Preventing Fraud, Waste and Abuse and the Federal False Claims Act (Policy Number: 122.11)
Policy No: 122.11
Original Issue Date: 11/27/2006
Review Date: 1/20/2014
Revision Date: 1/20/2014
Title: Preventing Fraud, Waste and Abuse and the Federal False Claims Act
Applicability: Jefferson Health System and its Controlled Affiliates (Jefferson)
The purpose of this policy is to provide all employees, contractors and agents of TJUH with detailed information regarding federal and state laws relating to false claims, including whistleblower provision in those laws, and to also provide information on preventing and detecting fraud, waste and abuse in the health care industry.
A cornerstone of TJUH's Compliance Program is the prevention and detection of fraud, waste and abuse. We train and educate all employees to recognize potential problem areas and to use the internal mechanisms available to report any suspected problems. This policy describes in detail: the definitions associated with the Federal False Claims Act, Provider prohibited acts, ways in which we can prevent fraud, waste, and abuse, and the avenues through which to report a suspected violation.
1) Definitions: The following definitions are used throughout this policy.
- Abuse – “Abuse” is any incident or practice that is inconsistent with accepted medical or business practice. For example, billing Medicare or Medicaid for services not reimbursable per the claims processing guidelines would be considered “abuse”.
- Claim – As set forth in 31 U.S.C. § 3729, "Claim" includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.
- False Claims Act – The False Claims Act (FCA) also known as the “Lincoln Law”, was originally passed during the Civil War to help the federal government combat widespread fraud by military suppliers. The FCA has been amended several times, most recently in 2010 with the passage of the Patient Protection and Affordable Care Act. Health care fraud now accounts for the majority of cases brought by whistleblowers and the government under the FCA.
- False Claim– A “false claim” is any bill presented to the government for payment where the individual presenting the bill for payment knows the services were never provided or the goods never delivered. Defective goods or services also constitute a “false claim.”
- Fraud – “Fraud” is the intentional or deliberate misrepresentation made by an individual that could result in some unauthorized benefit.
- Medicare – Medicare is a federal health care program that provides insurance to the elderly (aged 65 and older), the disabled and those suffering from end-stage renal disease. Coverage is provided regardless of income level. The Medicare program is financed primarily through payroll deductions. Enrollees also pay deductibles, co-pays and premiums. Daily administration of the program is handled by private insurance companies under contract with the federal government.
- Medicaid – Medicaid is a cooperative state and federal program which provides health care to the indigent. Medicaid is funded through general revenues, primarily federal, state and local taxes. Enrollees must meet certain eligibility criteria to receive Medicaid.
- Overpayment – Funds received or retained under Medicare or Medicaid in excess of amounts due. An overpayment may be the result of upcoding, billing errors, duplicate payments, or other non-adherence to Federal health care program requirements. Overpayments are considered an obligation under the FCA, subject to treble damages, if not reported and returned within 60 days after identification or the due date of any corresponding cost report.
- Relator – A private individual who brings a qui tam action is a “relator.”
- Qui Tam – The False Claims Act is unique in that it includes a “qui tam” or whistleblower provision. “Qui tam” is the shortened phrase that liberally translated means, “he who brings the action for the king as well as for himself.” In other words, an individual citizen with evidence of fraud against the government may sue on behalf of the government to recover the stolen goods or property. To compensate for the risk and effort of filing a qui tam case, the relator (citizen) is awarded a portion of the funds recovered, typically between 15 and 25 percent.
- Whistleblower – A person or entity making the protected disclosure is commonly referred to as a whistleblower. A whistleblower can be an employee, former employee or member of an organization who reports misconduct. Generally the misconduct is a violation of a law, rule or regulation.
2) The Federal False Claims Act (FCA)
A. False Claims Acts
In 1986, Congress, in response to reports of widespread fraud and abuse in government defense contracts, amended this law and created incentives for private citizens with evidence of fraud to come forward. Penalties include treble damages for each “false claim” submitted to the government plus additional civil penalties of between $5,500 and $11,000. The amendments also contained provisions to protect the citizen, also called a whistleblower, from retaliation. To reward individuals (also called “Relators”) for identifying fraud and assisting the government in prosecuting bringing these lawsuits, the amended law increased the portion of recovered funds, typically between 15 and 25 percent, which individuals could receive for helping the government. Further amendments made in 2009 and 2010 expanded the definition of a claim to include kickbacks and overpayments and increased whistleblower protections.
