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False Claims Act

OIG reviews the False Claims Act.

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Hello. My name is Katie Fink. I am an attorney with the Office of the Inspector General. I'm here to introduce you to the False Claims Act.

The False Claims Act, or "FCA," provides a way for the government to recover money when someone submits or causes to be submitted false or fraudulent claims for payment to the government, including the Medicare and Medicaid programs.

Examples of health care claims that may be false include claims where the service is not actually rendered to the patient, is provided but is already provided under another claim, is upcoded, or is not supported by the patient's medical record.

Claims also may be false if they result from referrals made in violation of the Federal Anti-kickback statute or the Stark law. These laws are addressed in other OIG presentations.

When the government pursues violations of the False Claims Act, it does not target innocent billing mistakes. False claims are claims that the provider knew or should have known were false or fraudulent. "Should have known" means deliberate ignorance or reckless disregard of the truth. This means providers cannot avoid liability by ignoring inaccuracies in their claims or hide their heads in the sand. Health care providers need to understand the program rules and take proactive measures, such as conducting internal audits within their organizations, to ensure compliance.

I should point out that even if a provider makes an innocent billing mistake, that provider still has a duty to repay the money to the government. The Affordable Care Act included a new requirement that providers must repay identified overpayments to Medicare and Medicaid within 60 days or be subject to penalties.

What happens if a provider does not comply with the False Claims Act? For False Claims Act violations, a provider can be penalized up to three times the program's loss, plus an additional $11,000 per claim. And penalties add up quickly because each claim for payment can be a separate ground for liability.

In addition to serving as a powerful tool to recover money from fraudulent providers and suppliers, the False Claims Act also provides a strong financial incentive to whistleblowers to report fraud. Whistleblowers can receive up to 30 percent of any False Claims Act recovery. And that can be a lot of money. Who are the most common whistleblowers? Often whistleblowers turn out to be ex-business partners, current or former employees, competitors, or even patients.

FCA cases are in the news and many involve large companies, such as drug and device manufacturers or pharmaceutical companies. But there also are many cases involving smaller entities and individuals. For example, a recent FCA case involved a cardiologist who allegedly submitted claims to the Federal health care programs for services that were not supported by patient medical records and did not meet the billing criteria. Additionally, the physician allegedly billed separately for services that the government had already paid for as part of a bundled payment for a group of services. To resolve these allegations the doctor paid $435,000 and entered into a 5-year Integrity Agreement.

Providers must ensure that the claims they submit to Medicare and Medicaid are true and accurate. One of the most important steps a provider can take is to have a robust internal audit program that monitors and reviews claims. If a provider identifies billing mistakes in the course of those audits, the provider must repay overpayments to Medicare and Medicaid within 60 days to avoid False Claims Act liability. Providers also can disclose billing errors to the OIG through the OIG Self-Disclosure Protocol.

Remember it is a provider's responsibility to consistently submit accurate claims. It is the easiest way to comply with the law.

For more information, review the False Claims Act or consult with your health care counsel.