False claim act- corporate complaince

false claim act includes

1. Primary civil enforcement tool used by the federal government to combat health care fraud 2. Imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. 3. Imposes liability on an individual who knowingly submits a false record in order to obtain payment from the government

False Claims Act - Qui Tam

1. Provision allows a private person, known as a "relator," to bring a lawsuit on behalf of the United States 2.The "relator" information supports that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. 3.The "relator" does not have been personally harmed by the defendant's conduct. 4.The "relator" share in a percentage of the proceeds from a False Claims Act judgment or settlement

False Claims Action

1. Very detailed process for the filing and pursuit of these claims 2. Qui tam complaint must, by law, be filed under seal 3.United States Department of Justice, Local United States Attorney, 4.Assigned judge of the District Court

The New York False Claims Act

1."Knowingly" 2.Penalties 3."Qui Tam" Provisions

False Claims Action

1.AG or DOJ must "diligently" investigate the allegation 2.Usually requires the involvement of a law enforcement agency (OIG, Postal Inspection Service, FBI, IRS) 3.When State agencies may be potentially victims of the False Claim the States AG's with expertise and interest will assist the Feds with the investigation

False Claims Actions

1.After the "relator's" complaint is unsealed, the "relator" has the obligation under the Federal Rules of Civil Procedure to serve its complaint upon each named defendant within 120 days. 2.Each named defendant has the duty to file an answer to the complaint or a motion within 20 days after service of the government's complaints. Discovery under the Federal Rules of Civil Procedure begins shortly thereafter.

False claims act additional information part 2

1.Allow for actions for claims against state and local governmental programs that receive indirect funding from the federal government a.Conspiracy liability b.Broader array of transactions c.Expands protection of whistleblowers 2.Allocates substantial funding to antifraud enforcement agencies over $500 million to numerous federal agencies to fund additional investigations and prosecutions of fraudulent claims.

Investigation Techniques

1.Civil: Subpoenas for documents or electronic records, witness interviews, compelled oral testimony , consultations with experts 2.Criminal: Search Warrants, interrogations, wire taps

false claim act additional requirements

1.In addition to the complaint filed with the District Court, the "relator" must submit to the Department of Justice a "disclosure statement" 2.Substantially disclosing all the evidence in the possession of the "relator" about the allegations in the complaint. 3.Disclosure statement is not filed in any court, and is not available to the named defendant

Intervention by the Department of Justice in a qui tam case is not undertaken lightly:

1.Intervention requires approval by the Washington office 2.Part of the decision process takes into consideration the solicited views of the investigative agency and a detailed memorandum discussing the relevant facts and law is prepared. This memorandum usually includes a discussion of efforts to advise the named defendant of the nature of the potential claims against it, any response provided by the defendant, and settlement efforts undertaken prior to intervention. This memorandum is considered to be attorney work product exempt from disclosure.

Failure to Comply with Medicaid Program Standards

1.Monetary penalties 2.Criminal sanction 3.Administrative sanction 4.Penalty 5.Recoupment

Upon intervention approval, the Department of Justice files:

1.Notice of intervention, defining the specific claim(s) to which the United States is intervening 2.Motion to unseal the qui tam complaint filed by the "relator" (including any amended complaint) and the notice of intervention. All other documents filed by the DOJ up to that point remain under seal.

False claim act consequences

1.Offenders may be liable for penalties ranging between $5,000 and $10,000 for each false claim filed plus three times the amount of damages the government sustains because of the act. 2. An additional serious consequence for health care organizations found guilty of violating the False Claims Act is the possibility of mandatory exclusion from the Medicare and Medicaid programs 3. Includes an legal tactic - "qui tam" provision (from a Latin phrase meaning "he who brings a case on behalf of our lord the King, as well as for himself").

new york state

1.Office of the Medicaid Inspector General (OMIG) 2.The New York State False Claims Act - 2007 State Finance Law §187 3. Prohibits two actions: a.Presenting false claim b.Making a false record

false claim additional information

1.Redefine Claim to include claims submitted to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government's behalf, or to advance a Government program or interest. 2.Explicitly gives the Government and whistleblowers the ability to pursue subcontractors and contractors with grantees for the claims they submit to contractors and grantees. 3.Significant effect on health care providers who contract with Medicaid or Medicare managed care plans, who will now have liability to the United States under the Act

Additional facts

1.Redefines "obligation" to include "an established duty" arising from a variety of relationships 2.Specifically includes obligations "arising from statute or regulation 3.Obligation from the retention of an overpayment. 4.This change allows the government and whistleblowers to pursue violations of regulatory statutes with penalty provisions as False Claims Act cases and to pursue false documents which are "material to an obligation to pay or to transmit money...to the Government" regardless of whether a false claim has been submitted. For example, a physician who creates backdated medical records to support a claim already submitted could be liable under this provision.

