DEPARTMENT OF HUMAN SERVICES FALSE CLAIMS DETECTION AND REPORTING GUIDELINES FOR CONTRACTORS AND EMPLOYEES
Background and Introduction
Section 6032 of The Deficit Reduction Act of 2005 (DRA) (see 42 USC 1396a(a)(68)) requires all entities that receive or make annual payments under the Medicaid State Plan of at least $5,000,000 to establish written policies for all employees of the entity and for all contractors of the entity that provide detailed information about the federal False Claims Act (see 31 USC 3729-3733), administrative remedies for false claims and statements (see 31 USC 3801-3812), and other state and federal laws that relate to the prevention of Medicaid (and other federal programs) related waste, fraud, and abuse. The DRA also requires any employee handbook maintained by the entity to include a specific discussion of the law and the rights of employees under it as well as the entity's policies and procedures for detecting and preventing fraud, waste, and abuse. Additional information regarding these requirements is provided below.
FEDERAL FALSE CLAIMS ACT
The False Claims Act (FCA) is a federal statute that imposes civil liability on persons (including organizations and other entities) who file or cause another to file a false claim for payment with the United States Government (Government), including the Utah Medicaid program. The term "claim" as used in the FCA includes any request or demand for money or property for which the Government provides or will reimburse any portion of the money or property requested. Examples of the types of claims for which a person may be held liable under the FCA include, but are not limited to, the following:
- Submitting falsified medical records;
- Billing for services not rendered or goods not provided;
- Double billing - Charging more than once for the same goods or services;
- Billing for, certifying, or prescribing services that are not medically necessary;
- Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid;
- Charging for employees that were not actually on the job, or doctoring timesheets to bill for hours not worked in order to maximize reimbursements;
- Billing for marketing, lobbying or other non-contract related contractor activities; and
- Billing for costs not related to a grant recipient's grant.
As can be seen from above list, the terms of the FCA are broad and encompass a wide variety of false claims. Given this fact, the FCA is a valuable tool for helping to maintain the integrity of Medicaid and other federal programs.
Liability under the FCA attaches when a person knowingly submits or causes someone else to submit a false or misleading claim for government funds. As used in the Act, the term "knowingly" means the person is actually aware of the falsity of the claim or the person has acted in deliberate ignorance or reckless disregard of the truth or falsity of the claim. In other words, a person who submits a claim that the person knows or should know is false is liable under the FCA. It is not necessary to prove the person had any specific intent to defraud.
Penalty and Damages
Persons who violate the FCA's provisions may be liable for: 1) a civil penalty (of not less than $5,000 but not more than $10,000); 2) damages (equal to three times the amount of the damages sustained by the government); and 3) the costs of the civil action brought to recover the assessed penalties and damages. In addition, persons may be subject to more severe civil and criminal penalties pursuant to 42 USC 1320a-7a and 7b.
Qui Tam (“Whistleblower”) Actions
Although the U.S. Attorney General's office is charged with investigating and bringing civil actions against persons suspected of violating the FCA, the Act also contains qui tam or whistleblower, provisions. Qui tam is a unique mechanism in the law that allows private individuals who are aware of fraud against the Government to bring suit on behalf of the Government for the recovery of the stolen funds. As an incentive for bringing a qui tam action, the individual bringing suit (whistleblower) is entitled to a portion of the recovery. Under the FCA, private individuals who bring suit must notify the Government and give it an opportunity to investigate and proceed with the action, before proceeding on their own. If the Government elects to proceed with the matter, the individual is entitled to 15 to 25 percent of the proceeds recovered, depending on the extent to which the individual contributed to the suit's prosecution. If the Government elects not to proceed with the matter, the individual bringing suit is entitled to not less than 25 percent and not more than 30 percent of the proceeds recovered plus his or her reasonable and necessary expenses, attorneys’ fees and costs. (It should be noted, however, that if the defendant named in a private individual's suit prevails, the individual may be required to pay the defendant's expenses, attorneys’ fees, and costs if the court finds the suit was "clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment".)
