CPS-4.01 COM FEDERAL AND STATE FALSE CLAIMS POLICY

POLICY NUMBER: CPS-4.01
RESPONSIBLE OFFICER: Chief Compliance Officer
EFFECTIVE DATE: July 1, 2014

REVISED DATE: May 15, 2018

I. POLICY

It is the policy of Drexel University College of Medicine (CoM) to provide detailed information to its employees – and those of its contractors and agents – about the role of the federal False Claims Act, the federal Program Fraud Civil Remedies Act, the Anti-Kickback Statute, the Physician Self-Referral Law and applicable state false claims laws in preventing Fraud, Waste, and Abuse in federal health care programs, including the Medicaid/Medicare program.

II. PURPOSE

The purpose of this policy is to comply with certain requirements set forth in the federal Deficit Reduction Act of 2005 (the “DRA”), particularly sections 6031 and 6032 of the DRA, in addition to federal Medicare Advantage program regulations, with regard to educating employees about federal and state false claims laws.

III. SCOPE

All CoM programs and operations, including all CoM faculty and professional staff members, including but not limited to Drexel University Physicians, and all of CoM’s contractors and agents and their employees.

IV. Definitions

Abuse includes actions that may, directly or indirectly, result in unnecessary costs to the Medicaid/Medicare Program.  Abuse involves paying for items or services when there is no legal entitlement to that payment, and the provider has not knowingly or intentionally misrepresented facts to obtain payment.  Examples of Abuse include unknowingly billing for unnecessary medical services or unknowingly misusing codes on a claim, such as upcoding or unbundling codes.

Fraud is knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program.  Examples of actions that may constitute Fraud include knowingly billing for services not furnished or supplies not provided, or altering claim forms, medical records, or receipts to receive a higher payment

Waste includes practices that, directly or indirectly, result in unnecessary costs to the Medicaid/Medicare Program, such as overusing services.  Waste is generally not considered to be caused by criminally negligent actions but rather by the misuse of resources.  Examples of Waste include conducting excessive office visits or writing excessive prescriptions or prescribing more medications than necessary for treating a specific condition. 

V. GENERAL

False claims laws seek to prevent Fraud, Waste, and Abuse in government health care programs in two significant ways. First, they permit the government to bring civil lawsuits to recover damages and penalties against health care providers that submit false claims. Second, these laws often permit private persons, including current or former employees of such providers, to bring so-called “whistleblower” actions against the providers on the government's behalf.

There are both federal and state false claims laws.

Federal False Claims Laws

The Federal False Claims Act

The federal False Claims Act (“FCA”) makes any person or entity that knowingly submits a false or fraudulent claim for payment of United States government funds liable for significant penalties and fines. These sanctions include a penalty of up to three times the government's damages, civil monetary penalties for each false claim, and the costs of the civil action against the entity that submitted the false claims. This law applies generally to federally-funded programs, including to health care programs such as Medicaid and Medicare.

The federal FCA also includes a “whistleblower,” or “qui tam,” provision. Under that provision, a private person with knowledge of a false claim may bring a civil action on behalf of the United States government to recover funds it has paid as a result of that false claim. The government will investigate the whistleblower's allegations and may or may not choose to join in the lawsuit. If the government chooses to participate, it assumes responsibility for all of the expenses associated with the lawsuit. If the lawsuit is ultimately successful, the court may award the whistleblower who initially brought the suit a percentage of the funds recovered. That percentage is lower when the government joins in the action. Regardless of whether the government participates, the court may reduce the whistleblower's share of the proceeds if it finds that the whistleblower planned and initiated the false claim violation. If the whistleblower is convicted of criminal conduct related to his or her role in the preparation or submission of the false claim, finally, the whistleblower will be dismissed from the civil action without receiving any portion of the proceeds.

The federal FCA also contains a provision that protects a whistleblower from retaliation by his or her employer. That provision applies to any employee who is discharged, demoted, suspended, threatened, harassed, or discriminated against because of the employee's lawful conduct in furtherance of a false claim action. In such a case, the employee may bring an action in the appropriate federal district court and, if he or she prevails, 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 retaliation, such as litigation costs and reasonable attorney's fees.

Program Fraud Civil Remedies Act

The federal Program Fraud Civil Remedies Act (“PFCRA”) provides for administrative remedies against those who knowingly submit false claims and statements. Under the PFCRA, a false claim or statement includes submitting a claim or making a written statement that is for services that were not provided, that assert a material fact that is false, or that omits a material fact. A violation of the statute may result in a monetary civil penalty per violation, plus an assessment of up to twice the amount of each false or fraudulent claim.

