of such benefits and knowingly:
- Obtain such benefits, attempts to obtain, or aids and abets any person to obtain by means of making a willfully false statements, by impersonation, by failing to disclose material facts, or by acting in a manner not authorized by the program, or
- transfers with the intent to defraud, for which the person is not entitled to benefits.
If the benefits wrongfully obtained does not exceed $400, this crime is punished as a Class 1 misdemeanor. If the value exceeds $400, the crime is punished as a Class I felony.
Ilegally Buying, Selling, Distributing, or Possessing with Intent to Distribute Electronic Food and Nutrition Benefits
A person is guilty of this offense when they knowingly:
- Buy, sell, distribute, or possess with intent to sell or distribute,
- electronic food and nutrition benefits or access devices,
- in any manner not authorized by the program.
This crime, for example, covers items bought from EBT benefits to be resold for money, such as laundry detergent and baby formula schemes. This crime is punished as a Class H felony, regardless of value of items distributed or bought.