WARREN HOSPITAL COMPLIANCE PROGRAM
POLICIES AND PROCEDURES
POLICY ON THE FALSE CLAIMS ACTS
POLICIES AND PROCEDURES
POLICY ON THE FALSE CLAIMS ACTS
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Policy No. CC-8
Effective Date: March 18, 2008Policy No. CC-8
Reviewed/Revised: November 24, 2008
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POLICY
It is the policy of the Hospital to remain in compliance with federal and state laws related to the submission of false claims and not to retaliate against those who report suspected wrongdoing in good faith.
PROCEDURE
A. Deficit Reduction Act of 2005.
The Deficit Reduction Act of 2005 requires, among other things, that Warren Hospital establish this False Claims Act Policy, and to inform employees and others about the Federal False Claims Act, the New Jersey False Claims Act, the New Jersey Insurance Fraud Prevention Act, whistleblower laws, and other laws that provide liability for false claims and statements.
B. Dissemination of Information.
The Compliance Officer is responsible for ensuring that all Hospital employees (including management), and all contractors or agents of Warren Hospital, receive a copy of this Policy, as well as the False Claims Act Information Sheet, which is attached as Attachment A to this Policy, and that all such persons shall be provided an opportunity to seek clarification or more information from the Compliance Officer on any aspect of this Policy or the Information Sheet.
C. Federal False Claims Act.
1. Federal False Claims Act.
The Federal False Claims Act, generally, provides that those who knowingly submit, or cause another person or entity to submit, false claims for payment with government funds are liable for three times the government's damages plus civil penalties of $5,500 to $11,000 per false claim. Knowingly means that a person (i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth of falsity of the information.
2. Whistleblower Provisions of the Federal False Claims Act.
(a) A private person may bring a civil action against the Hospital under the Federal False Claims Act on behalf of the government and on behalf of himself or herself, provided that the person has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the government before filing the action. Such a whistleblower action is also called a "qui tam" action.
(b) It is only the filing of a qui tam lawsuit and a subsequent settlement or favorable judgment which enables a private party to receive a recovery under the Federal False Claims Act. Merely informing the government about the alleged violation is not enough. Further, a whistleblower receives an award only if, and after, the government recovers money as a result of the lawsuit. If the government proceeds with the case, the person who filed the action will receive between 15% and 25% of any recovery, depending upon the contribution of that person to the prosecution of the case. If the government does not proceed with the case, the person who filed the action will be entitled to between 25% and 30% of any recovery, plus reasonable expenses and attorneys' fees and costs.
3. Whistleblower Protection/Anti-Retaliation.
(a) The Hospital will not retaliate against any employee, contractor or agent because of their actions in filing a qui tam lawsuit.
(b) As set forth in the Hospital's Compliance Policy on Internal Handling of Compliance Reports, the Hospital will not retaliate against or penalize any employee for good-faith compliance reporting.
(c) Any employee who commits or condones any form of retaliation will be subject to discipline, up to, and including, termination.
(d) Employees cannot exempt themselves from the consequences of their own misconduct by reporting an issue, although self-reporting may be taken into account in determining the appropriate course of action.
Under the Federal False Claims Act, any employee who is discharged, demoted, harassed or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Federal False Claims Act is entitled to all relief necessary to make the employee whole. Such relief may include reinstatement, double back pay, and compensation for any special damages, including litigation costs and reasonable attorneys' fees.
D. Program Fraud and Civil Remedies Act.
The Program Fraud and Civil Remedies Act ("PFCRA") creates administrative remedies for making false claims and false statements. These penalties are separate from and in addition to any liability that may be imposed under the Federal False Claims Act. The PFCRA imposes liability on people or entities who file a claim that they know or have reason to know (1) is false, fictitious, or fraudulent; (2) includes or is supported by any written statement that contains false, fictitious, or fraudulent information; (3) includes or is supported by a written statement that omits a material fact, which causes the statement to be false, fictitious, or fraudulent, and the person or entity submitting the statement has a duty to include the omitted fact; or (4) is for payment for property or services not provided as claimed.
A violation of this section of the PFCRA is punishable by a $5,000 civil penalty for each wrongfully filed claim, plus an assessment of twice the amount of any unlawful claim that has been paid.
