Suppose a medical clinic employs "runners" to locate automobile accident victims and take them back to the clinic. Then, suppose a physician at the clinic purports to treat accident victims at the clinic in order to submit fraudulent claims to the victims' no-fault insurance carriers. Considering that the insurance claims were submitted by a third party (the physician) to the insurance company, are these forms "business records" for the purposes of Falsifying Business Records 1º? Yesterday, the Court of Appeals unanimously answered "yes" in an opinion authored by Judge Ciparick in People v. Kisina (Ct. App., 2/18/2010) (7-0).
In 2003, Attorney General Eliot Spitzer investigated IK Medical P.C., a medical clinic in Queens, for insurance fraud "and other related crimes." The AG's office alleged that the clinic had engaged in a scheme, similar to the one articulated at the beginning of the post, to access the $50,000 policies of each of the victims. Subsequently, the AG obtained an indictment against the defendant for Engaging in a Scheme to Defraud 1º, Insurance Fraud 3º, and Falsifying Business Records 1º.
Before trial, the People and the defendant stipulated that the forms the defendant submitted to the insurance carrier were "intended to evidence [the carrier's] 'obligation to pay the attending physician or other provider of health service[.]'" Additionally, the parties stipulated that these forms became part of the insurance carrier's "permanent business records." At trial, the People "offered evidence of a pattern of fraud by the clinic" in which the defendant was allegedly involved. This evidence included testimony that the defendant performed far fewer procedures than she claimed in the insurance forms at issue. Subsequently, a jury found the defendant guilty of Insurance Fraud 3º and Falsifying Business Records 1º.
On appeal, the Court of Appeals addressed the defendant's argument that the disputed insurance claim forms were not "'business records' because they d[id] not reflect the 'condition' or 'activity' of the recipient enterprise[.]" Rather, the argument went, the forms "falsely evidence[d the defendant's] activities and the condition of her patients." Applying a plain meaning analysis of the statute, the Court noted that "[a] 'business record' is 'any writing or article . . . kept or maintained by an enterprise for the purpose of evidencing or reflecting its condition or activity'." The Court also applied precedent that "rejected the 'insider/outsider distinction' for the purpose of defining a false business record." Thus, the Court reasoned that "'outsiders' or 'third parties' not employed by . . . the recipient enterprise [were not] immune from prosecution under th[e] statute."
Interestingly, the Court also addressed a case, People v. Papatonis, 243 A.D.2d 898 (3d Dept. 2009), cited by the defendant to support her insider/outsider distinction. In Papatonis, the Third Department "held that misrepresentations on an employment application, wherein the defendant falsely denied having been convicted of a crime, did not fall within the ambit of the statute." The Court of Appeals rather unconvincingly distinguished Papatonis, reasoning the records in that case "did not, as here, relate to any rights or obligations on the part of the recipient agency" (apparently, the employment application did not relate to the agency's right to employ the applicant or to the agency's obligation to compensate the applicant for services rendered). (JTR/LC)
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