Corporate Compliance - False Claims Liability, Anti-Retaliation Protections, and Detecting and Responding to Fraud, Waste and Abuse
To provide information about the role of certain federal and state laws in preventing and detecting fraud, waste, and abuse in federal health care programs.
This policy applies to employees (including management), contractors, and agents of Lakeview Medical Center. Contractors and agents include any contractor, subcontractor, agent, or other person which or who, on behalf of Lakeview Medical Center, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by Lakeview Medical Center.
Lakeview Medical Centerprovides health care services in a manner that complies with applicable federal and state laws and that meets the high standards of business and professional ethics. To further this policy, and to comply with Section 6032 of the Deficit Reduction Act of 2005, Lakeview Medical Centerprovides the following information about its policies and procedures and the role of certain federal and state laws in preventing and detecting fraud, waste, and abuse in federal health care programs:
Summary of Federal and State Laws:
The following is a summary of the Federal False Claims Act, the Program Fraud Civil Remedies Act, and Wisconsin’s Medicaid Fraud Statute, and their role in preventing and detecting fraud waste, and abuse in federal health care programs.
Federal False Claims Laws:
State False Claims Laws:
- False Claims Act; 31 U.S.C. §§ 3729 - 3733 The federal False Claims Act imposes liability on any person or entity who:
- Knowingly files a false or fraudulent claim for payments to Medicare, Medicaid or other federally funded health care program;
- Knowingly uses a false record or statement to obtain payment on a false or fraudulent claim from Medicare, Medicaid or other federally funded health care program; or
- Conspires to defraud Medicare, Medicaid or other federally funded health care program by attempting to have a false or fraudulent claim paid.
- “Knowingly” means:
- Having actual knowledge that the information on the claim is false;
- Acting in deliberate ignorance of whether the claim is true or false; or
- Acting in reckless disregard of whether the claim is true or false.
- A person or entity found liable under the False Claims Act is, generally, subject to civil money penalties of between $5,500 and $11,000 per claim plus three times the amount of damages that the government sustained because of the illegal act. In health care cases, the amount of damages sustained is the amount paid for each claim that is filed that is determined to be false.
- Anyone may bring a qui tam action under the False Claims Act in the name of the United States. The case is initiated by filing the complaint and all available material evidence under seal with a federal court. The complaint remains under seal for at least 60 days and will not be served on the defendant. During this time, the government investigates the complaint. The government may, and often does, obtain additional investigation time by showing good cause. After expiration of the review and investigation period, the government may elect to pursue the case in its own name or decide not to pursue the case. If the government decides not to pursue the case, the person who filed the action has the right to continue with the case on his or her own.
- If the government proceeds with the case, the person who filed the action will receive between 15% and 25% of any recovery, depending upon the contribution of that person to the prosecution of the case. If the government does not proceed with the case, the person who filed the action will be entitled to between 25% and 30% of any recovery, plus reasonable expenses and attorneys’ fees and costs.
Program Fraud Civil Remedies Act; 31 US. C. §§ 3801 - 3812
The Program Fraud and Civil Remedies Act (“PFCRA”) creates administrative remedies for making false claims and false statements. These penalties are separate from and in addition to any liability that may be imposed under the False Claims Act. The PFCRA imposes liability on people or entities that file a claim that they know or have reason to know: In addition, a person or entity violates the PFCRA if they submit a written statement that they know or should know:
- Is false, fictitious, or fraudulent;
- Includes or is supported by any written statement that contains false, fictitious, or fraudulent information;
- Includes or is supported by a written statement that omits a material fact, which causes the statement to be false, fictitious, or fraudulent, and the person or entity submitting the statement has a duty to include the omitted fact; or
- Is for payment for property or services not provided as claimed.
- A violation of this section of the PFCRA is punishable by a $5,000 civil penalty for each wrongfully filed claim, plus an assessment of twice the amount of any unlawful claim that has been paid.
- Asserts a material fact that is false, fictitious or fraudulent; or
- Omits a material fact that they had a duty to include, the omission caused the statement to be false, fictitious, or fraudulent, and the statement contained a certification of accuracy.
- A violation of this section of the PFCRA carries a civil penalty of up to $5,000 in addition to any other remedy allowed under other laws.
Medicaid Fraud Statute, s. 49.49(1), Wis. Stats.
Lakeview Medical Center’s Policies and Procedures for Detecting and Preventing Fraud
Lakeview Medical Center’s Compliance Program is designed to be consistent with Office of Inspector General (OIG) Compliance Program Guidance for Hospitals. The Compliance Program and the Hospital’s policies and procedures for detecting and preventing fraud, waste, and abuse are available on Lakeview Medical Center’s intranet site.
- The state Medicaid fraud statute prohibits any person from:
- Knowingly and willfully making or causing to be made a false statement or misrepresentation of a material fact in a claim for Medicaid benefits or payments.
- Knowingly and willfully making or causing to be made a false statement or misrepresentation of a material fact for use in determining rights to Medicaid benefits or payments.
- Having knowledge of an act affecting the initial or continued right to Medicaid benefits or payments or the initial, or continued right to Medicaid benefits or payments of any other individual on whose behalf someone has applied for or is receiving the benefits or payments, concealing or failing to disclose such event with an intent to fraudulently secure Medicaid benefits or payments whether in a greater amount or quantity than is due or when no benefit or payment is authorized.
- Making a claim for Medicaid benefits or payments for the use or benefit of another, and after receiving the benefit or payment, knowingly and willfully converting it or any part of it to a use other than for the use and benefit of the intended person.
- Anyone found guilty of the above may be imprisoned for up to six years, and fined not more than $25,000, plus 3 times the amount of actual damages.
Individuals within an organization who observe activities or behavior that may violate the law in some manner and who report their observations either to management or to governmental agencies are provided protections under certain laws.For example, the False Claims Act includes protections for people who file qui tam lawsuits as described above. The False Claims Act states that any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful actions taken in furtherance of a qui tam action is entitled to recover damages. He or she is entitled to “all relief necessary to make the employee whole,” including reinstatement with the same seniority status, twice the amount of back pay (plus interest), and compensation for any other damages the employee suffered as a result of the discrimination. The employee also can be awarded litigation costs and reasonable attorneys’ fees.
Under Wisconsin statute 146.997, Health Care Worker Protection, Wisconsin law also protects health care workers who disclose any of the following to an appropriate individual or agency:
- Information that a health care facility or provider has violated any state law or rule or federal law or regulation;
- A situation in which the quality of care provided by, or by an employee of, the health care facility or provider violates established standards and poses a potential risk to public health or safety.
- Specifically, the health care facility or provider cannot take disciplinary action against an individual who reports the above in good faith. A health care facility or provider who violates this statute shall be subject to not more than $1,000 for a first violation.
Lakeview Medical Center’s Compliance Program includes the rights of employees to be protected as whistleblowers. The Hospital’s Compliance Program policies and procedures are available on the Lakeview Medical Center intranet site.
Role of False Claims Laws:
The false claims laws discussed above are an important part of preventing and detecting fraud, waste, and abuse in federal and state health care programs because they provide governmental agencies the authority to seek out, investigate and prosecute fraudulent activities. Enforcement activities take place in the criminal, civil and administrative arenas. This provides a broad spectrum of remedies to battle these problems.
Anti-retaliation protections for individuals who make good faith reports of waste, fraud and abuse encourage reporting and provide broader opportunities to prosecute violators. Statutory provisions, such as the anti‑retaliation provisions of the False Claims Act, create reasonable incentives for this purpose. Employment protections create a level of security employees need in order to help in prosecuting these cases.