In addition, a person or entity violates the PFCRA if he or she submits a written statement which he or she knows or should know asserts a material fact that is false, fictitious or fraudulent; or omits a material fact that he or she had a duty to include, the omission caused the statement to be false, fictitious, or fraudulent, and the statement contained a certification of accuracy.
A violation of this section of the PFCRA carries a civil penalty of up to $5,000 in addition to any other remedy allowed under other laws.
E. New Jersey False Claims Act.
1. New Jersey False Claims Act.
The New Jersey False Claims Act generally prohibits: (i) knowingly presenting or causing to be presented to an employee, officer or agent of the state, or to any contractor, grantee or other recipient of state funds, a false or fraudulent claim for payment or approval; (ii) knowingly making, using, or causing to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the state; or (iii) knowingly making, using, or causing to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the state. Knowingly means (A) having actual knowledge that the information on the claim is false; (B) acting in deliberate ignorance of the truth or falsity of the information; or (C) acting in reckless disregard of whether the claim is true or false.
A person or entity that has violated the New Jersey False Claims Act will be jointly and severally liable to the State of New Jersey for a civil penalty of not less than and not more than the civil penalty allowed under the Federal False Claims Act, for each false or fraudulent claim, plus three times the amount of damages which the state sustains (i.e., treble damages). The court may reduce the treble damages to not less than twice the amount of damages which the state sustains if the court finds that certain factors are met.
Violations of the New Jersey False Claims Act also give rise to liability under the Medical Assistance and Health Services Act (see below), N.J.S.A. 30:4D-17. Specifically, any person, firm, corporation, partnership, or other legal entity who violates the provisions of the New Jersey False Claims Act will, in addition to other penalties provided by law, be liable for civil penalties of (1) payment of interest on the amount of the excess benefits or payments at the maximum legal rate in effect on the date the payment was made to said person, firm, corporation, partnership or other legal entity for the period from the date upon which payment was made to the date upon which repayment is made to the State; (2) payment of an amount not to exceed three-fold the amount of such excess benefits or payments; and (3) payment in the sum of not less than and not more than the civil penalty allowed under the Federal False Claims Act for each excessive claim for assistance, benefits or payments.
2. Whistleblower Provisions and Protections under the New Jersey False Claims Act.
A person may bring a civil action for a violation of the New Jersey False Claims Act for the person and for the state. The person also must serve the State Attorney General. If the State Attorney General proceeds with and prevails in an action brought by an individual under the New Jersey False Claims Act, the individual is entitled to at least 15% but not more than 25% of the proceeds recovered under any judgment or any proceeds of any settlement, depending on the extent of the individual's involvement. If the State Attorney General does not proceed with an action, the individual will receive an amount which the court decides is reasonable, which will be between 25% and 30% of the proceeds of the action or settlement of a claim.
An employee who is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under the State False Claims Act, including preliminary investigation, is entitled to special protection. The protection afforded includes reinstatement with the same seniority status such employee would have had, but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney's fees.
Under the State False Claims Act, an employee who is discharged, demoted, suspended, harassed, denied promotion, or in any other manner discriminated against in the terms and conditions of employment by his employer because of participation in conduct which directly or indirectly resulted in a false claim being submitted to the State shall be entitled to the above-discussed remedies if, and only if, both of the following occurred:
(a) The employee voluntarily disclosed information to a State or law enforcement agency or acts in furtherance of a false claims action, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed.
(b) The employee had been harassed, threatened with termination or demotion, or otherwise coerced by the employer or its management into engaging in the fraudulent activity in the first place.
F. The New Jersey Insurance Fraud Prevention Act.
This law makes it unlawful to: (1) present or cause to be presented (including the assisting, conspiring or urging of another to present) any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy knowing the statement contains false or misleading information concerning any fact or thing material to the claim or (2) conceal or knowingly fail to disclose the occurrence of an event which affects any person’s initial or continued right or entitlement to any insurance benefit of payment or the amount of any benefit or payment to which the person is entitled. A violation of this law can subject a person or entity, such as Hospital to civil damages equal to three times the amount of damages; penalties of $5,000 for the first offense, $10,000 for the second offense and $15,000 for each subsequent offense. A person who is found guilty in any legal proceeding to have committed insurance fraud will be subject to a surcharge paid to the State of $1,000. If a person is charged with insurance fraud in a legal proceeding and the charge is resolved through a settlement requiring the person to pay a sum of money, the person shall be subject to a 5% surcharge, which shall be paid to the State. In addition, this law authorizes the Attorney General to pursue additional criminal penalties.
