An often-used weapon in the government's arsenal is the False Claims Act. Simply stated, if a health care provider submits a claim for payment to any federal governmental payer, including Medicare or Medicaid, that is false or fraudulent with knowledge that the claim is false or fraudulent, the health care provider can be held liable under the False Claims Act. Each of three elements – a claim, false or fraudulent submission, and knowledge – has to be proved. Further, the knowledge element includes actual knowledge, deliberate ignorance or reckless disregard. Thus, due to the complexity of billing for medical services, risk under the False Claims Act is present for all health care providers.
The penalties for a False Claims Act violation are steep. Civil penalties of $5,500 to $11,000 per claim, plus treble damages, can be assessed. Some False Claims Act settlements and judgments have soared to hundreds of millions of dollars. Furthermore, health care providers risk possible exclusion from the Medicare and Medicaid programs.
In addition to the Federal False Claims Act, many states have adopted state false claims statutes. Many of these statutes have the same elements and penalties as the Federal False Claims Act. Moreover, the Deficit Reduction Act of 2005 requires states to amend their Medicaid plans to require covered health care entities to establish written employee policies regarding false claims recovery.
Baker & Daniels and B&D Consulting, a division of the law firm located in Washington, D.C., have assisted clients in mitigating False Claims Act risks. We also have represented clients involved with False Claims Act investigations and litigation.
Baker & Daniels’ professionals also frequently speak on the topic of the False Claims Act. For a PowerPoint Presentation on the False Claims Act, click here (1mb).
To view the text of the False Claims Act, click here (requires Adobe Acrobat Reader).