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We shall only employ or contract with individuals or entities with proper credentials and expertise. All employees or contracted individuals will adhere to all applicable laws, regulations, policies and guidelines necessary to perform. Regular training on these guidelines will be provided.
No employee or contracted individual should alter their objectivity or professional standards to any individual. If significant differences of opinion in professional judgment arise, they should be brought to the attention of management for resolution.
Cooper Kids Therapy Associates assures that anyone making reports of suspected violations of this Code of Business Conduct and/or the standards set forth in our Medicaid Compliance Programs’ policies and procedures can do so without fear of reprisal or retaliation, and that confidentiality will be protected within the limits of the law.
Employees and those acting on behalf of Cooper Kids Therapy Associates are required to disclose any actual or potential conflicts of interest and seek guidance on how to handle such situations. A conflict of interest is any situation in which financial or other personal considerations may compromise or appear to compromise: (1) the business judgment of any employee or other party engaged by us; (2) the delivery of service; or, (3) the ability of an employee to do his or her job. An actual or potential conflict of interest occurs when an individual is in a position to influence a decision that may result in a personal gain for that person at the expense of the best interest of Cooper Kids Therapy Associates and/or the children and families we service.
Business dealings with outside entities (families, schools, school districts, etc.) should not result in unusual gain for those entities, Cooper Kids Therapy Associates or an employee. “Unusual gain” refers to bribes, product bonuses, special fringe benefits, unusual price breaks, and other windfalls designed to ultimately benefit the employer, the employee, or both.
It is the responsibility of all those performing duties for Cooper Kids Therapy Associates to maintain the organizations integrity and reputation. All such duties will be conducted in an honest and professional manner, promoting trust in the organization. Representatives will not pursue any business opportunity or take any action that will require the organization to engage in illegal or unethical behavior.
Employees or contracted individuals who perform billing and/or coding of claims must take every reasonable precaution to ensure that their work is accurate, timely, and in compliance with all federal and state laws, as well as in compliance with the company’s policies and procedures regarding such billing.
As a condition of employment, all service providers, employees, and contracted individuals must comply with this code of business conduct, and all established standards, policies, and procedures, as set forth in the Corporate Medicaid Compliance Policy and Procedure manual.
All problems or suspected violations must be communicated to management. The Cooper Kids Therapy Associates Corporate Medicaid Compliance Policy details appropriate contact information, including title, telephone numbers, investigative procedures, resolution, monitoring, disclosures, system complaints, parent complaints, health and safety, incident reporting, and all relevant federal and state law mandates/regulations.
Cooper Kids Therapy Associates encourages good faith participation in our compliance program and expects all employees and contractors to adhere to our Code of Business Conduct. Disciplinary policies will be enforced for any/all of the following behaviors:
1. Failing to report suspected problems;
2. Participating in non-compliant behavior; and/or
3. Encouraging, directing, facilitating or permitting non-compliant behavior.
Violations will be examined on a case by case basis and consequences can include, but not be limited to, the following:
1. Reprimand
2. Job reassignment
3. Termination
Our disciplinary policy shall be fairly and firmly enforced.
Cooper Kids Therapy Associates (“CKTA”) has implemented a Compliance Program (“Program”) to assist CKTA in maintaining, and legal counsel in rendering legal advice regarding, compliance with the numerous laws, regulations and policies that govern the conduct of CKTA. It is the goal of CKTA to maintain an institutional culture that promotes the prevention, detection and resolution of potential instances of non-compliance.
As part of the CKTA Program, CKTA has appointed Marissa Martin as the Medicaid Compliance Officer to aid in identifying any potential areas of non-compliance, to assist in investigating areas of concern, and to remedy detected areas of non-compliance. She is responsible for the daily implementation of our plan as well as the ongoing education of our active employees and contractors. The Medicaid Compliance Officer reports to the Director of Cooper Kids Therapy Associates, Ellen Cooper.
We have worked closely with a software specialist to implement a computer program for billing Early Intervention and Preschool services and evaluations to ensure the necessary safeguards and controls. On an ongoing basis we work with the software specialist to fine tune the program to meet any changes in Early Intervention and/or Preschool requirements.
