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  • Fraud and Abuse > False Claims Act and Medicaid Fraud Programs

    The Deficit Reduction Act of 2005 requires health care entities to educate contractors and agents, including providers, about the False Claims Act. In addition, New York State requires Medicaid providers to develop and implement compliance programs aimed at detecting fraud, waste and abuse in the Medicaid program. Providers should ensure that their personnel are familiar with the requirements below.

    False Claims Act

    Neither EmblemHealth nor our providers may submit false or fraudulent claims to the Federal government. The Federal False Claims Act makes it illegal to:

    1. Knowingly present, or cause to be presented, a false or fraudulent claim for payment to the federal government.
    2. Knowingly make, use or cause to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government.
    3. Conspire to defraud the government by getting a false or fraudulent claim allowed or paid.
    4. Have possession, custody or control of property or money used or to be used by the government and, intending to defraud the government, either willfully conceal the property or deliver or cause to be delivered less property than the amount for which the person receives a certificate or receipt.
    5. Authorize the making or delivering of a document which certifies receipt of property used or to be used by the government and, intending to defraud the government, make or deliver the receipt without completely knowing that the information on the receipt is true.
    6. Knowingly buy, or receive as a pledge of an obligation or debt, public property from an officer or employee of the government or member of the Armed Forces who may not lawfully sell or pledge the property.
    7. Knowingly make, use or cause to be made or used a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the government.

    "Knowingly" includes acting not only with actual knowledge but also with deliberate ignorance or reckless disregard of the facts. To impose liability, it is not necessary for the court to find a specific intent to defraud. Simply presenting a false claim is a violation, even if the claim has not been paid and no money has been expended.

    The federal government may impose fines of up to $10,000 per claim and treble damages (i.e., three times the amount of actual damages) for False Claims Act violations.

    In addition to the Federal False Claims Act, New York State (NYS) and New York City (NYC) have each enacted a False Claims Act. All three prohibit the items set forth above and all three can impose treble damages for each violation. A civil penalty of between $6,000 and $12,000 may be imposed for each violation of the NYS False Claims Act and a penalty of between $5,000 and $15,000 may be imposed for each violation of the NYC False Claims Act. In each instance, the court is authorized to reduce the fine to two times the amount of damages if the alleged violator (i) provided full information to the Commissioner of Investigation, or the investigating agency or official(s), within 30 days of receiving the information; (ii) cooperated with any subsequent government investigation; and (iii) at the time the individual provided information about the violation, no action had commenced with respect to the violation and the individual did not have any actual knowledge that an investigation was underway. It should be noted that the NYS False Claims Act does not apply to claims, records or statements made under the tax law.

    Whistleblower Protections under the False Claims Act

    The Federal False Claims Act provides that private parties, known as "qui tam relators," may bring an action on behalf of the United States. The Act provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the Federal False Claims Act. Remedies include reinstatement with seniority comparable with what the individual would have had but for the discrimination, two times the amount of any back pay, interest on any back pay and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.

    Under New York's Labor Law, employers are prevented from taking any retaliatory actions (i.e. discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment) against an employee who discloses or threatens to disclose to a supervisor or a public body an activity, policy or practice of the employer that is in violation of a law, rule or regulation the violation of which creates and presents a substantial and specific danger to public health or safety or which constitutes health care fraud. An employee who has been the subject of a retaliatory personnel action may institute a civil action for relief within one year after the alleged retaliatory personnel action was taken.

    New York State Medicaid Fraud Detection

    Chapter 442 of the Laws of 2006, which established the New York State Office of the Medicaid Inspector General (OMIG), also created a new Social Services Law § 363-d which requires that Medicaid providers develop and implement compliance programs aimed at detecting fraud, waste and abuse in the Medicaid program. Each provider covered by the requirements must develop and adopt an effective compliance program based on a set of minimum core requirements. Provider compliance programs shall, at a minimum, be applicable to billings to and payments from the medical assistance program, but need not be confined to such matters. The law contains only the minimum requirements for such plans and, effective January 1, 2007, the OMIG, in consultation with the DOH, is authorized to impose additional requirements for compliance plans beyond the basic statutory requirements.

    Additional requirements, minimum standards, etc., may be found at the Office of the Medicaid Inspector General Web site at www.omig.state.ny.us. In addition, a new Part 521, entitled "Provider Compliance Programs," is added to Title 18 of the Codes, Rules and Regulations of the State of New York.

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    Glossary terms found on this page:

    An activity of EmblemHealth or its subcontractor that results in:

    • Denial or limited authorization of a service authorization request, including the type or level of service
    • Reduction, suspension or termination of a previously authorized service
    • Denial, in whole or in part, of payment for a service
    • Failure to provide services in a timely manner
    • Failure of EmblemHealth to act within the time frames for resolution and notification of determinations regarding complaints, action appeals and complaint appeals

    Services that have been approved for payment based on a review of EmblemHealth's policies.

    An itemized statement of health care services and their costs provided by a hospital, physician's office or other health care facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.

    Services rendered by a physician whose opinion or advice is requested by another physician for further evaluation or management of the patient.

    A legal agreement between an individual member or an employer group and a health plan that describes the benefits and limitations of the coverage.

    A business entity that performs delegated functions on behalf of the insurer or managed care organization.

    Acronym for Medicare Advantage. An alternative to the traditional Medicare program in which private plans run by health insurance companies provide health care benefits that eligible beneficiaries would otherwise receive directly from the Medicare program.

    A jointly funded federal and state program that provides hospital and medical coverage to the low-income population and certain aged and disabled individuals.

    An individual and each of his or her eligible dependents, including Medicare beneficiaries who are enrolled or participate in a benefit program and who are entitled to receive covered services from the practitioner pursuant to such benefit program and the terms of the practitioner's agreement.

    A type of health benefit plan that allows enrollees to go outside the health plan's provider network for care, but requires enrollees to pay higher out-of-pocket fees when they do. Also called Point of Service.

    A medical practitioner or covered facility recognized by EmblemHealth for reimbursement purposes. A provider may be any of the following, subject to the conditions listed in this paragraph:

    • Doctor of medicine
    • Doctor of osteopathy
    • Dentist
    • Chiropractor
    • Doctor of podiatric medicine
    • Physical therapist
    • Nurse midwife
    • Certified and registered psychologist
    • Certified and qualified social worker
    • Optometrist
    • Nurse anesthetist
    • Speech-language pathologist
    • Audiologist
    • Clinical laboratory
    • Screening center
    • General hospital
    • Any other type of practitioner or facility specifically listed in the member's Certificate of Insurance as a practitioner or facility recognized by EmblemHealth for reimbursement purposes

    A provider must be licensed or certified to render the covered service. The covered service must be within the scope of the Provider's license or certification.

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