False Claims Act
The False Claims Act (“Act”) (source: 31 U.S.C. sec. 3729, et. seq.) is a federal law that covers fraud involving any federally funded contract or program, including Medicare and Medicaid. The Act prohibits any person from knowingly submitting or conspiring to submit false or fraudulent claims for payment or approval.
Health care providers can be prosecuted for a wide variety of conduct that leads to the submission of a fraudulent claim, such as falsifying records, double-billing for items or services, submitting bills for services never performed or items never furnished, or knowingly or with deliberate disregard upcoding (the practice of billing for a more highly reimbursed service or product than the one provided).
The Fraud Enforcement and Recovery Act of 2009 (Public Law 111-21), or FERA, contains the first significant expansions to the federal civil False Claims Act affecting hospitals and health care providers that receive funds from the federal government directly or as part of downstream payment in a federal program. The definition of a “claim” in the False Claims Act now includes requests for funds to a contractor, grantee of other recipient. The claim is no longer just to the government but also to anyone that receives funds from the government that is expected to be “spent or used on the Government’s behalf or to advance a Government program or interest.” A person is now liable if she/he knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the Government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government.
Health care providers and suppliers who violate the Act are liable for civil penalties ranging from $5,500 to $11,000 for each false claim, plus up to three times the amount of damages sustained by the U.S. government. The provider or supplier may also be excluded from participation in federal health care programs.
Qui Tam Provisions:
This Act allows any individual with actual knowledge of the alleged false claims to file a lawsuit on behalf of the U.S. Government. To qualify as whistleblower under these provisions, an individual must have direct and independent knowledge of the information on which the allegations are based and must voluntarily provide the information to the Government before filing an action under the Act. This is called a qui tam action. The individual must file the lawsuit on behalf of the government in federal district court. The lawsuit is kept confidential while the government reviews and investigates the allegations contained in the lawsuit and decides how to proceed. FERA grants greater latitude for the Department of Justice (DOJ) to issue subpoenas and to share information with whistleblowers and state and local governments. If the government decides the lawsuit has merit, the government may intervene or join in the lawsuit.
If the government decides not to join in the lawsuit, the individual may still continue with the lawsuit on his or her own.
If the lawsuit is successful, an individual may receive an award ranging from 15 to 30 percent of the amount recovered by the government and may also be entitled to reasonable expenses, including attorney’s fees. However, this is reduced or nullified if the individual is found to have planned or initiated the violation. Further, the individual may be held liable for the defendant’s attorney’s fees if it is a frivolous claim.
An individual bringing a lawsuit under the Act is offered a number of protections under federal law. Any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to any relief necessary to make the employee whole. FERA extends anti-retaliation protection to contractors and agents.
Scottsdale Healthcare has a policy and long-standing practice of nonretaliation whenever a compliance issue such as a billing issue is brought to our attention. Therefore, we encourage all of our employees and contractors to bring forth any compliance concern you may have by using our confidential Compliance Hotline at 480-882-6169 or toll-free at 888-882-7891.
Administrative Remedies for False Claims
The Program Fraud Civil Remedies Act of 1986 (PFCRA) (source: 31 U.S.C. sec. 3801, et. seq.), provides for administrative remedies against persons who make, or cause to be made, a false claim or written statement to certain federal agencies, including the Department of Health and Human Services. The PFCRA was enacted as a means to address lower dollar frauds, and generally applies to claims of $150,000 or less. The PFCRA provides that any person who makes, presents, or submits, or causes to be made, presented or submitted a claim that the person knows or has reason to know is false, fictitious, or fraudulent is subject to civil money penalties of up to $5,000 per false claim or statement and up to twice the amount claimed in lieu of damages. Violations are investigated by the Office of Inspector General and enforcement actions must be approved by the U.S. Attorney General. The PFCRA enforcement can begin with a hearing before an administrative law judge. Penalties may be recovered through a civil action brought by the U.S. Attorney General or through an administrative offset against ‘clean’ claims. Because of the availability of other criminal, civil, and administrative remedies, cases are not routinely prosecuted under this civil remedies act.
Although the state of Arizona does not have its own “False Claims Act”, there are a number of state laws that apply to filing fraudulent claims with the government.
- It is unlawful for a person to make a claim to the state, the AHCCCS administration, or a contractor for an item or service the person knows was not provided, is false or fraudulent, or may not be made by the health care system for specified reasons such as medical necessity. §§36-2918, 36-2957, A.R.S.
- Making a claim as described above may be subject to both criminal and civil penalties. §§13-2310, 13-2311, 36-2918, 36-2957, A.R.S.
- An employee can make a claim against an employer if that employee is terminated in retaliation for disclosing information in a reasonable manner that the employer or an employee of the employer has violated the law. §23-1501, A.R.S.
- It is a felony offense for a person to knowingly offer, deliver, receive or accept compensation in any form for referring a patient, client or customer to any individual, pharmacy, laboratory, clinic or health care institution providing medical or health-related services or items. §13-3713, A.R.S.
Scottsdale Healthcare’s Coding, Billing and Anti-fraud Policy:
It is Scottsdale Healthcare’s policy to detect and prevent fraud in the delivery of healthcare services. Many federal and state laws are designed to prevent healthcare fraud. Some of these laws are intended to prevent any kickback or payment for referring patients, particularly in federally or state funded programs. Other laws prohibit the submission of false claims. The penalties for violating the anti-fraud laws are severe and include fines, criminal or civil actions or exclusion from the Medicare and AHCCCS programs or other federal programs.
It is Scottsdale Healthcare’s policy to comply with the anti-fraud laws and to take appropriate measures to detect and prevent potential noncompliance or errors. Accordingly, Scottsdale Healthcare and its staff members will follow these principles in order to comply with these laws:
- Scottsdale Healthcare will only submit claims for services that were provided.
- Scottsdale Healthcare will document and code claims accurately to reflect the services provided.
- Scottsdale Healthcare will not knowingly submit false or fraudulent statements or claims for payment.
- Scottsdale Healthcare will correct a bill that it learns is inaccurate or take other appropriate measures.
- Scottsdale Healthcare will notify payors of overpayments for services and will refund overpayments, as applicable.
- Scottsdale Healthcare will provide its patients or payors with a statement for services and will, upon request, provide patients with itemized statements of such services.
- Scottsdale Healthcare will not make or offer payments or any other benefits to physicians or others for referrals of patients or the ordering of services.
- Scottsdale Healthcare will not offer or accept payments or any other benefits from vendors or suppliers in return for additional business.
- Scottsdale Healthcare will cooperate with authorized investigators seeking information about potential billing or fraud concerns.
- Scottsdale Healthcare will not retaliate against someone who, in good faith, makes a complaint or participates in the investigation of a complaint concerning false or fraudulent statement or claims of payment.
How to Report a Compliance Concern:
If you have compliance concerns or questions regarding Scottsdale Healthcare, you may:
- Call Scottsdale Healthcare’s Compliance Department at
480-882-6872. The Compliance Department is located at 3604 N. Wells Fargo, Suite D on the Osborn campus.
- Alternatively, you can call the Compliance Hotline (1-888-882-7891 or 480-882-6169) at any time or submit a written concern to the Compliance Department. The Compliance Department will respond promptly to all compliance calls and reports. Compliance calls and reports will be treated confidentially, to the extent permitted by law, unless you agree otherwise. You can make an anonymous call or report, although it is sometimes harder for the Compliance Department to investigate concerns without being able to contact you for follow-up information.