Orange Regional Medical Center And All Out-Patient Facilities
Policy / Procedure
It is the policy of Orange Regional Medical Center (the "Hospital") that all personnel (including employees, management, physicians, consultants, contractors and other agents) shall comply with all applicable federal and New York State False Claims Act laws and regulations. The Hospital has instituted various procedures, which are set forth in the Hospital's Compliance Manual, to ensure compliance with these laws and to assist the Hospital in preventing fraud, waste and abuse in federal health care programs. As part of the Hospital's Compliance Program, personnel shall receive training on these laws, which are summarized below, and should consult with the Compliance Officer (who may confer with the Hospital's legal counsel, as needed) if they have questions about the application of these laws to their job.I. FEDERAL LAWS
II. NEW YORK STATE LAWS
- The Federal False Claims Act
The Federal False Claims Act is a law that prohibits a person or entity, such as the Hospital from "knowingly" presenting or causing to be presented a false or fraudulent claim for payment or approval to the Federal government, and from "knowingly" making, using or causing to be made a false record or statement to get a false or fraudulent claim paid or approved by the Federal government. The Act also prohibits a person or entity from conspiring to defraud the government by getting a false or fraudulent claim allowed or paid. These prohibitions extend to claims submitted to Federal health care programs, such as Medicare or Medicaid.
The Federal False Claims Act broadly defines the terms "knowing" and "knowingly." Specifically, knowledge will have been proven for purposes of the Federal False Claims Act if the person or entity: (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. The law specifically provides that a specific intent to defraud is not required in order to prove that the law has been violated.
A person or entity found guilty of violating this law is obligated to repay all of the falsely obtained reimbursement and will be liable for a civil penalty of up to $11,000, plus three times the amount of actual damages sustained by the government as a result of the prohibited conduct for each violation of the Act. In addition to being liable for damages and civil penalties, violating the Federal False Claims Act can subject a person or entity to exclusion from participation in Federal health care programs, such as Medicare and Medicaid.
- Whistleblower Protections
Private persons are permitted to bring civil actions for violations of the Federal False Claims Act on behalf of the United States (also known as "qui tam" actions) and are entitled to receive percentages of monies obtained through settlements, penalties and/or fines collected. Persons bringing these claims (also known as "relators" or "whistleblowers") are granted protection under the law. Specifically, any whistleblower who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against by his or her employer because of reporting violations of the Federal False Claims Act will be entitled to reinstatement with seniority, double back pay, interest, special damages sustained as a result of discriminatory treatment, and attorneys' fees and costs.
- The Program Fraud Civil Remedies Act ("PFCRA")
This Federal law makes it illegal for a person or entity to make, present or submit (or cause to be made, presented or submitted) a "claim" (i.e., a request, demand or submission) for property, services, or money to an "authority" (i.e., an executive department of the Federal Government, e.g., the U.S. Department of Health and Human Services, which oversees Medicare and Medicaid programs) when the person or entity "knows or has reason to know" that the claim: (i) is false, fictitious or fraudulent; or (ii) includes or is supported by any written statement which asserts a material fact which is false, fictitious or fraudulent; or (iii) includes or is supported by any written statement which omits a material fact, is false, fictitious or fraudulent because of the omission and is a statement in which the person or entity has a duty to include such material fact; or (iv) is for the provision of items or services which the person or entity has not provided as claimed.
In addition, it is illegal to make, present or submit (or cause to be made, presented, or submitted) a written "statement" (i.e., a representation, certification, affirmation, document, record, or accounting or bookkeeping entry made with respect to a claim or to obtain the approval or payment of a claim) if the person or entity "knows or has reason to know" such statement: (i) asserts a material fact which is false, fictitious or fraudulent or (ii) omits a material fact making the statement false, fictitious or fraudulent because of the omission.
Similar to the Federal False Claims Act, the PFCRA broadly defines the terms "knows or has reason to know" as (1) having actual knowledge that the claim or statement is false, fictitious, or fraudulent; (2) acting in deliberate ignorance of the truth or falsity of the claim or statement; or (3) acting in reckless disregard of the truth or falsity of the claim or statement. The law specifically provides that a specific intent to defraud is not required in order to prove that the law has been violated.
The PFCRA provides for civil penalties of up to $5,000 for each false claim paid by the government, and, in certain circumstances, an assessment of twice the amount of each claim.
In addition, if a written statement omits a material fact and is false, fictitious or fraudulent because of the omission and is a statement in which the person or entity has a duty to include such material fact and the statement contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, the law provides for a penalty of up to $5,000 to be imposed for each such statement.
- Civil Penalties
New York State makes it unlawful to knowingly make a false statement or representation (or by deliberate concealment of any material fact or other fraudulent scheme or device) to attempt to obtain, or to obtain, Medicaid payments for services or supplies furnished under the New York State Medical Assistance Program. A violation of this law can subject a person or entity, such as the Hospital to civil damages equal to three times the amount falsely overstated (or in the case of non-monetary false statements or representations, three times the amount of damages sustained as a result of the violation) or $5,000, whichever is greater. In addition, the person or entity may be required to pay a civil monetary penalty of up to $2,000 for each item or services as restitution to the Medical Assistance Program if the person or entity knew, or had reason to know that:
- the payment involved the providing or ordering of care, services, or supplies that were medically improper, unnecessary or in excess of the documented medical needs of the person to whom they were furnished;
- the care, services or supplies were not provided as claimed;
- the person who ordered or prescribed care, services or supplies which were medically improper, unnecessary or in excess of the documented medical need of the person to whom they were furnished was suspended or excluded from the Medical Assistance Program at the time the care, services or supplies were furnished; or
- the services or supplies for which payment was received were not, in fact, provided.
- Criminal Penalties
New York State also imposes the threat of criminal prosecution against any person who, with intent to defraud, presents for payment any false or fraudulent claim for furnishing services or merchandise, knowingly submits false information for the purpose of obtaining greater compensation than otherwise permitted, or knowingly submits false information for the purpose of obtaining authorization for furnishing services or merchandise under the New York State Medical Assistance Program. Such person may be guilty of a Class A misdemeanor, unless that act constitutes a violation of a provision of the Penal Law.
It is also a crime, under the New York State Penal Law, to commit "health care fraud." Such occurs, when, with intent to defraud a private or public health plan (including, e.g., Medicaid or an HMO), a person or entity knowingly and willfully provides materially false information or omits material information for the purpose of receiving payment for health care items or services that the person or entity is not otherwise entitled to receive. The severity of the penalty for committing this crime corresponds to the amount of payment wrongfully received from a single health plan in a one-year period. For example:
- payments under $3,000 constitute a class "A" misdemeanor;
- payments between $3,001 to $10,000 constitute a class "E" felony;
- payments between $10,001 to $50,000 constitute a class "D" felony;
- payments between $50,001 to $1,000,000 constitute a class "C" felony; and
- payments that exceed $1,000,000 constitute a class "B" felony.
- Whistleblower Protections
Under New York's Labor Law, employers are prevented from taking any retaliatory actions (i.e., discharge, suspension, demotion or other adverse action in terms of condition of employment) against an employee who 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 which violation creates and presents a substantial and specific danger to the public health or which constitutes the crime of health care fraud. The law allows employees so treated to bring a civil court action for: injunctive relief to restrain continued retaliation; reinstatement to the same or equivalent position held before the retaliatory action; reinstatement of benefits and seniority; compensation for lost wages, benefits and other remuneration; and the payment of reasonable costs and attorneys' fees.