The False Claims Act (“FCA” or “the Act”) is one of the most important tools we have in the fight against health care fraud and other frauds on the federal government. When an organization or individual knowingly takes more money from the government than the law allows or otherwise submits a false claim to the government, the FCA allows the government to recover triple damages plus an appropriate penalty. Examples of false claims include overcharging Medicare for medical treatment and supplying the military with goods that don’t meet contractual requirements. The Act has a special qui tam provision that allows individuals to act as whistleblowers and bring claims on the government’s behalf, a critical tool because fraud is difficult to uncover without help. Although the law provides whistleblowers with a substantial reward for their time and effort if their case leads to a recovery via either a settlement or judgment, most whistleblowers are motivated by a desire to do the right thing and our government fraud law firm is proud to help them.
Recently, we’ve looked back on the success of the FCA in 2015. Today, we look ahead at what 2016 may hold in the health care fraud arena, the sector responsible for the largest share of FCA recoveries in 2015. Becker’s Hospital Review, a leading journal for the health care industry, identifies the following five trends expected to fuel FCA recoveries in the coming year:
- Extrapolation – Extrapolation involves examining a sample of payment claims and applying the information learned to all similar claims filed by the same organization. This is a useful shortcut in cases alleging large-scale fraud. Defendants have contested (and will likely to continue to fight) the use of extrapolation claiming it unfairly lowers the government’s burden of proof, but courts have largely ruled in the government’s favor.
- Physician Compensation – Several high-profile cases in 2015 involved the relationship between providers and hospitals, particularly links between referrals and compensation. Federal law generally forbids paying providers for referrals because it may cloud a physician’s medical judgment. Becker’s projects this will continue to be a big issue in 2016.
- Individual Liability – Although the government traditionally targeted organizations, the trend is to hold individuals, not just their employers, liable for fraud. This practice became even more established following a Department of Justice memorandum issued in September advocating a strong stance of pursuing executives responsible for corporate wrongdoing.
- Disclosure of Overpayments – Under the Affordable Care Act, entities that receive an overpayment from state/federal governments must report the overpayment within 60 days from the time it is identified. In 2015, a federal judge ruled the clock starts when the organization learns of a possible overpayment not, as hospitals had hoped, when an overpayment is conclusively pinpointed.
- Implied Certification – Implied certification allows the government/whistleblower to allege a claim is false if the provider billed in violation of a Medicare rule/regulation even if the provider did not specifically certify compliance when submitting the claim. In practice, this means a claim can be based on a violation of a contract or law other than the FCA itself. See the link at the end of this blog entry to our discussion of the Badr case, an appeals court decision from early 2015, examining the theory and how it can expand the Act’s reach. The Supreme Court is expected to rule on the validity of implied certification during the 2016 term.
We are excited to continue to work with whistleblowers in 2016 to bring (and win!) FCA claims and fight health care fraud. If you believe you’ve witnessed fraud on the government, including but not limited to Medicare fraud, contact our False Claims Act lawyer to learn how you can turn your knowledge into action.
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 Note: Becker’s is aimed at health care executives, a focus evident in the article. We work with whistleblowers, typically the opposing side in FCA matters (though health care executives make excellent whistleblowers and we’re happy to discuss how a case might take into account a whistleblower’s own role in the fraud). Our take on issues is a bit different, but we agree that these will be major FCA issues in the year to come.