The FCA also provides employees, contractors, or agents with protection against retaliation in employment for coming forward to report suspected fraud, waste, or abuse. A whistleblower who is harassed or discriminated against in any way in the terms or conditions of his or her employment because of his or her lawful acts in an FCA action has the right to be made whole. The relief available to whistleblowers includes reinstatement of their job, two times the amount of back pay to which they may be entitled plus interest, and compensation for any special damages sustained including litigation costs and reasonable attorneys’ fees.
UTAH FALSE CLAIMS ACT
Utah also has a false claims act. The Utah False Claims Act (Utah Act) provides for the imposition of both civil and criminal liability for filing of a false claim for medical benefits in the State. For purposes of the Utah Act, the term "medical benefit" means "a benefit paid or payable to a recipient or a provider under a program administered by the state under:
(a) Titles V and XIX of the federal Social Security Act;
(b) Title X of the federal Public Health Services Act;
(c) the federal Child Nutrition Act of 1966 as amended by P.L. 94-105; and
(d) any programs for medical assistance of the state."
Liability under the Utah Act extends to individuals, corporations, unincorporated associations, professional corporations, partnerships, as well as other forms of business associations.
The citation for the Utah False Claims Act is Utah Code Annotated, Title 26, Chapter 20.
UTAH WHISTLEBLOWER PROTECTIONS
The Utah Protection of Public Employees Act protects public employees who report in good faith actual or suspected fraud, waste, or abuse from adverse action by their employer. An employee who alleges a violation of this Act may bring a civil action in district court for injunctive relief, actual damages incurred, or both. Furthermore, if the aggrieved employee prevails in its action, the court may also award all or a portion of the costs of litigation, including reasonable attorney fees and witness fees.
The citation for the Utah Whistleblower Act is Utah Code Annotated, Title 67, Chapter 21.
DHS PROCESSES AND PROCEDURES FOR DETECTING AND PREVENTING FRAUD, WASTE, AND ABUSE
Some of the specific processes and procedures employed by the Department of Human Services (DHS) to detect and prevent waste, fraud, and abuse of Medicaid and other government funds include:
1. Conducting internal audits to ensure the existence of and adherence to necessary internal controls;
2. Including language in contracts to hold contractors accountable for providing contracted services in accordance with applicable federal and state requirements;
3. Monitoring contractor programs to ensure contractor compliance with Medicaid and other contract requirements;
4. Reviewing contractor billings;
5. Investigating contractor programs when waste, fraud, or abuse is suspected or detected;
6. Pursuing the collection of false or fraudulent claims;
7. Working with the Utah Attorney Generals' office to prosecute the perpetrators of fraud or abuse when it is discovered;
8. Providing education and training on fiscal monitoring as well as fraud prevention and detection procedures; and
9. Maintaining a fraud reporting hotline; and
10. Educating employees about the DRA and the FCA in New Employee Orientation.
The following DHS Policies may be accessed at: http://www.hspolicy.utah.gov/
Policy 03-02: Contractor Financial Reporting Requirements and Monitoring and
Policy 03-03: Reporting Medicaid and Other Fraud, Waste, or Abuse
Policy 05-03: Provider Code of Conduct (Part V)
The DHS Service Contract Template may be accessed at:
REPORTING MEDICAID FRAUD, WASTE, OR ABUSE
Suspected or actual fraud, waste, or abuse in DHS programs or services shall be reported to the DHS Bureau of Internal Review and Audit (BIRA). Reports may be made via the DHS Fraud Hotline 801-538-8261 or by contacting the Director of BIRA.
Reports of fraud, waste, or abuse may also be reported to any of the following entities as appropriate:
1. DOH Medicaid Fraud Hotline: 801-538-6155 or 1-800-662-9651
2. Utah Attorney General: 801-538-9600 or 801-281-1259
3. Office of Inspector General's National Fraud Hotline: 1-800-447-8477