The computer program we use is called “CLAIMS” (County Linked Agency Information Management System) and it allows us to input not only the date of the therapy session, but also the exact time. We are able to monitor if a therapist billed a session for two children at the same time or if there is any overlap of session times. It also automatically adds up the minutes per child for service coordination billing to ensure that there is no erroneous over- billing caused by data entry errors. Our software system displays a calendar for each child each month and will show an alert on the screen if a therapist went over the authorized number of sessions or if there are too many sessions on a day or a week. The program clearly highlights any children that did not receive service in a particular month, or for any extended period of time that exceeds allowable amount of absences as prescribed by a child’s IFSP/IEP, which allows us to immediately investigate the reason.
Reporting capabilities allow us to track and investigate any children who do not receive a particular service for any extended period of time.
All employees are trained on the use of our computer software, as well as on our company internal billing procedures. Training is conducted on an ongoing, as needed basis.
Employees that process billing and claims are trained on the following procedures on an ongoing basis:
1. Check each log note for parent signature, therapist signature, date, time, ICD-9 code, CPT code. Billing cannot be entered without all of those items in place.
2. Enter times and dates into the appropriate child’s calendar accurately. If there is a time conflict amongst the sessions that a therapist is billing, you must immediately contact the therapist to let him/her know the session is not billable without an accurate time.
3. Check the authorized frequency of the service you are entering. The number of times the therapist went in each week and/or month must match the child’s authorized frequency.
4. If a therapist submits an extra session in any given week, then he/she must label the session a makeup and indicate the date he/she is making up. Click through the previous calendars and look to see if the therapist did ever miss a session. If a makeup session is not owed, we cannot enter it, cannot bill it, and cannot pay the therapist for it.
5. If the therapist misses a session in any given week, then he/she must indicate with a blank session note the date that was missed. If he/she did not do that, then the therapist has to let you know the date that was missed so that you can write it on a blank session note or in the allotted space at the bottom of the new session notes.
6. Any changes to session notes, and/or any corrections to session notes, have to be initialed and dated by the provider. Changes and/or corrections to the date of a session are not allowed in any way, shape, or form. If an error is made to the date of a session, the provider is required to get an entirely new note signed by the parent/caregiver so that the parent/caregiver is also aware of the change and/or correction and by signing is able to verify the accuracy of said change/correction.
Employees communicate compliance issues directly to the therapist via telephone and/or email. Compliance findings are emailed to the therapist as well as the CKTA Office Manager, Joanne Rau. Ms. Rau reviews compliance findings and copies of communications are filed internally under “Medicaid Compliance Findings.”
Employees have access each day to our Office Manager Joanne Rau and our Compliance Officer, Marissa Martin. Employees are trained to go directly to her with billing questions and/or issues on a daily basis.
CKTA Billing Department meets at least quarterly to review and refresh billing procedures.
Our software program allows CKTA to accurately record and track therapist compliance and credentialing. CKTA only contracts with therapists and providers that are properly certified and/or licensed, have NYS Department of Health Approved Early Intervention provider status, and are cleared through the NYS Central Registry. In addition, we keep the following documents in our provider personnel files:
• Resume
• Two letters of reference
• Copy of License – required from an ST, OT, PT, SW, etc.
• Copy of Certification – required from a Special Ed teacher
• Copy of NYS Dept. of Health EI Approval Letter and/or Profile
• Medical performed within the last year w/results of PPD test and Immunization History
• Malpractice Insurance
• Providers must send proof of attendance for at least 2 in-services/continuing ed. courses per calendar year.
• Cleared by State Clearance Registry of Child Abuse and Neglect
CKTA does not employ or contract with persons excluded from the Medicaid Program. We do not allow excluded persons to provide or to direct the ordering or delivery of services or supplies, or to undertake administrative duties. CKTA screens potential providers prior to contracting with him/her. All providers, potential and/or contracted, new and current employees, and referral sources, are screened on a monthly basis through the following three exclusion lists:
• NYS OMIG
• Federal OIG
• The Justice Center Staff Exclusion List
In addition, if a potential contractor’s resume indicates the individual resides and/or has resided in the past in a state other than New York, CKTA will screen the contractor through that particular state’s exclusion list.
