Healthcare providers are confronted with a heighted regulatory landscape since the enactment of the Affordable Care Act. Congress has been patently devoted to prosecuting provider practices that conspicuously overbill Medicare or Medicaid. The ability to prosecute providers under the False Claims Act has significantly changed in recently years including recent legislation under the Fraud Enforcement and Recovery Act of 2009 and the formation by the Department of Justice and Health and Human Services of the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”). On the State level, Section 6031 of the Deficit Reduction Act of 2005 created a financial incentive for States to establish legislation to prosecute individuals or entities who submit false or fraudulent claims to the Medicaid program.

In addition to these dramatic changes in the law, language in the Affordable Care Act ushered in a new era of enforcement against fraud, waste and abuse. This new era includes enhanced use of technology such as sophisticated data mining, and other fraud detection methods which has resulted in the Federal government becoming more efficient in identifying false claims. Nevertheless, the government still greatly depends on qui tam relators (private citizens who initiate false claim actions and report such claims to the government for investigation and possible prosecution). Provider liability under the Act can be massive, with penalties between $5,500 to $11,000 per false claim, plus three times the total loss to the government. Qui tam relators, can receive fifteen to thirty percent of the total recovery. Moreover, recent amendments to the False Claims Act enacted under the Affordable Care Act has widened the scope of potential claims that can be successfully initiated and sustained by qui tam relators, especially given the whistleblower protections afforded to these potential claimants. This means, in essence that there is a more definite probability of claims being initiated by past and present employees of health practices under the False Claims Act.

In the last couple of years, Congress has increased funding as part of its committed effort to fight fraud, waste and abuse in the Federal healthcare programs. Approximately $350 million through 2020 has been allocated under the Affordable Care Act toward investigation and prosecution of fraud, waste and abuse. To be found liable under the act, no proof of specific intent is required. Providers can be found liable under the act for knowingly making a false statement to have a Medicare or Medicaid claim paid or approved. The term “knowingly” can mean that the provider or entity acted in deliberate ignorance or reckless disregard of the truth of information submitted to receive payment. If a provider is accused of knowingly submitting a false claim, the provider could see all of  their Medicare and Medicaid payments for care suspended by CMS if there is deemed to be a “credible allegation of fraud” as defined by the Department of Health and Human Services.

What this means is that provider practices should be diligent in their billing practices and institute and evaluate periodically proper controls regarding their revenue cycle. The penalties are too severe not to have proper policies and procedures in place.  In addition, provider practices regardless of size should implement a compliance program in response to these changes in the law and heightened government enforcement actions.  For more information, please contact our firm at info@scottpractice.com.