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Corporate Compliance

The Federal False Claims Act and Whistleblower Protection Education Policy

The Regulatory Compliance Program at Cayuga Medical Center demonstrates our commitment to uphold all federal and state laws and regulations, and to inhibit fraud, waste, and abuse in the hospital. The purpose of this section of our Web site is to inform employees, contractors, and agents of Cayuga Medical Center about the federal False Claims Act (FCA) and the federal Program Fraud Civil Remedies Act (PFCRA).

If after you review this policy you have questions, please contact the Corporate Compliance Department at (607) 274-4494.

Policy

This compliance program applies to administrative, exempt and non-exempt staff, professionals, contracted personnel, medical staff, volunteers, students, and other agents (collectively referred to as “employees and other agents”).

Our program policies and procedures have been established to ensure that employees and other agents have access to guidance and protocols that should be followed in performing their duties. The policies and procedures set forth here are mandatory and must be followed as a condition of employment or affiliation with Cayuga Medical Center.

Monitoring and Periodic Auditing

Billing and Coding Edits – Cayuga Medical Center has implemented various billing and coding edit software packages to assist in detecting billing and coding which is not compliant with rules associated with federal health care programs, such as Medicare and Medicaid.

Audits – The Corporate Compliance Department performs audits of medical records and billing to ensure compliance with the billing requirements of federal health care programs. In addition, Corporate Compliance performs periodic internal audits designed to detect fraud, waste and abuse. Many of these audits focus on high-risk areas such as those identified in the U.S. Office of Inspector General’s Annual Work Plan.

Investigations – The Corporate Compliance Department performs investigations based upon reports of possible fraud, waste or abuse associated with federal health care programs.

Background Checks – Cayuga Medical Center’s Department of Human Resources performs criminal background checks on individuals following an offer of employment, but prior to the individual starting work. Based on the results of the criminal background check, an individual’s offer of employment may be rescinded. Our Corporate Compliance Department also checks all vendors and members of the medical staff against various lists published by federal and New York State agencies. These lists identify, among other things, individuals, and entities who have been convicted of health-care fraud. Appropriate steps are taken with regard to individuals and entities appearing on a list.

Reporting Mechanisms

Anyone may report concerns through the Compliance Hotline: (607) 274-4170 on an anonymous basis. In addition, reporting can be made directly to the Corporate Compliance Department staff.

Personal Obligation to Report

Every individual employed or otherwise affiliated with the medical center is expected to raise issues of concern or suspected violations promptly. We encourage individual responsibility for reporting any activity by any colleague, physician, independent contractor, or vendor, etc. that violates applicable laws and regulations, or Regulatory Compliance Program requirements.

The Regulatory Compliance Committee has adopted an Organizational Response and Reporting Protocol which outlines the process the Medical Center will follow in responding to incidents of potential non-compliance detected through its reporting system. The compliance director and officer will follow this protocol to ensure the investigation, follow-up, and corrective action of the reported violation maximizes the medical center’s right to attorney-client privilege and confidentiality.

Cayuga Medical Center Whistleblower Protections

There will be no retaliation against anyone who internally reports a concern made in good faith (meaning the individual has reason to believe there is a factual basis for the concern). Concerns are reported to the Corporate Compliance Department staff.

All reported concerns and claims of retaliation will be investigated and any individual whom Cayuga Medical Center believes has engaged in acts of retaliation will be subject to appropriate corrective action.

Summary of Federal and State Laws Related to Fraud, Waste, and Abuse in Federal Health Care Programs

Federal Laws

The federal False Claims Act (FCA) prohibits any individual or entity from knowingly submitting a false or fraudulent claim for payment to the US government, or making a false record or statement to get such a claim paid. Under the law, “knowingly” means that the person or entity either has actual knowledge of the false information or that the person has acted in deliberate ignorance or reckless disregard of the truth or falsity.

This law is relevant to health care because hospitals and physician practices routinely submit claims for payment to the federal government under Medicare. Claims presented to New York State Medicaid can also be false claims under the FCA because Medicaid is funded by both the state and federal governments.

Legal proceedings to enforce the FCA are generally handled by the US Attorney General through the Department of Justice, but may also be subject to qui tam enforcement described below. A person or entity violating the FCA is liable to the US government for a civil penalty of not less than $5,000 and not more than $10,000, plus triple damages sustained by the US government. If a Medicaid claim is involved, the recovery of damages will be shared between the federal and state governments.