G. The Medical Assistance and Health Services Act.
The Medical Assistance and Health Services Act allows for the imposition of criminal fines (up to $10,000) and terms of imprisonment (up to three years) for various violations involving the submission of claims for payment under the Medical Assistance Program. For instance, such criminal penalties may be imposed upon a health care provider who willfully receives Medical Assistance payments to which the provider is either not entitled or that are in a greater amount than that to which the provider is entitled. The law also allows penalties to be imposed upon an individual or an entity, such as Hospital, that: (1) knowingly and willfully makes or causes to be made any false statement or false representation of a material fact in any claim form in order to receive payment; (2) knowingly and willfully makes or causes to be made any written or oral false statement for use in determining rights to such payment; or (3) conceals or fails to disclose the occurrence of an event which affects the right to receive such a payment. Penalties may also be imposed if false statements or representations of a material fact are made in connection with the conditions or operations of any institution, such as Hospital, during an initial or recertification process entitling the facility to payments under the Medical Assistance Program. In addition to criminal fines and jail sentences, violators of this Act are also subject to civil penalties, which can include treble damages, interest on the overpayments, and not less than and not more than the civil penalty allowed under the Federal False Claims Act for each false claim submitted.
H. Health Care Claims Fraud Act.
The crime of Health Care Claims Fraud is committed when a false, fictitious or fraudulent or misleading statement of material fact is knowingly or recklessly submitted (or is attempted to be submitted) or a material fact is omitted from any record, bill, claim or other documents in connection with payment or reimbursement for health care services by either a licensed health care practitioner or an unlicensed person. The penalty is a fine of up to five times the monetary amount obtained or sought.
I. False Claim for Payment of a Government Contract.
Another New Jersey state statute makes it a crime to: (1) knowingly submit to the government any claim for payment for performance of a government contract knowing that the claim is false, fictitious or fraudulent; and (2) knowingly make a material representation that is false in connection with the negotiation, award or performance of a government contract. The criminal penalties for violations of this statute vary from a crime in the fourth degree to a crime in the second degree depending on the amount of the claim.
J. Whistleblower Protections.
Under New Jersey's Conscientious Employee Protection Act, employers are prevented from taking any retaliatory actions against an employee who discloses (or threatens to disclose) to a supervisor or a public body any activity, policy, or practice of the employer that the employee reasonably believes is fraudulent or criminal and that may defraud a patient or governmental entity, among others. In addition, the Act protects employees who object or refuse to participate in such activity, policy or practice. Specific protection is also given to licensed or certified health care professionals who object to or refuse to participate in an activity, policy or practice that the employee reasonably believes constitutes improper quality of care.
ATTACHMENT A
False Claims Act - Information Sheet
Pursuant to the Deficit Reduction Act of 2005, Warren Hospital is required to provide you with the following information about federal and state laws pertaining to false claims and their accompanying whistleblower provisions. Warren Hospital has adopted, as part of its Compliance Program, a policy, the False Claims Act Policy, in order to satisfy these requirements. The False Claims Act Policy describes laws targeted at controlling waste, fraud and abuse in federal and state health care programs by giving appropriate governmental agencies the authority to investigate potential violations.False Claims Act - Information Sheet
Federal False Claims Act; Whistleblower Actions and Protections.
Under the Federal False Claims Act, those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds are liable for three times the government's damages plus civil penalties of $5,500 to $11,000 per false claim.
A "claim" includes any request for money which is made to a contractor, grantee, or other recipient if the government provides any portion of the money which is requested, or if the government will reimburse such contractor, grantee or other recipient for any portion of the requested money.
