The Deficit Reduction Act of 2005 requires health care entities to educate contractors and agents, including providers, about the federal 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 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:
- Knowingly present, or cause to be presented, a false or fraudulent claim for payment to the federal government.
- 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.
- Conspire to defraud the government by getting a false or fraudulent claim allowed or paid.
- 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.
- Authorize the making or delivering of a document that 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 the information on the receipt is true.
- 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.
- 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 $11,000 per claim and treble damages (i.e., three times the amount of actual damages) for federal 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 between $6,000 and $12,000 may be imposed for each violation of the NYS False Claims Act and a civil penalty 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, 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 allows private parties, known as "qui tam relators," to 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 because 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 because of the discrimination, including litigation costs and reasonable attorney fees.
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 that 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 that requires Medicaid providers to 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. Effective January 1, 2007, OMIG, in consultation with the Department of Health (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’s website at https://omig.ny.gov/. 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.
The Anti-Kickback Statute prohibits knowingly and willfully soliciting, receiving, offering, or paying remuneration (including any kickback, bribe, or rebate) for referrals for services that are paid, in whole or inpart, under a federal health care program (including the Medicare Program).
42 USC Section 1320a-7b(b)
New York State also has an Anti-Kickback Statute. For more information, see Education Law §§6530(18),6530(19), Social Services Law §366-d and 18NYCRR 515.2.
STARK STATUTE (Physician Self-Referral Law)
The Stark Statute prohibits a physician from making referrals for certain designated health services to an entity when the physician (or a member of his or her family) has:
- An ownership/investment interest or
- A compensation arrangement
Exceptions may apply. For more information, refer to 42 USC Section 1395nn.
New York State anti-referral law applies to practitioners, which also includes nurses, physician assistants, midwives, etc. For more information, see New York State Public Health Law § 238-a (2) (c).