FALSE CLAIMS

ARH takes issues regarding false claims, fraud, and abuse seriously and encourages all employees, management, contractors, agents and those furnishing, or otherwise authorizing the furnishing of, Medicare and Medicaid health care items and services to be aware of the laws regarding fraud and abuse and false claims and to identify and resolve any issues immediately. 

The Federal government and the states of Kentucky and West Virginia have strict laws and regulations in place to prevent fraud, waste, and abuse of Federal and Federally funded health care programs.  These laws and regulations are specifically designed to prevent individuals from making false claims and statements in order to defraud Federally funded programs.    

The Federal False Claims Act includes whistleblower provisions that protect employees reporting violations of the Act from being discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action brought forward, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed.

ARH has specific policies and procedures and an Organizational Compliance Plan and program in place that address the laws and regulations described above.  ARH policy D-II-08 False Claims Statutes, provides a detailed description of the false claims statutes and their related protections.  The ARH Organizational Compliance Plan is the organization’s primary means for detecting and preventing fraud, waste, and abuse.  Policy D-II-08 can be viewed by following the hyperlink above and the Organizational Compliance Plan and policy D-II-08 can be made available upon request.  ARH employees, contractors, agents and those who furnish, or otherwise authorize the furnishing of, Medicare and Medicaid health care items or services are expected to review and abide by these policies.

Suspected false claims, fraud, abuse, or other compliance concerns can be reported to the compliance officer (CCRAO) for the ARH community they’re working in.  Likewise, reports can be made to the ARH System compliance officers located in the Legal Affairs Department in the Hazard System Center or to the Compliance Hotline at 1-888-800-2906.

FALSE CLAIMS ACT POLICY (D-II-08)

Policy Statement

Appalachian Regional Healthcare is committed to complying with all applicable federal and state laws and regulations.  To ensure compliance with such laws, ARH has policies and procedures and an active compliance program in place to detect and prevent fraud, waste, and abuse.  ARH also supports the efforts of federal and state authorities in identifying incidents of fraud and abuse.  In accordance with section 6032 of the Deficit Reduction Act of 2005, ARH facilities will ensure that all employees, including management, and any contractors or agents doing business with ARH are provided with detailed information about federal and state false claim acts and ARH policies and procedures for detecting and preventing fraud, waste, and abuse.

Procedure

Through distribution of this policy, ARH employees, contractors, and agents will be provided with detailed information about applicable false claim acts and ARH policies and procedures related to preventing and detecting fraud, waste, and abuse.

Applicable Laws and Policies and Procedures

Set forth below are summaries of certain statutes that provide liability for false claims and statements and a listing of ARH policies and procedures related to detecting and preventing fraud, waste, and abuse.  These summaries are not intended to identify all applicable laws, but rather to outline some of the major statutory provisions referred to by section 6032 of the Deficit Reduction Act of 2005.

False Claim Laws

One of the primary purposes of false claims laws is to combat fraud and abuse in government health care programs.  False claims laws do this by making it possible for the government to bring civil actions to recover damages and penalties when healthcare providers submit false claims.  These laws often permit quit tam suits as well, which are lawsuits brought by lay people, typically employees or former employees of healthcare facilities that submit false claims.

There is a federal False Claims Act, and there are also Kentucky and West Virginia laws that address fraud and abuse of each state’s respective Medicaid program.  Under the federal False Claims Act, any person or entity that knowingly submits a false or fraudulent claim for payment of United States Government funds is liable for significant penalties and fines.  The fines include a penalty of up to three times the Government’s damages, civil penalties ranging from $5,500 to $11,000 per false claim, and the costs of the civil action against the entity that submitted the false claims.  Generally, the federal False Claims Act applies to any federally funded program such as Medicaid and Medicare.