CKTA Medicaid Compliance program prohibits the employment of individuals who have been recently convicted of a criminal offense related to health care or who are listed as debarred, excluded or otherwise ineligible for participation in Federal health care programs. With regard to current employees or independent contractors, if resolution of a matter results in conviction, debarment, or exclusion, then CKTA will remove the individual from our company.
Any and all verified hits on current employees and current contractors from any exclusion list are reported to OMIG through disclosure protocol.
All Medicaid Compliance Findings are reviewed and charted. The Compliance Officer, in conjunction with the CKTA Compliance Committee, shall determine the appropriate level and manner of any investigation to be undertaken in response to a report. The Compliance Officer also shall ensure that all investigations are conducted promptly and thoroughly, with the assistance of legal counsel where appropriate. The Compliance Officer shall maintain any materials generated as part of an investigation so as to preserve the confidentiality of such materials and safeguard any applicable legal privilege that may attach to the materials and investigation. Upon conclusion of an investigation, the Compliance Officer shall make any necessary reports and shall ensure that appropriate remediation and corrective action is undertaken.
All Medicaid Compliance Findings are sent to the service provider in writing and he/she is made aware of the fact that we are documenting the finding. These finding are not billed, however Cooper Kids Therapy Associates looks for patterns of continued findings from the same service provider. This documentation simultaneously provides us a way of tracking patterns as well as resolving the issue by letting the service provider know we are not billing the County for the session(s).
If a pattern of continued findings is identified, the Medicaid Compliance Officer will contact the service provider directly and let them know that we have identified a pattern and if continued infractions occur we will be taking disciplinary action. Disciplinary action includes, but is not limited to, the following:
1. Removing the service provider from one or more of his/her cases.
2. Lowering the number of service cases offered to the service provider.
3. Terminating our contract with the service provider.
4. Reporting the service provider to the Office of the Medicaid Inspector General by calling 1-877-87FRAUD.
If a report of fraud is made to Cooper Kids Therapy Associates, the Medicaid Compliance Officer immediately makes a complete investigation that includes, but is not limited to interviewing the service provider, speaking directly to the parents, reviewing all log notes, conferring with the child’s service coordinator, reviewing the service provider’s billing history, and calling the parents/caregivers of all other children on the therapist’s caseload. If an instance of fraud is discovered, Cooper Kids Therapy Associates will refund all monies to the appropriate County. Disciplinary action for the service provider includes, but is not limited to:
1. Deducting monies from the service provider.
2. Removing the service provider from his/her cases.
3. Terminating our contract with the service provider.
4. Reporting the service provider to the Office of the Medicaid Inspector General by calling 1-877-87FRAUD.
Training meetings with the entire billing department are held at a minimum of four (4) times per year, and these procedures are reviewed at each meeting. Our Corporate Medicaid Compliance Policy and Procedures Manual is included with our Employee Handbook and distributed to all employees during employee orientation, which also includes an overview of our Plan and Code. A standardized overview of the Plan and Code, as applicable to the employee’s job responsibilities, will be presented. All employees shall be required to verify in writing their receipt of the Plan and Code and agreement to be bound by and comply with Plan and Code. All employees shall be required to complete a post-training quiz.
Training Memos are distributed via email to all contracted service providers. Training Memos reiterate our Compliance Program and how to report suspected fraudulent activity. Our Corporate Medicaid Compliance Policy and Procedures Manual is included with our Policy and Procedures Manual and distributed to all service providers once per year.
An annual meeting is held with the entire CKTA office staff to review the Medicaid Compliance Program. A copy of the Plan and Code is available in the CKTA office. A Medicaid Fraud Awareness Poster is prominently displayed in the office.
Service Providers are encouraged to report all fraudulent activities that they witness. Providers are encouraged to report fraud and abuse by dialing (516) 496-4460 ext. 110. Calls can remain confidential if the caller dials “*67” and then the phone number. If service providers feel more comfortable, they can call after 5pm or on weekends to leave an anonymous message detailing the fraudulent activities that they are reporting. In addition, anonymous faxes can be sent to (516) 921-4432. We assure service providers that anyone making reports of suspected violations can do so without fear of reprisal or retaliation, and that confidentiality will be protected within the limits of the law.
