False Claim Act
The False Claim Act in the health care is a federal law that makes it illegal for any person or an organization to intentionally create a false record or even file a false claim regarding the federal health care program. These can include any plan or programs that provide benefits either funded directly or indirectly by the government. Section 3729 of the act notes that a person can be held liable for knowingly presenting or causing a fraudulent claim for payment or approval ( Silberman, 2014 ). It also holds people responsible for deliberately using a false record or statement with an intention or conspiracy to commit fraud. Knowingly is defined as having the actual knowledge that a claim is false or acting with reckless disregard as to whether the claim is false. Many states have also adopted the law under the Medicaid False Claim Act which is designed to prevent fraud, conspiracies, and kickbacks within the Medicaid program.
There are several ways through which the businesses and individuals have continued to defraud the federal and state health care programs. One of the ways includes the submission of a claim for the services that were not rendered. The False Claim Act aims to prevent organizations from submitting claims for the treatments, diagnoses and medical services that were never provided to the patients. Sometimes, healthcare organizations submit a claim for the ghost patients; those who do not exist or never received the services being claimed. The statute begins, in § 3729(a), by explaining the conduct that creates FCA liability. In very general terms, “§§ 3729(a)(1)(A) and (B) set forth FCA liability for any person who knowingly submits a false claim to the government or causes another to submit a false claim to the government or knowingly makes a false record or statement to get a false claim paid by the government” ( Silberman, 2014 )
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Management’s Financial Responsibilities
The violation of the FCA does not require one to have the intent to defraud, but one has to have acted knowingly. Satisfying the act of ‘’knowingly” require that a person must have acted with recklessness and disregard. Based on this, the healthcare organizations must assume the responsibilities of preventing the presentation of false claims to the government. The health care organizations have the responsibility to act with honesty and in good faith while presenting their claims. They are to prevent the submission of any false claim to the government for payment because this will make them liable for a violation under the act. Section 3729 subsection (A) holds the management liable for knowingly presenting, causes to present or fraudulently claim for payment or approval ( Andrews, 2015 ). To avoid being held liable under the act, the health care organizations must act responsibly and with honesty while presenting a financial claim. They, therefore, have the duty to act with honesty and to lead in the prevention of any fraud within their organizations. The health care organizations also have the responsibility to present the right and accurate records and files for the claim. Under a subsection of the act in the liability provision, the management can be held responsible and liable for knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim, or conspiracy to commit a violation as under the subparagraph (A).
Also, the healthcare organizations have the responsibility to adhere to the requirements of the act and to ensure that no one conspires to violate the act. Section 3729(a) (1) (C) creates liability for those who conspire to violate the FCA ( Andrews, 2015 ). The management shall not conspire or collude with any other person with the aim of defrauding the government through the false claim. The management should not present the claims for the medical services and treatments that were never rendered or to claim for the treatment of patients who do not exist or who never received the services in the claim. The employees or the patients who act as whistleblowers are also protected under the act. When an employee or a patient reports a fraud, they are protected from harassment, suspension or any other form of discrimination that may be labeled against them.
Consequences for Breach
The violation of the False Claim Act can result in significant penalties and fines for the organization involved. The financial penalties that can be put to the organization or an individual for the breach include the recovery of three times the amount of the false claim. The organization or an individual involved in the violation shall pay the government three times the amount that had been defrauded ( Andrews, 2015 ). Also, there is an additional penalty of $5500 to $11000 for every claim. Any individual or organization that receives any benefit by means of fraud or makes a fraudulent statement shall be liable for a civil penalty which is equal to the amount received in addition to three times the damages caused.
