Fraud, Waste, and Abuse

Any intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to themselves or some other person. It includes any act that constitutes fraud under applicable federal or state law.

An overutilization of services or other practices that directly or indirectly result in unnecessary costs. Waste is generally not considered to be caused by criminally negligent actions, but rather the misuse of resources.

Provider practices that are inconsistent with sound fiscal, business, or medical practices and result either in an unnecessary cost to the federally funded programs or in reimbursement for services that are not medically necessary or provider practices that fail to meet professionally recognized standards for healthcare. It also includes recipient practices that result in unnecessary cost to the federally funded programs.

False Claims Act

General Information: Provides monetary penalties that can be imposed upon a healthcare provider for knowingly and willfully making false statements or representations in connection with filing a claim seeking reimbursement from a federally funded health care program. In this act, the definition of “knowingly” includes actual knowledge, deliberate ignorance and reckless disregard for the truth.

Some examples of healthcare fraud have included: certifications and information, lack of medical necessity, duplicate claims for the same service, submitting claims for an excluded provider, inserting diagnosis codes not obtained from a physician or other authorized individual, etc. There is often some falsification of records to support improper billings.

Potential Penalties:

• Fines up to $11,000 per services billed and/or three times the amount originally billed and/or
• Exclusion from Medicare, Medicaid and other federally funded health care programs

Anti-Kickback Statute

General Information:

Provides civil and criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit or receive “remuneration” to induce the referral of business. Examples of “remuneration” include services (such as free testing or supplies) as well as items (such as cash, equipment, software, gifts, and other things of value). No bribes, kickbacks or other inappropriate payments should be offered or given to any person or entity for any reason including, but not limited to, the acquisition or retention of business.

Potential Penalties:

• Imprisonment up to 5 years and/or -Criminal and civil fines up to $25,000 and/or
• Exclusion from the Medicare, Medicaid and other federally funded healthcare programs

Stark Law

General Information:

Provides criminal penalties for individuals or entities that do not adhere to the regulations regarding financial arrangements between referring physicians (or a member of the physician’s immediate family) and entities that provided designated health services payable by Medicare or Medicaid. In contrast to the anti-kickback statute, it does not require any showing of the “wrongdoer’s” intent. Penalties can be applied if an arrangement exists that does not satisfy allowed exceptions.

Potential Penalties:

• Civil money penalty of $15,000 per service billed
• Refund of amounts collected in violation of the statute
• Exclusion from the Medicare, Medicaid and other federally funded healthcare programs and/or
• Civil money penalty of $100,000 and exclusion for arrangements or schemes to circumvent the statute