Employees are encouraged to report all fraudulent activities that they suspect. Employees can report fraud and abuse by speaking to their immediate supervisor, Office Manager, Medicaid Compliance Officer, and/or Director. If employees feel more comfortable, they can email any one or more of these people. We assure employees that anyone making reports of suspected violations can do so without fear of reprisal or retaliation, and that confidentiality will be protected within the limits of the law.
In addition, our agency mails surveys to families receiving evaluations and/or services. Families are assured that their responses are confidential.
Our Compliance Officer is available by phone, email, postal service, or in person.
It is the service provider’s responsibility to maintain the integrity and reputation of both him/her and the agency. He/she must take every reasonable precaution to ensure that his/her work is accurate, timely, and in compliance with all federal and state laws, in addition to policies and procedures regarding billing.
Service Providers are instructed to adhere to the following guidelines:
1. Obtain a parent/caregiver signature at the completion of each session.
2. Document the exact date and time of each session.
3. Provide service(s) exactly as mandated on the child’s IFSP.
Service Providers are instructed to be aware of examples of Medicaid fraud and report any fraud that they witness or suspect:
1. Billing for service not actually performed
2. Providing unnecessary services
3. Lying about eligibility
4. Providing more than one session on the same day
5. Falsifying the time(s) that a session(s) occurred
6. Falsifying the date(s) that a session(s) occurred
Cooper Kids Therapy Associates maintains a policy of good faith participation in our Medicaid Compliance Program and have communicated to our service providers and employees that failing to report suspected problems, participating in non-compliant behavior, and/or encouraging, directing, facilitating or permitting non-compliant behavior are subject to the same disciplinary actions as committing the fraudulent activities.
As outlined in earlier sections of this document, disciplinary actions may include, but are not limited to, the following:
1. Deducting monies from the service provider.
2. Removing the service provider from his/her cases.
3. Terminating our contract with the service provider.
4. Reporting the service provider to the Office of the Medicaid Inspector General by calling 1-877-87FRAUD.
Disciplinary policies shall be fairly and firmly enforced regardless of the alleged perpetrator’s position with our company.
Please also see the section above titled “Internal Claim and Billing Controls” for an explanation of our software controls.
Office staff and supervisors review all paperwork (evaluations, log notes, progress reports etc.) received by the agency. Internal issues are reviewed on an ongoing basis and the Office Manager, the Compliance Officer, and/or the Director will speak with any applicable employees and/or service providers. Service providers are not compensated for their services until all appropriate paper work and/or evaluations are satisfactorily completed and adhere to our quality standards. We do not bill for therapy sessions until we have appropriate log notes and signatures to document that services are provided.
Our agency ensures that services are delivered in accordance with the IFSP/IEP through our regular phone contact with the families, training of the service providers and our computer program that generates pertinent reports. In addition, our agency mails surveys to families receiving evaluations and/or services. Families are assured that their responses are confidential. Families are asked to comment about their participation in treatment sessions, consistency of the therapy schedule, if they are asked to sign a log note after each session, opinions about their child’s progress, efforts of the providers, and if their concerns and ideas are respected. The Director reviews areas of concern and they are addressed with the appropriate people, including if necessary, the Medicaid Compliance Officer.
The Compliance Officer shall oversee periodic audits of the CKTA operations. The Program shall be reviewed by the Compliance officer annually and revised if necessary.
Ellen Cooper, Director
Jennifer Shimmerlik, Clinical Director
Marissa Martin, Medicaid Compliance Officer
Ambreen Moghni, Service Coordination Supervisor
Joanne Porto-Rau, Office Manager
I. Policy
We are committed to prompt, complete and accurate billing of all services provided to consumers. Our affiliates and our employees, contractors and agents shall not make or submit any false or misleading entries on any bills or claims forms, and no employee, contractor or agent shall engage in any arrangements or participate in such an arrangement at the direction of another person, including any supervisor or manager, that results in such prohibited acts.
Further, it is our policy to detect and prevent fraud, waste and abuse in federal healthcare programs. This Policy explains the Federal False Claims Act (31 U.S.C. §§ 3729-33733), the Federal Program Fraud Civil Remedies Act (31 USC §§ 3801-3812), the New York State False Claims Act (State Finance Law §§ 187-194) and other New York State laws concerning false statements or claims and employee protections against retaliation. This policy also sets forth the procedures we have to put into place to prevent any violations of federal or New York State laws regarding fraud or abuse in its health care programs.