Whistleblower Provisions

The FCA also includes “qui tam” or whistleblower provisions. These permit private parties to bring a civil action for violation of the FCA. Such an action is brought in the name of the private person (the “relator”) as well as the name of the US government; hence the words qui tam meaning “in the name or place of the state/government.”

The FCA provides a detailed procedure for a private person to bring a qui tam action, and requires, among other things, that the action remain under seal for at least sixty days during which time the government evaluates whether to intervene in (become a party to) the action. If the government intervenes, it takes over control of the action, although the relator may still participate subject to certain statutory limitations.

These provisions also permit the relator to benefit financially from the suit. If the government has intervened in a qui tam action, the relator may receive between 15 percent and 25 percent of the proceeds of the action or settlement. If the government does not intervene but the action is allowed to be continued by the relator, then the relator may receive between 25 percent and 30 percent of the proceeds of the action plus costs and attorneys fees. However, if the action is frivolous and has no merit, the relator may be responsible for paying the defendant’s costs and attorneys fees.

The FCA also prohibits an employer from taking any retaliatory action against an employee who brings a false claims lawsuit or against an employee who has any part in the prosecution of such a suit, and allows an employee to sue an employer claiming the employer engaged in retaliatory action.

Federal Administrative Provisions

Federal law also provides for administrative remedies for situations in which a person or entity submits a claim if the claimant has reason to know such claims are false or are supported by a materially false statement. “Administrative remedies” means that a federal agency is responsible for enforcement and conducts the investigation and proceedings instead of the matter first going to court. The law applies to all claims made to the federal government including Medicaid claims because Medicaid is partially funded by the federal government.

The consequence of violating this law is that the violator will be subject to a civil penalty of up to $5,000 for each false claim and an assessment of damages up to twice the amount of the claim. There is no qui tam (private enforcement) provision under this law. Under the administrative process, the federal agency conducts an investigation of the allegations and, if the agency believes there is sufficient evidence to support the allegations, the matter is sent to the US Attorney General who may send it on to an administrative law judge for a hearing. If an administrative hearing is conducted, it is similar to court proceedings (with the right to counsel, to know the evidence, to confront and cross-examine witnesses and to offer a defense). There is also an appeals process. The penalty or assessment against the violator, if upheld, is then recovered by the US Attorney General.

New York State Laws

New York State law also has provisions related to false claims and statements, and provides whistleblower protection. New York Social Services Law makes it illegal to knowingly (through a false statement or representation, or deliberate concealment of a material fact, or other scheme or device) attempt to obtain or in fact obtain payment from public funds for services or supplies under the Medicaid program.

Other provisions provide remedies to the Department of Health (DOH) to seek a monetary penalty as restitution to the Medicaid program if a person who provided or ordered services knew or should have known that the services were:

  • medically unnecessary
  • were not properly documented
  • were not provided as claimed or not provided at all
  • or were ordered or provided by a provider who was suspended or excluded from Medicaid.

Remedies include recovery of triple damages for violations. Enforcement is generally accomplished by referral to the Medicaid Inspector General (MIG), which reports directly to the Governor. The MIG can make referrals to the Medicaid Fraud Control Unit of New York State, an arm of the State Attorney General, if the MIG believes that criminal prosecution may be warranted. New York State Social Services law makes health care fraud a crime; depending upon the amount of money involved, it ranges from a class B felony to a class A misdemeanor. Health care fraud is defined as when a person knowingly and willfully provides materially false information or omits material information for the purpose of requesting payment from a health plan for a health-care item or service, and as a result, he or she or another person received payment in an amount they are not entitled to under the circumstances.

New York State does not have a qui tam or whistleblower law: a private person may not sue for violation of the state false claims act. New York does have provisions protecting employees from employer retaliation if an employee discloses or threatens to disclose to a supervisor or public body, any activity, policy or practice of the employer which constitutes health care fraud. In order to be eligible for this protection, the employee must bring the questionable activity, policy or practice to the attention of his/her supervisor so that the employer has an opportunity to take corrective action. If the employee does not, then the law doesn’t protect the employee from retaliation. An employee who has been wrongfully retaliated against can sue the employer.

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