An example of a case is United States v. Rogan, 517 F.3d (7th CIR. 2008 ) where Peter Rogan who was the principal manager at Edgewater Medical Center was accused of having conspired with others to defraud the government, and he had received financial beneficiary both directly and indirectly. Rogan and five others were indicted for fraud and many other crime-related bills that Edgewater had presented to the Medicaid and Medicare programs. The state filed a civil action against Rogan under the False Claims Act, 31 U.S.C 3729-33 for the conspiracy and having received benefits from the fraudulent presentation ( Grannemann , 2016). The Edgewater Medical Center was fined triple the amount in the claim, and Rogan received a civil penalty equal to the amount he had received in benefits from the fraudulent actions and three times the damages caused. I agree with the ruling because the False Claim Act, 31 U.S.C 3729 states that violation of the act shall attract treble damages plus penalty ( Youtt, Thomas & Robison, 2014 ). It also states that an individual who receives any benefit fraudulently shall be liable for a civil penalty equal to the amount received plus triple the damages caused.
Another case example is the United States ex rel. Martin v. Life Care Centers of America of 2012. Life Care Center of America operates a nursing home with more than 200 branches across the US. Life Care bills most of its services to Medicaid. The amount paid by Medicaid depends on the Resource Utilization Group (RUG) ( Grannemann, 2016 ). The organization had been sued for fraudulently inflating its RUG to receive more funds from the Medicaid and the argument of whether the extrapolation could be used to prove liability. Judge Mattice held that statistical extrapolation could be used to prove the liability. Life Care Center was fined triple the amount it had fraudulently received in addition to other penalties for damages. I agree with the ruling because False Claim Act, 31 U.S.C 3729-33 provides for such penalties for violation.
A third example of the case is Mikes v. Strauss, 274 F.3d 687(2nd Cir. 2001 ), where a whistleblower Dr. Mike brought a qui tam suit against the defendant Dr. Straus for submitting false requests for the reimbursement to the government for the spirometry services. The defendant was using invalid spirometry tests and billing the government for the services. The plaintiff was sued for violating the FCA through fraudulently claiming for invalid services ( Reich, 2016 ). It was held that a false certification of compliance could not be used on the basis of qui tam to sue under FCA if payments were not conditioned to that certification. I disagree with the ruling because the plaintiff filed a suit that the government was being defrauded for being charged for services that were not being provided. This amounts to a violation under the FCA and the defendant ought to have faced the consequences.
HCO Management’s remedial steps
One of the ways the management can use to reverse the non-compliance is to train all the staff on the requirements of the FCA and the consequences that arise for non-compliance. When all the staff members are aware of FCA requirements and the consequences for non-compliance, they will be keener to ensure they comply. Another method that can be used to increase compliance is to use modern technology in record keeping where all the services provided to the patients can be traced. Using modern technology in record keeping of all the services and billing for these services will increase the transparency and compliance with the FCA because all the services and billing are stored in a computer and can be easily followed up by anyone. The third method that can be used to increase compliance with FCA is to change the healthcare billing procedure. The process of billing process can be made in such a way that increases transparency in the whole system by involving many people in the procedure.
Conclusion
The existence of the FCA has played a key role in the regulation of fraud that was rising within the health care system leading to high health care costs for the government. Through the programs of Medicaid and Medicare, health care organizations have been inflating the bill they claim from the government, including the services not provided to increase their profits. However, FCA advocates for transparency and honesty in the whole billing process and anyone who fraudulently get benefits from the government shall face the consequences. This has instilled fear in many organizations forcing them to adhere to the FCA requirements due to the severance of the penalties involved.
References
Silberman, M. J. (2014). False Claims Act liability for CRNAs related to medical direction. AANA journal , 82 (1), 10.
Andrews, M. (2015). Whistling in Silence: The Implications of Arbitration on Qui Tam Claims under the False Claims Act. Pepp. Disp. Resol. LJ , 15 , 203.
Grannemann, S. (2016). Nursing Home Liability for Failure of Care under the Federal False Claims Act. Suffolk J. Trial & App. Advoc. , 22 , 329.
Reich, E. (2016). Supreme Court Reshapes the Landscape of False Claims Act Litigation. American journal of law & medicine , 42 (4), 862-864.
Youtt, M. W., Thomas, H. V., & Robison, A. (2014). False Claims Act Actions-The Developing Case Law regarding If and When Opinions of Medical Necessity Can Be Fraudulent. Health Law. , 27 , 36.