II. Scope
This Policy applies to all employees, including management, and all contractors and agents and its affiliates.
III. Overview of Relevant Laws
A. Federal False Claims Act (31 U.S.C. §§ 3729-3733)
1. Overview. The False Claims Act is one of the laws of the Government uses to prevent and detect fraud, waste and abuse in federal health care programs. The False Claims Act provides that anyone who “knowingly” submits false claims to the Government is liable for damages up to three times the amount of the erroneous payment plus mandatory penalties between $5,500 and $11,000 for each false claim submitted. The False Claims Act defines “knowingly” to mean that a person (1) has actual knowledge of the false claim; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information.
Specifically, the False Claims Act may be violated by the following acts:
a. Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval by the federal Government;
b. Knowingly making or using, or causing to be made or used, a false record or statement to get a false claim paid or approved;
c. Conspiring to defraud the Government by getting a false of fraudulent claim allowed or paid; or
d. Knowingly making, using or causing to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the Government.
2. Applicability. Among other things, the False Claims Act applies to claims submitted for payment by federal health care programs, including Medicare and Medicaid.
3. Example. A few examples of actions that violate the False Claims Act include knowingly:
a. Billing for services that are not actually rendered;
b. Charging more than once for the same service;
c. Billing for medically unnecessary services; and
d. Falsifying time records used to bill Medicaid
4. Methods of Enforcement. The Government, or an individual citizen acting on behalf of the Government (a “Relator”), can bring actions under the False Claims Act. If a Relator brings an action under the False Claims Act, the Government has a period of time to investigate the allegations and decide whether to join the lawsuit. IF the Government elects to join the lawsuit, the Relator is entitled to 15-25% of any recovery. If the Government elects not to join the lawsuit, the Relator may still proceed with the action and is entitled to 25-30% of any recovery.
5. Employee Protection. The False Claims Act prohibits discrimination against an employee for taking lawful actions in furtherance of an action under the False Claims Act. If a Relator brings an action under the False Claims Act, the Government has a period of time to investigate the allegations and lawsuit, the Relator is entitled to all relief necessary to make the employee whole. Such relief may include reinstatement, double back pay, and compensation for any special damages, including litigation costs and reasonable attorneys’ fees.
B. Federal Program Fraud Civil Remedies Act (31 §§3801-3812). The program Fraud Civil Remedies Act of 1986 is a federal law that provides for administrative recoveries by federal agencies including the Department of Health and Human Services, which operates the Medicare and Medicaid
Programs. The Law prohibits the submission of a claim or written statement that the person knows or has reason to know is false, contains false information or omits material information. Violations of this law are investigated by the Department of Health and Human Services and monetary sanctions may include penalties of up to $5,500 per claim and damages of twice the amount of the original claim. C. New York State False Claims Laws
1. New York State False Claims Act (State Finance Law §§187-194). The New York State False Claims Act was modeled after the Federal False Claims Act and its provisions are very similar. This Act provides that anyone who “knowingly” submits false claims to the Government is liable for damages up to three times the amount of the erroneous payment plus mandatory penalties between $6,000 and $12,000 for each false claim submitted. The false Claims act defines “knowingly” to mean that a person (1) has actual knowledge of the false claim; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information.
The Government, or an individual citizen acting on behalf of the Government (a “Relator”), can bring actions under the New York State False Claims Act. In addition, The New York State False Claims Act prohibits discrimination against an employee for taking lawful actions in furtherance of an action under the Act. Any employee who is discharged, denoted, harassed, or other wise discriminated against because of lawful acts by the employee in furtherance of an action under the False Claims Act is entitled to all relief necessary to make the employee whole.
