The False Claims Act, as we discussed in our prior post, encompasses any government spending program. Our focus will be on the FCA as it specifically relates to healthcare fraud and abuse.
The FCA was amended again in 1993. Within that amendment the Attorney General announced that pursuing health care fraud and abuse would be a top priority for the Department of Justice. Through the use of this law, the government has obtained huge health care fraud settlements in recent years, and has paid sizable payments to private individuals who have sued on behalf of the government.
The government has used the False Claims Act to investigate a wide range of health care providers, from managed care organizations, pharmaceutical companies, and chains of hospitals, to physician practices, home health agencies and durable medical equipment suppliers. The government has also pursued the entities that assist plans and providers with health care transactions, such as billing companies, Medicare carriers, and fiscal intermediaries.
The False Claims Act has been applied in a wide variety of situations involving knowing, false claims, including by not limited to the following:
1. Claims for “medically unnecessary” health care.
2. Double-billing by one provider.
3. Duplication of billing by two providers: for instance, a physician who bills for an analysis of X-rays when a radiologist has already performed and billed the federal program for the analysis.
4. Billing for patients not eligible to receive a benefit such as home health or hospice.
5. “Un-bundling” of services required by Medicare rules to be “bundled.”
7. Improper administration of federal programs by fiscal intermediaries and carriers, including failure to process claims and correspondence in accordance with program agency guidelines.
8. Billing for ghost patients and other care not provided at all.
9. Allocating costs that should be covered by private insurers to a federal health program.
10. Refusal to provide medically necessary care covered under capitated fee arrangements. In other words, a provider indirectly represents that it is providing the services covered by a relevant contract or regulatory provisions when it knows that it is not. This conduct is also known as knowing “under utilization.” It often involves denial of authorization for care, failure to authorize care in a timely fashion, and causing network providers to deny care through the use of financial or other pressure.
The key to survival for many organizations in this current economic climate is to attempt to prevent fraud. Knowing the likely areas in which most fraud is committed and a financial analysis are two effective means to safeguard organizations and to enable them stay competitive and profitable