When a practitioner faces a criminal charge related to health care fraud, it is important to keep in mind not only the potential direct consequences of a conviction – term of imprisonment, fines, restitution, probation, etc., it is also important to be aware of collateral and administrative consequences that will, or may, flow from a criminal conviction. Often times in a criminal case the most important decision any defendant will have to make is whether to accept a plea offer made by the prosecutor, or proceed to defend oneself in trial. Knowing the indirect consequences to a physician – such as impact on licensure and credentialing – that may result from a conviction is imperative in making that decision.
In regard to New Jersey’s Health Care Claims Fraud Statute, found at N.J.S.A. 2C:21-3, there are two degrees of crime listed: the most serious is a second degree crime for violating the statute “knowingly”, and the other is a third degree crime for violating the statute “recklessly”. In conjunction with a separate statute entitled License Suspension or Forfeiture for Health Care Claims Fraud, found at N.J.S.A. 2C:51-5, the second degree crime (knowing violation) would result in a mandatory lifetime forfeiture of a physician’s medical license to be imposed by the court, unless the court finds that such license forfeiture would be a serious injustice which overrides the need to deter such conduct. As one would expect from the wording, this exception (serious injustice) would be difficult to establish. The third degree crime (reckless violation) would result in court-imposed loss of license for “at least one year”. As the language suggests, the loss of license could be more than one year. A second or subsequent conviction of the third degree crime would result in a lifetime ban.
The New Jersey Board of Medical Examiners (the Board) must be notified of any health care claims fraud conviction within 10 days of sentence. N.J.S.A.2C:51-5b. Under the New Jersey Licensed Professionals Uniform Enforcement Act, N.J.S.A. 45:1-1, et seq., administrative action can be taken against a practitioner for a violation of New Jersey statutes pertaining to the practitioner’s licensed profession and also for violations of the regulations of the licensing board or agency. A health care related insurance fraud conviction could constitute summary proof of a violation of several sections of the statute that allows for a suspension or revocation of a physician’s license for proscribed conduct, N.J.S.A. 45:1-21, such as subsections: (b) fraud, (e) professional misconduct, (f) crime of moral turpitude or crime relating adversely to activity regulated by the licensing board, (h) violation of regulation administered by the licensing board, and (k) violation of any insurance fraud prevention law. Any of these violations could not only constitute grounds for the Board to revoke or suspend a practitioner’s license, they could also result in the imposition of alternative administrative penalties found in N.J.S.A. 45:1-22, including but not limited to civil penalties, restitution and payment of the Enforcement Bureau’s costs attributed to the licensing investigation and enforcement procedure. Of course, it bears remembering that even if there is no criminal conviction to form the basis of a Board action, the Board only need prove misconduct by a preponderance of the evidence, thus making it possible to impose professional discipline on a licensee for the same conduct under the same set of circumstances, and using the same evidentiary predicates as a prosecutor would use in a criminal case.
Disciplinary action will almost always be taken against a practitioner once the Board is notified or otherwise learns of a criminal conviction of the practitioner, particularly when the conviction is directly related to the practitioner’s profession. In this regard it is important to note that licensing a