The Federal False Claims Act authorizes an individual to bring a whistleblower or Qui Tam action as a private person. An individual seeking to file an action as a whistleblower, must first file a complaint in Federal district court and allow the government to investigate the claim.
The Federal False Claims Act forbids retaliation by an employer against an employee who filed a whistleblower action. Any employee discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against by his or her employer bringing a whistleblower claim, may sue for reinstatement and double lost wages, plus interest and any other special damages sustained including litigation costs and reasonable attorney's fees.
New Jersey False Claims Act; Whistleblower Actions and Protections.
The New Jersey False Claims Act was enacted in 2008 and imposes liability for making false claims to the State for payment or approval. Anyone who violates the New Jersey False Claims Act is liable for the same penalties as set forth in the Federal False Claims Act. In addition, violations of the New Jersey False Claims Act give rise to liability under the Medical Assistance and Health Services Act.
The New Jersey False Claims Act authorizes an individual to bring a whistleblower action as a private person. An individual seeking to file an action as a whistleblower, must first allow the State Attorney General to investigate the claim. The New Jersey False Claims Act forbids retaliation by an employer against an employee who filed a whistleblower action.
New Jersey Fraud Prevention Act.
This law makes it unlawful to: (1) present or cause to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy knowing the statement contains false or misleading information concerning any fact or thing material to the claim; or (2) conceal or knowingly fail to disclose the occurrence of an event which affects any person’s initial or continued right or entitlement to any insurance benefit of payment or the amount of any benefit or payment to which the person is entitled. A violation of this law can subject a person or entity to civil damages equal to three times the amount of damages; penalties of $5,000 for the first offense, $10,000 for the second offense and $15,000 for each subsequent offense; and a surcharge paid to the State of $1,000 or five percent (5%) of an out-of-court settlement. In addition, the Act authorizes the Attorney General to pursue additional criminal penalties.
The Medical Assistance and Health Services Act.
This law allows for the imposition of criminal fines and terms of imprisonment for violations involving the submission of claims for payment under the Medical Assistance Program. The law also allows penalties to be imposed upon an individual or an entity that: (1) knowingly and willfully makes or causes to be made any false statement or false representation of a material fact in any claim form in order to receive payment; (2) knowingly and willfully makes or causes to be made any written or oral false statement for use in determining such payment; or (3) conceals or fails to disclose the occurrence of an event which affects the right to receive such a payment. Penalties may also be imposed if false statements or representations of a material fact are made in connection with the conditions or operations of any institution during an initial or recertification process entitling the facility to payments under the Medical Assistance Program. In addition to criminal fines and jail sentences, violators of this Act are also subject to civil penalties, which can include treble damages, interest on the overpayments, and not less than and not more than the civil penalty allowed under the Federal False Claims Act for each false claim submitted.
Health Care Claims Fraud.
Health Care Claims Fraud is committed when a false, fictitious or fraudulent or misleading statement of material fact is knowingly or recklessly submitted (or is attempted to be submitted) or a material fact is omitted from any record, bill, claim or other documents in connection with payment or reimbursement for health care services by either a licensed health care practitioner or an unlicensed person. The penalty is a fine of up to five times the monetary amount obtained or sought.
False Claim for Payment of a Government Contract.
It is a crime to: (1) knowingly submit to the government any claim for payment for performance of a government contract knowing that the claim is false, fictitious or fraudulent; and (2) knowingly make a material representation that is false in connection with the negotiation, award or performance of a government contract. The criminal penalties for violations of this statute vary from a crime in the fourth degree to a crime in the second degree depending on the amount of the claim.
Whistleblower Protections.
Under CEPA, employers are prevented from taking any retaliatory actions against an employee who discloses (or threatens to disclose) to a supervisor or a public body any activity, policy, or practice of the employer that the employee reasonably believes is fraudulent or criminal and that may defraud a patient or governmental entity, among others. In addition, the Act protects employees who object or refuse to participate in such activity, policy or practice. Specific protection is also given to licensed or certified health care professionals who object to or refuse to participate in an activity, policy or practice that the employee reasonably believes constitutes improper quality of care.
If you would like additional information regarding the foregoing, please contact the Compliance Officer or Hospital legal counsel.