Most healthcare providers act in good faith and wouldn’t charge for services or treatments they didn’t provide. Unfortunately, such incidents of fraud happen, which is the reason for the False Claims Act in Healthcare. We’ll explore this act in more detail, including the False Claims Act healthcare penalties, and discuss how you can keep your organization compliant with this regulation.
What Is the False Claims Act in Healthcare?
The federal False Claims Act in Healthcare outlaws knowingly submitting a false claim to Medicare or other federal program for payment. The term knowingly means that the individual has prior knowledge of the inaccuracy or should have known it was fabricated. Examples of false claims include but aren’t limited to:
- Billing for services or products the provider didn’t deliver
- Billing separate services that should be bundled
- Upcoding, which is using a billing code reflecting a higher payment rate than what a provider should assign for that service or good
- Billing for unnecessary medical services or treatments
- Billing for outpatient services provided within 72 hours before or after an inpatient stay
- Billing for a hospital discharge when transferring a patient to a rehabilitation facility
Submitting a false claim to Medicare or Medicaid for payment is not the only way to violate the False Claims Act in healthcare. A provider may knowingly falsify or conceal statements or fabricate records they or another person or entity later uses to file a false claim to Medicare or Medicaid.
There is also a civil False Claims Act in healthcare, which doesn’t require proof of intent to defraud. In civil cases, knowing implies having accurate knowledge and acting with careless indifference or deliberate ignorance when presenting false information.
In light of constant cyber threats, the U.S. Department of Justice (DOJ) is diverting more attention to cyber-related fraud by federal contractors and funded researchers. The DOJ may enforce the False Claims Act by going after covered organizations and third-party vendors who knowingly:
- Misrepresent their cybersecurity practices
- Deliver sub-standard cybersecurity protection
- Fail to monitor and report health information breaches in compliance with regulations
Since fees and other payment information for goods and services are public, your organization’s providers must ensure that the information in their Medicare claims is accurate and that they’re billing appropriately. If anyone in your facility is unsure how to bill or file a claim correctly, they should ask for help or contact the payer directly.
False Claims Act in Healthcare: Penalties for Violations
The Office of Inspector General (OIG) under the U.S. Department of Health and Human Services (HHS) enforces the False Claims Act in healthcare and imposes penalties for breaking the law. Violators may be subjected to fines, criminal penalties, and even incarceration. It’s not unheard of that physicians receive jail sentences for their part in submitting false claims to Medicare.
Penalties for civil violations include fines up to three times a program’s loss plus over $11,000 for each false claim filed. In civil cases, each item or service falsely billed counts as an individual claim, which allows multiple penalties to add up.
In addition to False Claims Act healthcare penalties, there are incentives for reporting fraud. Under the “whistleblower recovery” clause, a person who reports a criminal act of Medicare fraud may get 15-30% of the damages the government recovers from the individual committing the act. The whistleblower’s tip must be instrumental in catching the fraud for them to receive any portion of the recovery.
In civil cases, a whistleblower can file a lawsuit as a private individual on behalf of the United States. The suing whistleblower can be a patient, hospital staff member, business partner or ex-partner of the defendant, or competitor. Winning or settling the case can entitle the plaintiff to a portion of the recovered funds.
Stay Compliant With Software Support
Maintain compliance with the False Claims Act by keeping up-to-date with the latest Medicare regulations and turning to support when needed. Software from Compliancy Group offers specialized training modules in fraud, waste, and abuse training, some of which culminate in continuing education credits.