B. Pennsylvania Provider Prohibited Acts
The Commonwealth of Pennsylvania has enacted laws that provide similar false claims and fraud and abuse controls intended to protect Pennsylvania's Medicaid program. Pennsylvania's Public Welfare code includes criminal penalties and civil remedies for claims submitted in violation of the law.
C. Preventing Fraud, Waste and Abuse
- TJUH documentation and coding policies support accurate billing for services provided to our patients. Our standards of conduct and our policies and procedures require employees to understand and abide by the laws, regulations, policies and procedures that apply to them in the performance of their job duties. Our Code of Conduct is Attachment 1 to TJUH Policy No.102.26 and is our blueprint to “Do The Right THING”.
- In addition, the Compliance Office of TJUH conducts scheduled and unscheduled audits or reviews of our programs and services with particular emphasis on risk areas identified by the federal government and experts in the field. In addition to continuing education, TJUH subscribes to many publications to help us detect and prevent any problems without claims.
- Mistakes or errors on bills that result in overpayments are returned promptly in accordance with applicable laws and corrective action plans are required when problems are identified. Corrective action plans must be approved by the Chief Compliance Officer.
D. What to do if Fraud, Waste or Abuse is Suspected
- Any illegal, unethical, or improper activities need to be reported, investigated and rectified. Similar to the reporting of violations of the TJUH Code of Conduct and the Compliance Program, employees, management, contractors and agents have a duty to report suspected fraud, waste or abuse in Federal health care programs. Some examples of activities that should be reported include:
a. Billing for services or medical tests that were never performed;
b. Performing inappropriate or medically unnecessary medical procedures to increase reimbursement from the insurer;
c. Upcoding or inflating a bill to the insurer by using diagnosis codes that increase the reimbursement for that particular condition;
d. Double billing or billing twice for the same goods or services;
e. Inflating the actual work performed or billing for the highest level of service when in actuality a lower level of service was delivered;
f. Falsifying records or statements to get a claim paid or approved;
g. Failing to obtain the proper physician certifications before patients are treated with certain therapies; and,
h. Billing for unlicensed or unapproved drugs or services.
- Employees have a variety of internal reporting options to resolve concerns related to fraud, waste or abuse. Any concern should be shared with your immediate supervisor, manager or team leader. If that is not an option, employees should contact the Compliance Office of TJUH. Alternatively, an anonymous report can be made by calling ComplyLine: 1-888-5COMPLY. ComplyLine is available 24 hours a day, 7 days a week. Internal handling of Complyline calls is described in TJUH Policy No. 122.09. Employees are strongly encouraged to use any or all internal reporting mechanisms to resolve their issue.
- Retaliation against any person who reports, in good faith, an actual or perceived violation of our Compliance Program or other applicable laws, regulations or policies is strictly prohibited. Reports of suspected retaliation will be investigated according to the process set out in the hospital’s non-retaliation policy (TJUH Policy No. 122.10).
- The whistleblower protection provisions of the FCA provide for reinstatement, twice the amount of back pay with interest, and litigation costs and attorney’s fees if an employer discriminates against an employee for taking action under the FCA.
- Deficit Reduction Act of 2005 (S. 1932) §§ 6031-6034 (DRA)
- The False Claims Act, 31 U.S.C. §§ 3729-3733
- Administrative Remedies 31 U.S.C. §§ 3801, et seq
- 62 P.S. §§ 1407(a) (c),1408
- 55 Pa. Code §1101.75
- Internal Handling of ComplyLine Calls, Jefferson policy # 122.09
- Prohibition Against Retaliation for Good Faith Reporting of Noncompliance (Whistleblower Protections), TJUH policy # 122.10
Original Issue Date: 11/27/2006
Revision Date(s): 6/30/2009,7/27/2012,1/20/2014
Review Date(s): 6/30/2009,7/27/2012,1/20/2014
Responsibility for maintenance of policy: Compliance & Privacy Officer