Ignoring an Administrative Order is Expensive: 1011 Fake Claims Results in more than $500,000 Penalty.

AuthorZalma, Barry
Position[ON MY RADAR]

When a chiropractor is caught billing insurers for services not performed he should never fail to appear to defend himself at an administrative hearing. Of course, if he or she has no defense delay is possible but dangerous.

In The Matter Of Proceedings By The Commissioner Of Banking And Insurance, State Of New Jersey To Fine Charles Boas Pursuant To The New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -30, Docket No. A-2223-17T2, Superior Court of New Jersey Appellate Division (February 22, 2019) Charles Boas appealed from New Jersey Department of Banking and Insurance (Department) orders directing that he pay $500,000 in civil and administrative penalties for his submission of 1011 fraudulent insurance claims, a $1000 statutory insurance fraud surcharge, $53,384.52 in restitution and $3459 in attorneys' fees, and denying his motion for reconsideration.

Boas is a licensed chiropractor in the State of New Jersey. In April 2014, Boas pleaded guilty to third-degree health care claims fraud and was sentenced in July 2014 to a two-year term of probation.

The Order To Show Cause

The order to show cause alleged that from 2003 to 2007 Boas submitted claims for insurance payments to Horizon for chiropractic services he did not provide.

The Department served, and Boas received, the order to show cause in September 2014. The Department again served Boas with the order to show cause in December 2014, and at that time informed Boas that if he did not respond within seven days, his right to a hearing would be deemed waived and the Commissioner would dispose of the matter.

Boas failed to respond to the order to show cause.

Boas's Motion to Vacate the Final Order

Four months later, in March 2016, Boas filed a motion to vacate the final order. In support of the motion, Boas submitted a certification asserting that upon his receipt of the order to show cause on September 26, 2014, he called the attorney who represented him in the criminal proceeding, forwarded the order to show cause to the attorney by telefax, and was assured by the attorney that he "would handle the matter." Boas also certified that he received the December 2014 "second notice" concerning the order to show cause and forwarded it by telefax to the attorney.

Boas's certification offered the conclusory assertion that he "had a clear defense to this case." He did not identify the putative defense or provide any facts supporting a defense to the allegations contained in the...

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