2. Social Service Law §145-b. Under this section it is unlawful to knowingly make a false statement or representation, or to deliberately conceal any material fact, or engage in any other fraudulent scheme or device, to obtain or attempt to obtain payments under the New York State Medicaid program, In the event of a violation of this law, the local Social services district or the State has a right to recover civil damages equal to three times the amount of the incorrectly paid claim. In the case if non-monetary false statements, the local Social Service district or State may recover three times the damages ( or 5,000, whichever is greater) sustained by the government due to the violation. In addition, the Department of Health may impose a monetary penalty of up to $2,000 per violation unless a penalty under the section has been imposed within the previous five years, in which case the penalty may be up to $7,500.
3. Social Services Law 363-D. Social Services Law 363-D requires that Medicaid providers develop and implement compliance programs aimed at detecting fraud, waste, and abuse in the Medicaid Program. Medicaid providers may be able to detect and correct payment and billing mistakes and fraud if required to develop and implement compliance programs.
Our organizational commitment to corporate compliance is evidenced through the adoption of a Compliance Committee (Policy & Procedure Manual, section 4.2.1a). We enforce a strict code of business conduct committing to the highest standards.
4. Social Service Law § 366-b. Under this section any person who, with intent to defraud, presents for payment nay false or fraudulent claim for services or merchandise, or knowingly submit false information for the purpose of obtaining compensation greater than that to which he/she is legally entitled to shall be guilty of a class A misdemeanor.
5. Penal Law Article 177. This Article establishes the crime of Health Care Fraud. A person commits such a crime when, with the intent to defraud Medicaid (or other health plans, including non-government plans), he/she knowingly and willfully provides false information or omits material information for the purpose of requesting payments for a health care item or service and, as a result of the false information or omission, Health Care Fraud is punished with fines and jail time based on the amount of payment inappropriately received due to the commission of the crime.
6. Labor Law §740. In addition to provisions contained in the Federal and New York State False Claims Acts, this section offers protections to employees who may notice and report inappropriate activates. Under New York State Law §740, an employee may not take any retaliatory personnel action against an employee because the employee:
• Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation that presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud;
• Provides information to, or testifies before, any public body conducting n investigation, hearing or inquiry into any such violation of a law, rule or regulations by such employer; or
• Objects to, or refuses to participate in any such activity, policy or practice in violation of a law, rule or regulation.
To bring an action under this provision, the employee must first bring the alleged violation to the attention of the employer and give the employer a reasonable opportunity to correct the allegedly unlawful practice. The law allows employees who are the subject of a retaliatory action to bring a civil action in court and seek relief such as injective relief to restrain reasonable costs. The law also provides that employees who bring an action without basis in law or fact may be held liable to the employer for its attorneys’ fees and costs.
IV. Procedure
a. General Principles.
1. Training and education on all affected employees, including executives and governing body members, as well as contracted individuals will be held periodically. All newly hired employees or contracted individuals will be oriented with the corporate compliance’s policies and procedures, as part of their new hire orientation training. Existing employees will be undergoing at a minimum a yearly mandated review of said policies and procedures conducted by management.
2. VP of Compliance is responsible for the day to day operation of the compliance program. The VP of Compliance reports directly into the CEO, and is responsible for the collection and dissemination of all compliance and systems related issues. The VP of Compliance also reports directly into the Board of Directors on activities relating to the compliance program.
3. Billing activities are to be performed in a manner consistent with Medicare, Medicaid and other payor regulations and requirements and in accordance with documentation/billing policies.
4. To assist in its efforts to detect and prevent fraud, waste and abuse, we conduct regular audit and monitoring procedures as described in our auditing procedure policy.
b. Reporting Non-Compliance
If an employee, contractor or agent has any reason to believe that anyone is engaging in false billing practices, that employee shall immediately report the practice in accordance with our reporting potential compliance concerns policy.
C. Non-Retaliation
We will not retaliate against any employee for taking any lawful action under the False Claims Act. Moreover, we will not retaliate against any employee, contractor or agent for reporting ay potential compliance concern, as described in our anti-retaliation policy.
In instances where it has been determined that an employee or contracted individual has failed to report a suspected compliance violation, has participated in non-compliant behavior, or has encouraged, directed, facilitated, or permitted non-compliant behavior, the employee or contracted individual is subject to disciplinary action, up to and including termination. This is true in all instances, including those wherein the employee initially reported a suspected compliance violation is ultimately determined to have been a participant in non-compliant behavior.
