False Claims Act Violations
and Corporate Compliance
False
Claims
Act
Violations
31 U.S.C. §3729
31 U.S.C. §3729
The
Players
1) Department of Justice (DOJ)
enforces civil and criminal law 2) Office of Inspector General (OIG)
t t t
– cannot go to court
– has authority to administratively
exclude a provider from a federal
health care program
The
Players
3) Qui TamRelators
– private party – must be original source of admissible information
– case brought in federal court
– DOJ may join or may decline
– receives a % of recovery
Violation occurs when a
person knowingly presents
person knowingly presents
false or fraudulent claims.
“Reckless
disregard
of
the
truth”
is
sufficient
to
establish
“knowing”
violation
— do
not
need
to
prove
specific
intent.
However, innocent
mistakes, even negligence,
do not constitute a violation
False Claims Act Violations
and Corporate Compliance
Intentional Act
Reckless
Reckless
Mistake
Mistake
Reckless
Disregard?
Reckless
Disregard?
False Claims Act Penalties:
Civil money penalties of $5,500 ‐ $11,000/claim
3x the amount of damage sustained by Government
Possible exclusion from Medicare and Medicaid Programs
6 year statute of limitations
+
+
=
=
Settlement
Settlement
U.S. v. Krizek, 111 F.3d 934 (D.C. Cir. 1997)
Physiciany held liable for claims submitted on his behalf.
Ohio Hospital Association v. Shalala
(September 25, 1997)
Government policy of demanding
penalty in lieu of false claims suit is
“heavy handed” … but legal!
June 3, 1998 Memorandum from Eric H. Holder Jr., Deputy Attorney General, will help providers — but will not eliminate the use of the will not eliminate the use of the
False Claims Act in health care investigations.
(Appendix K) (Appendix K)
However, be aware of Qui Tam
Relators Ex US ex rel. Kosenske v.
Carlisle HMA, Inc., 2007 WL31490537 (Nov. 14, 2007)
False Claims Act Violations
and Corporate Compliance
Best
means
of
complying
with
False Claims Act is an effecti e
Tip:
Tip:
False
Claims
Act
is
an
effective
compliance
program.
Corporate Compliance
(Appendix L) (Appendix L)
The OIG has told health care providers what it thinks they should be doing by:
–Publishing a model Compliance Guidance for
various providersp includingg p y physicians
–OIG has published Final Supplemental
Compliance Guidance for Hospitals on
January 31, 2005
(Appendix P) (Appendix P)
Result:
Many
providers
have
adopted,
or
i th
f d
ti
are
in
the
process
of
adopting,
a
corporate
compliance
process
September 25, 2000 —
OIG published its Final Compliance
Program Guidance for Individual and
S ll G Ph i i P ti Small Group Physician Practices
(Appendix P) (Appendix P)
“OIG
believes
that
the
majority
of
physicians
are
honest.”
However,
“all
health
care
providers
have
a
duty
y
to
ensure
that
the
claims
submitted
to
Federal
Health
Plans
are
true
and
accurate.”
False Claims Act Violations
and Corporate Compliance
• Sets forth the fundamental components of a Compliance Program, but is guidance only — not a “Model Compliance Program”
• Analogizes corporate compliance toAnalogizes corporate compliance to “preventative medicine”
• Urges physicians to adopt a compliance policy regardless of the size of the practice
•Recognizes that one size does not fit all and the policy must be tailored to the needs of be tailored to the needs of each particular organization
• Must be more than a policy that
sits in a binder on a shelf
• Must be dynamic and change as
circumstances dictate circumstances dictate
• Thus, prepare to call it a
“Compliance Process”
• Stresses importance of training staff
and fostering open lines of
communication within the practice communication within the practice
• Have a mechanism to review your
coding and billing systems coding and billing systems
• The Appendices to the OIG’s Compliance Guidance to Physicians Groups are an excellent summary of the law (but must be updated to reflect current legal developments such as the most recent Stark regulations)
Stark regulations).
• OIG’s 1‐31‐05 Supplemental Compliance Guidance to Hospitals is more up‐to‐date and is very helpful.
False Claims Act Violations
and Corporate Compliance
Advantages of a corporate compliance process:
Evidences organization’s intent to comply with
–Evidences organization s intent to comply with
the law
Advantages of a corporate compliance process:
–Establishes an institutional memory that will:
•Minimize mistakes that are due to a failure to document
•Establish a resource within the institution that can be used to address compliance‐ related questions as they arise
January 31, 2005 Final Compliance Guidance for Hospitals (Appendix O) January 31, 2005 Final Compliance Guidance for Hospitals (Appendix O)
Advantages of a corporate compliance process:
–Can also help in the defense of a
i t l i
qui tamclaim
–Will be a mitigating factor if provider is found liable under the False Claims Act
Advantages of a corporate compliance process:
–Improved documentation may enhance
patient care: p
•minimize billing mistakes
•lessen the chance of an audit
•avoid conflicts with Stark and
Antikickback Statutes
•May result in ↑in reimbursement
Intentional Conduct
Advantages of a corporate compliance process:
Advantages of a corporate compliance process:
Mistake Mistake
*Avoids allegation raised in U.S. ex rel Hefner v. Hackensack University Medical Center(D.NJ. Aug. 13, 2003)
that failure to implement an effective that failure to implement an effective
compliance process is evidence of
reckless disregard or deliberate
False Claims Act Violations
and Corporate Compliance
When examining your internal processes, do so with the assistance processes, do so with the assistance
of legal counsel
What to do now?
• Return money to Fiscal Intermediary (FI)
Part A or Carrier (Part B) or
• Make voluntary disclosure to the OIG
and/or approach the Department of
Justice (DOJ)
• What is the difference ‐$$$$, but
obtain finality
•
However,
you
can
still
correct
mistakes
without
raising
g
suspicion
Bottom line – when required,
voluntary disclosure will
Bottom line – when required,
voluntary disclosure will
result in lower repayment
and peace of mind
result in lower repayment
and peace of mind
Problems
in
contracts...
Consider:
• State law
• Breach can end up in court andBreach can end up in court and
documents become public
• Stark law is very detail‐oriented
Ex Kosenskecase
Corporate compliance does not need to be:
•
Complicated
Complicated
•
Disruptive,
or
False Claims Act Violations
and Corporate Compliance
What is needed to make a
corporate compliance process
work are:
• Appropriately trained individuals
• Applying common sense in a
positive environment that is
institutionally committed to