Established mandatory compliance programs for providers:(Social Services Law §363-d)

1.Regulated by Public Health Law Article 28, Article 36 & and Article 31 a,Who receive a "substantial portion of their business operations" from the Medicaid program.

Additional Options for the DOJ

1.Settle the pending qui tam action with the defendant prior to the intervention decision. (included in the 25% intervention rate). 2.Advise the "relator" that the Department of Justice intends to decline intervention. This usually, but not always, results in dismissal of the qui tam action.

False claim prerequisites

1.The complaint and all other filings remain under seal for at least 60 days. 2.Secret docket by the Clerk of the Court 3.DOJ must, if it wants the case to remain under seal, file a motion with the District judge showing "good cause" why the case should remain under seal.

False Claims Actions

1.The decision by the Department of Justice to intervene in a case does not necessarily mean that it will endorse, adopt or agree with every factual allegation or legal conclusion in the "relator's" complaint. 2.Usually the DOJ will file its own complaint about 60 days after the intervention 3.Statement of the facts that show the knowing submission of false claims, and the specific relief it seeks 4.The DOJ has the ability to, and frequently will, assert claims arising under other statutes (Truth in Negotiation Act, Anti-Kickback Statute) - "relators" do not have the legal right to assert these complaints, they lack the 'qui tam provision' asserted on the False Claims Act.

False Claims Actions

Although not official - the length of time the average qui tam case remains under seal. Most intervened or settled cases are under seal for at least two years (periodic reports to the supervising judge concerning the progress of the case are required w/ appropriate justification for the need for additional time).

false claim act

Anyone who 'knowingly' submits or causes the submission of a false or fraudulent claim to the United States. 1863 FCA a.k.a Lincoln Law

False Claims Action

Court may, upon motion by the United States Attorney, make the complaint available to other persons as necessary to determine whether the United States will intervene in the action or not.

Fraud enforcement and recovery act

Expands the U.S. Attorney General's authority to issue civil investigative demands and broadens the government's authority to share documents obtained through subpoena with qui tam 'relators' and others

Fraud enforcement and recovery act part 2

Expands the anti-retaliation provisions from employees to include "contractors and agents" who "act to stop one or more violations." This provision could protect contracted physicians in a government-funded managed care plan, for example, who took action to stop false reporting or illegal denial of services by the plan.

Increased Risk of Investigation & Liability

False claims or inaccurate encounter data, quality of care information or other reports submitted to a Medicare Advantage Plan, Medicaid Managed Care Plan, or Medicare Part D Plan are now within the scope of the False Claims Act.

Fraud Enforcement & Recovery Act

May 20, 2009 President Obama signed into Law FERA aimed at curtailing mortgage & banking as well as fraud against the Federal Stimulus Act.

Conclusion of Investigation (or at the direction of the court) >Intervention Decision > DOJ options:

Option #1 Intervene in one or more counts of the pending qui tam action. This intervention expresses the Government's intention to participate as a plaintiff in prosecuting that count of the complaint. Fewer than 25% of filed qui tam actions result in an intervention on any count by the Department of Justice. Option #2 Decline to intervene in one or all counts of the pending qui tam action. If the United States declines to intervene, the "relator" may prosecute the action on behalf of the United States, but the United States is not a party to the proceedings apart from its right to any recovery. This option is frequently used by "relators" and their attorneys Option #3 Move to dismiss the "relator's" complaint, either because there is no case, or the case conflicts with significant statutory or policy interests of the United States.

Impact on healthcare:

Section 4 Significance for health care providers, managed care plans, and all Medicaid providers Clarifications to the False Claims Act to Reflect the Original Intent of the Law

Defending a False Claims Matter

The cost of defending and potentially settling a False Claims action has been increased because defendants are now obligated to pay the government's costs in most instances

Any claims that has been submitted and not dismissed the statute of limitations

does not apply to the government - negative impact on health care organizations/providers due to government delays

Introduced 'materiality requirement'

pertains when one "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim. "Material" is defined as "having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property

Health care organizations

should anticipate greater scrutiny of their vendor relationship -whether as the provider or recipient of services