Legal Information Regarding Federal and State False Claims Acts
The Federal False Claims Act (FCA) states the liability for individuals who file or cause to be filed false or fraudulent claims. In addition, many states have enacted state false claims acts which are similar to the Federal FCA. DCI is committed to deterring fraud, waste, and abuse within the company and complying with all Federal and state regulations. Through its compliance program, DCI has implemented policies and procedures to prevent the filing of false claims. Additionally, DCI has established methods for reporting suspected false claims to the Compliance Officer, including confidential and anonymous methods. Details of DCI’s compliance program are contained in the Corporate Policy & Procedure Manual, the DCI Intranet (http://intranet.dciinc.org), and in your annual compliance training. Below, DCI has outlined important provisions relevant to you which are contained in the Federal False Claims Act (FCA). In addition, many states have enacted state false claims acts or related acts which contain provisions similar to the FCA. Complete texts and/or summaries of the Federal and state false claims acts, as well as links to the relevant Federal and state websites, are listed below and on subsequent pages.
Important Provisions of the Federal False Claims Act
The Federal False Claims Act, 31 U.S. Code § 3729, provides, in pertinent part, that:
Any person who commits the following acts will be liable for a five to ten thousand dollar fine (adjusted for inflation since the act was passed) and monetary penalty of three times the amount of damages sustained by the government:
- knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
- knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;
- has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property;
- is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government, and intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
- knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property;
- 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, or
- Conspires to commit any of the above violations.
For purposes of the above section, the terms “knowing” and “knowingly” mean that the person, has actual knowledge of the information, acts in deliberate ignorance of the truth or falsity of the information, or acts in reckless disregard of the truth or falsity of the information. The government does not need to prove an intent to defraud in order to impose the penalties. 31 U.S.C. 3729.
As it pertains to healthcare, the FCA most often applies when a person submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services he or she knows he or she has not provided. The False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits records that he or she knows (or should know) are false and that indicate compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim” may include a hospital who obtains interim payments from Medicare throughout the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.
State False Claims Laws
The federal government has encouraged States to pass their own false claims laws that are at least as strong as the federal version. Many states have enacted these. Links to the specific state laws for each state are in the last section of this page.
Whistleblower protections for Qui Tam relators
In addition to its substantive provisions, the FCA and many state acts provide that private parties may bring an action on behalf of the government. These private parties, formally named “qui tam relators,” but also known as “whistleblowers” or “relators” may share in a percentage of the proceeds from a FCA action or settlement.
Section 3730 of the FCA provides, with some exceptions, that when the Government has intervened in the lawsuit, the relator, shall receive at least 15 percent but not more than 25 percent of the proceeds of the FCA action depending upon the extent to which the relator substantially contributed to the prosecution of the action. When the Government does not intervene, the relator shall receive an amount that the court decides is reasonable and shall be not less than 25 percent and not more than 30 percent.
The FCA and many state acts provide protection to whistleblowers 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 FCA. Remedies include reinstatement with comparable seniority as the relator 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.
DCI’s procedures to report potential false claims violations
DCI’s Compliance Program prohibits the preparation or submission of any false or fraudulent claims. If you encounter any situation which that you believe might violate a federal or state law or regulation, or any provision of DCIs Policies and Procedures, you should immediate report your concerns to your immediate supervisor or to the DCI Compliance Officer. Reports may be made to the Compliance Officer: (1) in writing to Dialysis Clinic, Inc., 1633 Church Street, Suite 500, Nashville, TN 37203; (2) via email at email@example.com; or (3) through DCIs Compliance Hotline at (877) 326-1109. All correspondence to the Compliance Officer will be treated confidentially. Reports may be conducted anonymously – written reports do not need to be signed and you are not required to identify yourself in a telephone report. (See DCI Policy and Procedures, Procedure 201.)
DCI prohibits retaliation or retribution of any kind against a person who, in good faith, makes any report regarding actual or potential compliance violations and who was not involved in the misconduct. Any person, including any manager or supervisor, who is found to have engaged in, or condoned, an act of retaliation against an individual in response to a good faith report of a suspected or actual violation will be subject to discipline, up to and including termination. (See DCI Policy and Procedures, Procedures 204, 205 and 205A.)
Federal and State Law Resources
The “General Code” links will take you to the home page of websites that contain all or significant parts of federal or state codes.
The “False Claims” links will take you to laws regarding the submission of false claims to a government entity. These acts may be Medicaid specific or cover claims against all state government entities and sometimes against private healthcare insurers. Penalties for false claims may be found in False Claims Acts but may also be found under other sections of the code.
The “Qui Tam” links will take you to laws regarding qui tam actions, in which a private citizen sues on behalf of the government and in return receives some part of any award or settlement received by the government.
The “Whistleblower Protection” links will take you to laws that provide varied levels of protection for employees who report their employer’s misconduct or who participate in an investigation against their employer.
In addition to the laws linked here, general fraud laws exist in most states. The requirements are often different from False Claims laws and may include criminal and civil liability but these laws may also apply to false claims.
False Claims Laws – State Laws
For state False Claims Law resources, click on the links that follow each state:
General Code :. False Claims and Qui Tam Actions (See Sections 25.5-4-304 to 25.5-4-309) :. Whistleblower Protections (See Sections 24-114-101 to 24-114-103) :. Whistleblower Protections – Healthcare Specific (See Section 8-2-123)
General Code :. False Claims, Qui Tam Actions, Whistleblower Protection :. False Claims-Medicaid Specific, Criminal (See Section 35-43-5-7.1)
General Code :. False Claims Act, Qui Tam Actions, Whistleblower Protection:. False Claims – Medicaid Specific
General Code :. False Claims, Qui Tam Actions, Whistleblower Protection (scroll through the statutes using the arrow at the top of the page).
General Code – Go to the left side of the screen and find the link titled “Statutes, Rules, and Const.” under the TOC column. Click the plus sign to expand the table of contents. Click the plus sign next to “NMSA” to find the state statutes. Click the plus sign next to the “More” option to view all the Chapters. For False Claims, Qui Tam Actions, and Whistleblower Protection laws click the plus sign next to “Chapter 44” and then next to “Article 9.” Click the various links throughout this article to find the language of the laws. For Medicaid Specific False Claims, Qui Tam Actions, and Whistleblower Protection, click the plus sign next to “Chapter 27” and then “Article 14.” Click the various links throughout this article to find the language of the laws.
General Code :. False Claims, Qui Tam Actions, Whistleblower Protection – General :. (For False Claims – Health Specific, Criminal: see Penal Law, Article 177) (For False Claims – Medicaid Specific: see Social Services Law Section 145)
General Code :. (For False Claims, Qui Tam Actions, Whistleblower Protections – General: see Sections 4-18-101 to 4-18-108) (For False Claims, Qui Tam Actions, Whistleblower Protections – Medicaid Specific: see Sections 71-5-181 to 71-5-185)
Transparency in Coverage Machine-Readable Files:
This link leads to the machine-readable files that are made available in response to the federal Transparency in Coverage Rule and includes negotiated service rates and out-of-network allowed amounts between the Dialysis Clinic, Inc. Health and Welfare Plan and healthcare providers. The machine readable files are formatted to allow researchers, regulators, and application developers to more easily access and analyze data.
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