Anti-Kickback Statute

The Anti-Kickback Statute (“AKS”) makes it a crime to knowingly and willfully offer, pay, solicit, or receive any remuneration directly or indirectly to induce or reward referrals of items or services reimbursable by a Federal health care program. When a health care provider offers, pays, solicits, or receives unlawful remuneration, the provider violates the AKS.

Civil penalties for violating the AKS may include three times the amount of the kickback plus an additional monetary penalty for each kickback. Criminal penalties for violating the AKS may include fines, imprisonment, or both.

Physician Self-Referral Law

The Physician Self-Referral Law, often called the Stark Law, prohibits a physician from referring certain designated health services payable by Medicare or Medicaid to an entity in which the physician (or an immediate family member) has an ownership/investment interest or with which he or she has a compensation arrangement, unless an exception applies.

Penalties for physicians who violate the Stark Law may include fines, significant civil monetary penalties for each service, repayment of claims, and potential exclusion from all Federal health care programs.

State False Claims Law

Pennsylvania statutes make it a crime for providers to knowingly make false statements or present for allowance or payment a false or fraudulent claim or cost report for Medicaid items or services. Violations of these statutes are punishable by imprisonment and significant monetary penalties. State law also prohibits employers from retaliating against employees who make a good faith report of instances of wrongdoing or Waste.

States periodically consider new legislation of this type, and the DRA includes specific incentives for states to pass their own FCAs. Accordingly, CoM will update this policy as appropriate to identify any relevant new statute that the Pennsylvania General Assembly enacts.

V. PROCEDURE

Reporting Fraud, Waste and Abuse

CoM takes compliance with the federal and state false claims laws seriously. Any employee who becomes aware of a violation or potential violation of such laws, or any fraudulent or potentially fraudulent conduct for that matter, is expected to report the same immediately. Employees, including CoM management, contractors, and agents, should review, understand, and follow the Reporting Allegations policy (CPS-4), found on the Drexel University Policy Directory, which sets forth general procedures for reporting and investigating suspected
Fraud. Employees may direct questions regarding the policy to their immediate supervisors or to Drexel's Chief Compliance Officer.

CoM encourages employees initially to report compliance concerns to their immediate supervisors, when appropriate. In the alternative, reports may be made to Drexel's Compliance Hotline -- 866.358.1010 or on the web at EthicsPoint Hotline Link or directly to the Chief Compliance Officer by sending an email to compliance@drexel.edu. 

The Chief Compliance Officer will investigate these reports.  If a report is substantiated, the Chief Compliance Officer will confer with the Office of the General Counsel (“OGC”), and any other necessary departments, to determine if any external reporting obligations exist, including obligations to report to any governmental agency or health plan sponsor.  If a reporting requirement does exist, the Chief Compliance Officer and the OGC will determine the mechanism by which that report will be delivered and the appropriate department to deliver it.

Any information that employees provide to their supervisors, or any member of the administration or the Chief Compliance Officer, will be kept in confidence to the extent feasible under the applicable federal and state laws and regulations. In the event of a government investigation or lawsuit, or if the need otherwise arises for CoM to disclose the information, such information may be disclosed at the direction of legal counsel.

CoM will not take adverse action against an employee for reasonably requesting assistance from, or reporting potential violations of law or University policy to, a supervisor, the Compliance Hotline, or the Chief Compliance Officer. By reporting his or her own misconduct, however, an employee will not insulate himself or herself from potential disciplinary action for such a violation. Employees should report concerns about possible retaliation or harassment to the Chief Compliance Officer.

CoM will not tolerate abuse of the reporting process.  Any employee who makes an intentionally false statement, or makes a report of alleged misconduct in bad faith, shall be subject to appropriate disciplinary action, up to and including termination.

Employee Training

CoM staff members who are involved in the administration (e.g. provider credentialing) or delivery of Medicare Advantage Parts C and D benefits (e.g. health care services) are required to complete General Compliance and Fraud, Waste and Abuse training within ninety (90) days of initial hiring and annually thereafter.  Training will be administered through Drexel University’s Learning Management system and records of training completion will be maintained for a period of 10 years.

VI. REFERENCES

31 U.S.C. §§ 3729-3733 
31 U.S.C. §§ 3801-3812 
62 P.S. §§ 1407, 1408 
43 P.S. §§ 1421-1428

42 CFR §§ 422.503

Medicare Managed Care Manual Chapter 21, Section 40 and Section 50