One of the unique aspects of the federal False Claims Act is the “qui tam” provision, commonly referred to at the “whistleblower” provision.  This allows a private person with knowledge of a false claim to bring a civil action on behalf of the United States Government.  The purpose of brining a qui tam suit is to recover the funds paid by the Government as a result of the false claims.  Sometime the United States Government decides to join the qui tam suit.  If the suit is ultimately successful, the whistleblower who initially brought the suit may be awarded a percentage of the funds recovered.  Because the Government assumes responsibility for all the expenses associated with a suit when it joins a false claims action, the percentage of funds recovered is often lower when the Government joins a qui tam claim.  However, regardless of whether the Government participates in the lawsuit, the court may reduce the whistleblower’s share of the proceeds if the court finds that the whistleblower planned and initiated the false claims violation.  Further, if the whistleblower is convicted of criminal conduct related to his role in the preparation or submission of the false claims, the whistleblower will be dismissed from the civil action without receiving any portion of the proceeds.

The federal False Claims Act also contains a provision that protects a whistleblower from retaliation by his employer.  This applies to any employee who is discharged, demoted, suspended, threatened, harassed, or discriminated against in his employment as a result of the employee’s lawful acts in furtherance of a false claims action.  The whistleblower may bring an action in the appropriate federal district court and is entitled to reinstatement with the same seniority status, two times the amount of back pay, interest on the back pay, and compensation for any special damages as a result of the discrimination, such as litigation costs and reasonable attorney’s fees.

A similar federal law is the Program Fraud Civil Remedies Act of 1986 (the “PCFRA”).  It provides administrative remedies for knowingly submitting false claims and statements.  A false claim or statement includes submitting a claims or making a written statement that is for services that were not provided, or that asserts a material fact that is false, or that omits a material fact.  A violation of the PFCRA results in a maximum civil penalty of $5,000 per claim plus an assessment of up to twice the amount of each false or fraudulent claim.

Kentucky

The Commonwealth of Kentucky has not adopted any false claims acts or statutes that contain qui tam or whistleblower provisions similar to those found in the federal False Claims Act.  It has, however, adopted a generally applicable Medicaid anti-fraud statute that makes it unlawful for a person to submit false and fraudulent claims to the Kentucky Medicaid program.  The statute also makes it unlawful for any person to present false information regarding an institution or facility so that if may be licensed or recertified as a Medicaid provider.  Violations of the statute are both civil and criminal offenses and are punishable by substantial fines and imprisonment.

West Virginia

The State of West Virginia has not adopted any false claims acts or statutes that contain qui tam or whistleblower provisions that are similar to those found in the federal False Claims Act.  It has, however, adopted a generally applicable Medicaid Fraud Control Act that makes it unlawful for a person to submit false and fraudulent claims to the West Virginia Medicaid program.  Violations of the Act are both civil and criminal offenses and are punishable by imprisonment and significant monetary penalties.

ARH Policies and Procedures

Employees, including management, and any contractors or agents of ARH should be aware of the organization’s policies regarding the detection and prevention of health care fraud and abuse and that the organization has an active compliance program designed for the prevention and detection of fraud and abuse.  These policies and procedures and ARH’s Organizational Compliance Plan can be accessed on the ARH Intranet. 

The following are some of the policies that are relevant to this policy and to the prevention and detection of fraud and abuse in ARH facilities:

  1. B-I-01 Code of Conduct
  2. B-I-02 Hotline Calls
  3. B-I-03 Response to Reports
  4. B-I-04 Fair Market Value

Reporting Concerns Regarding Fraud, Abuse, and False Claims

ARH takes issues regarding false claims and fraud and abuse seriously.  ARH encourages all employees, management, and contractors or agents to be aware of the laws regarding fraud and abuse and false claims and to identify and resolve any issue immediately.  Issues are resolved fastest and most effectively when given prompt attention at the local level.  ARH, therefore, encourages its employees, managers, and contractors to report concerns to their immediate supervisor when appropriate.  If the supervisor is not deemed to be the appropriate contact or if the supervisor fails to respond quickly and appropriately to the concern, then the individual with the concern should be encouraged to discuss the situation with the facility’s human resource manager, the facility’s CCRAO, another member of management, or with ARH’s Compliance Hotline (1-888-800-2906).