7. Employee Handbooks and Contractor Agreements.
This Policy shall be included in all employee handbooks and attached to any contracts with outside contractors or agents.
I. Federal Laws
False Claims Act (31 USC §§3729-3733)
The False Claims Act (“FCA”) provides, in pertinent part, that:
(a) Any person who (1) knowingly presents, or causes to be presented, to an offer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval: (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; (3) conspires to defraud the Government by getting a false or fraudulent claim paid or approved by the Government;…or (7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government,
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is liable to the United States Government for civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person…
(b) For purposes of this section, the terms “knowing” and “knowingly” mean that a person, with respect to information (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required.
31 U.S.C. §3729. While the False Claims Act imposes liability only when the claimant acts “knowing” and “knowingly” it does not require that the person submitting the claim have actual knowledge that the claim is false. A person who acts in reckless and disregard or in the deliberate ignorance of the truth or falsity of the information, also can be found liable under the Act. 31 U.S.C 3729(b)
In sum, the False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services she knows she has not provided. The False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits records that he knows (or should know) are false and that indicate compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim” may include a hospital that obtains interim payments from Medicare through the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.
In addition to its substantive provisions, the FCA provides that private parties may bring an action on behalf of the United States. 31 U.S.C. 3730 (b). These private parties, known as “qui tam relators,” may share in a percentage of the proceeds from the FCA action or settlement.
Section 3730(d)(1) of the FCA provides, with some exceptions, that a qui tam relator, when the Government has intervened in the lawsuit, shall receive at least 15
percent but not more that 25 percent of the proceeds of the FCA action depending upon the extent to which the relator substantially contributed to the prosecution of the action. When the Government does not intervene, section 3730(d)(2) provides that the relator shall receive an amount that the court decides is reasonable and shall be not less that 25 percent and not more than 30 percent.
Administrative Remedies for False Claims (31 USC Chapter 38. §§ 3801-3812)
This statute allows for administrative recoveries by federal agencies. If a person submits a claim that the person knows is false or contains false information, or omits material information, then the agency receiving the claim may impose a penalty of up to $5,000 for each claim. The agency may also recover twice the amount of the claim.
Unlike the False Claims Act, a violation of this law occurs when a false claim is submitted, not when it is paid. Also unlike the False Claim Act, by the administrative agency, not by prosecution in the federal court system.
II) New York State Laws
New York’s false claims laws fall into two categories: civil and administrative; and criminal laws. Some people apply to recipient false claims and some apply to provider false claims, and while most are specific to healthcare or Medicaid, some of the “common law” crimes apply to areas of interaction with the government.
A. Civil and Administrative Laws
NY False Claims Act (state Finance Law, §§187-194)
The NY False Claims Act closely tracts the federal False Claims Act. It imposes penalties and fines on individuals and entities that file false or fraudulent claims for payment from any state or local government, including heath care programs such as Medicaid. The penalty for filing a false claim is $6,000-$12,000 per claim and the recoverable damages are between two and three times the value of the amount falsely received. In addition, the false claim filer may have to pay the government’s legal fees.
The Act allows private individuals to file lawsuits in state court, just as if they were state or local government parties. If the suit eventually concludes with payments back of the government, the person who started the case can cover 25-30% of the proceeds if the government did not participate in the suit of 15-25% if the government did participate in the suit.
Social Services Law §145-b False Statements
It is a violation to knowingly obtain or attempt to obtain payment for items or services furnished under and Social Services program, including Medicaid, by use of a false statement, deliberate concealment or other fraudulent scheme or device. The state of the local Social Services district may recover three times the amount incorrectly paid. In addition Department of Health may impose a civil penalty up to $7,500 per violation may be imposed if they involve more serious violations of Medicaid rules, billing for services not rendered or providing excessive services.
Social Services Law §145-c Sanctions
If any person applies for or receives public assistance, including Medicaid, by intentionally making a false or misleading statement, or intending to do so, the person’s, the person’s family’s needs are not taken into account for 6 months if a first offense, 12 months if a second (or once benefits received are over $3,900) and live years for 4 or more offenses.
B. Criminal Laws
Social Services Law §145 Penalties
Any person who submits false statements or deliberately conceals materials information in order to receive public assistance, including Medicaid, is guilty of a misdemeanor.
