What is the False Claims Act?
The False Claims act makes it unlawful to submit fraudulent claims to the government. The penalty for submitting false claims is up to three times the amount the government paid you plus $2000 for each false claims you made. True to its name, the Act of False Claims restricts workers from the submission of fraudulent claims. Put simply, this act is meant to ensure that healthcare practices do not charge the government for acts they didn’t commit or services they haven’t provided. Healthcare practices are generally able to submit their claims through Medicare, or in some cases, Medicaid. These claims are ostensibly bills in exchange for services for patients or goods provided to them. The federal government’s insurance programs deal with the healthcare costs contingent upon the services.
Brad Nakase, Attorney
1. The Federal Claims Act Has Two Categories
Two components make up the FCA. The first is civil, and the second is criminal.
a. Civil Fraud
Based on the civil component, an individual can be found culpable of making false or dishonest claims, even if they did not try to deceive the federal government on purpose. This first component is in place in order to defend the federal government from being overcharged.
For example, let’s say a doctor bills a government healthcare program with a listing of ten services that he or she performed. Although the bill posits that they conducted all of these items, the doctor was only directly involved in five of the services. The doctor has then made false claims.
The civil component of the FCA would be instituted here because perhaps the doctor did not mean to bill the government for all of these services. Maybe it was an oversight or an error on their part. In this case, the government still does not want or need to take responsibility for all of these billed acts, so the FCA would be placed into effect.
Each of the five items, therefore, would count as one individual claim. Each of the five false claims would initiate a fine, and civil FCA fines can stretch up to triple the federal program’s losses. Additionally, filed claims can cost up to $11,000 each.
At the same time, the civil component of the FCA also carries with it a provision for whistleblowers. This means that a wide range of people, from business partners to patients, to staff members and even competitors, could report the doctor’s claims, which at this point are alleged to be false. The whistleblower, whoever they are, would then be entitled to a certain percentage of any lawsuit against the doctor, as well.
b. Criminal Fraud
The second component increases in severity as well as a consequence. The criminal component also has more dire ramifications in regards to provisions and potential fines. This part of the FCA features healthcare workers who try to deceive the government on purpose.
How about another example to clarify how this might work? Let’s say a surgeon sends a bill to the government, complete with the itemized medical services alleged to be completed. However, the truth is that the surgeon invented the services, then claimed a right to reimbursement, with full knowledge that said acts were entirely fake and never happened.
Situations like this do occur, and when the government finds the surgeon guilty, he or she can face the prospect of significant jail time. According to the US code, penalties such as this can lead to 10 years of federal prison time and fines of $100,000, as well as the seizure of a medical license.
2. False Claims: Scenarios
Instances of fraud in the healthcare field are fairly widespread and can involve both groups of workers or specific individuals who attempt to deceive the government through misrepresentation of their services. Here are a few specific situations to be aware of.
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False Bills for Services or Goods
It is forbidden for medical practitioners or others in the field to submit false claims, for example:
- Services not performed
- Treatments not offered
- Diagnostic tests that were not conducted
- Medical devices that were not used
- Pharmaceuticals that were not prescribed
Sometimes, individuals are tempted by the profits that may come from these dishonest claims, but they should remember that the fines they will be saddled with can cost up to triple the cost of the initial loss.
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False Medical Necessity Certificates, Billing for Unnecessary Medical Services
It is entirely illegal to bill insurance for extraneous medical services. If the government finds out that someone has charged a federal insurance company for an exam or medicine that a patient didn’t need, they will charge them for this false claim.
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Separate Billing for Services—Only When Necessary
It is crucial for those in the medical field to combine separate bills together whenever possible. In some instances, physicians have defrauded the federal government by splitting bills apart instead of including all available bills in one package of a single service. If it is possible to combine bills, it should be done, even if more of a profit can be made from billing separately.
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Falsifying Treatment Plans / Medical Records
Some doctors have created false plans or records in order to validate payments. Be aware that creating false documents is forbidden and can bring severe charges upon yourself and your practice. This may be under the second component of criminal actions.
3. Misrepresented Diagnoses / Procedures in Order to Maximize Profit
It may seem unbelievable, but some physicians have misrepresented their patients’ diagnoses. They have exaggerated their patients’ conditions or changed them in order to increase the return that would be received from the insurance provider. Schemes like this are related to the act of creating false medical certificates.
4. Misrepresented Charges / Entitlements on Cost Reports
Another method to achieve fraud is under the same category as bills for false services or goods. Fraudulent doctors can get falsity entitlements to monetary reimbursements.
5. “Kickbacks” for Services and/or Goods
Our laws explicitly prohibit physicians and doctors from getting “kickbacks” or solicitations. Kickbacks—usually in the form of money—are usually made when a physician refers a patient to a federal program for referring patients to government health programs.
For example: if a doctor encourages a patient to go to a certain facility, and that facility bills Medicaid, then the facility could pay the doctor for the referral. This is a blatant example of fraud in the healthcare field and is forbidden by law.
6. A Reminder to Behave with Honor
It is important to remember that colleagues, patients, and others can and will report physicians for creating false claims. Fraudulent behavior is unfortunately common but cannot and will not be tolerated, especially in a field dedicated to helping people. While false claims do continue each year, the FCA is an act that is committed to helping those who fall victim to it.
If you feel you have been taken advantage of in any way or have knowledge of the fraudulent behavior covered here, it is up to you to make a difference. Please contact our legal team at Nakase Wade today so that we can provide free consultation as well as expert legal assistance. Fraudulent behavior in the medical field impacts all of us, and we are eager to help.