Social Services Law §366-b, Penalties for Fraudulent Practices.
a. Any person who obtains or attempts to obtain, for himself or others, medical assistance by means of false statement, concealment of material facts, impersonation or other fraudulent means is guilty of a Class A misdemeanor.
b. Any person who, with intent to defraud, presents for payment and false or fraudulent claim for furnishing services, knowingly submits false information to obtain greater Medicaid compensation or knowingly submits false information in order to obtain authorization to provide terms or services is guilty of a Class A misdemeanor.
Penal Law Article 155, Larceny.
a. Fourth grand larceny involves property valued over $1,000. It is a Class E felony.
b. Third degree grand larceny involves property valued over $3,000. It is a Class D felony.
c. Second degree grand larceny involves property valued over $50,000. It is a Class C felony
d. First Degree grand larceny involves property valued over $1 million. It is a Class B felony.
Penal Law Article 175, False Written Statements.
Four crimes in this Article relate to filing false information or claims and have been applied in Medicaid fraud prosecutions.
a. §175.05, falsifying business records in involves entering false information, omitting material information or altering an enterprise’s business records with the intent to defraud. It is a Class A misdemeanor.
b. §175.10 Falsifying business records in the first degree includes the elements of the §175.05 offense and includes the intent to commit another crime or conceal its commission. It is a Class E felony
c. §175.30, offering a false instrument for filing in the second degree involves presenting a written instrument (including a claim for payment) to a public office knowing that it contains false information. It is a Class A misdemeanor
d. §175.35 offering a false instrument for filing in the first degree includes the elements of the second degree offense and must include an intent to defraud the state or a political subdivision. It is a Class E felony.
Penal Law Article 176, Insurance Fraud.
Applies to claims for insurance payment, including Medicaid or other health insurance and contains six crimes.
a. Insurance Fraud in the 5th degree involves intentionally filing a health insurance claim knowing that it is false. It is a Class A misdemeanor.
b. Insurance fraud in the 4th degree is filing a false insurance claim for over $1,000. It is a class E felony.
c. Insurance fraud in the 3rd degree is filing a false insurance claim for over $3,000. It is a class D felony.
d. Health care fraud in the 2nd degree is filing false claims and annually receiving over $50,000 in the aggrate. It is a Class C felony.
e. Health care fraud in the 1st degree is filing false claims and annually receiving over $1 million in the aggregate. It is a Class B felony
III) Whistleblower Protection
Federal False Claims Act (31 U.S.C. §3730(h))
The FCA provides protection to qui tam relators who are discharged, denoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the FCA. 31 U.S.C. 2730(h). Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained, as a result of the discrimination, including litigation costs and reasonable attorneys’ fee.
NY False Claim Act (State Finance Law §191)
The False Claim Act also provides to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other mannor discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the Act. Remedies include reinstatement with comparable seniority as the qui team relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages, sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.
New York Labor Law §740
An employer may not take any retaliatory action against an employee if the employee discloses information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official. Protected disclosures are those that assert that the employer is in violation of the law that creates a substantial and specific danger to public health and safety or which constitutes health care fraud under Penal Law §177 (knowingly filing, with intent to defraud a claim for payment that intentionally has false information or omissions). The employee’s disclosure is protected only if the employee first brought up the matter with a supervisor and gave the employer a reasonable opportunity to correct the alleged violation. If an employer takes a retaliatory action against the employee, the employee may sue in state court for reinstatement to the same, or an equivalent position, any lost back wages and benefits and attorneys’ fees. If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the employer.
New York Labor Law §741
A health care employer may not take any retaliatory action against an employee if the employee discloses certain information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official. Protected disclosures are those that assert that, in good faith, the employee believes constitute improper quality of patient care. The employee’s disclosure is protected only if the employee first brought up the matter with a supervisor and gave the employer a reasonable opportunity to correct the alleged violation, unless the danger is imminent to the public or patient and the employee believes in good faith that reporting to a supervisor would not result in corrective action. If an employer takes a retaliatory action against the employee, the employee may sue in state court for reinstatement to the same, or an equivalent position, any lost back wages and benefits and attorneys’ fees. If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the employer.
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