External. Excluded Products within the Selected Lines of Business (LOB)

Transcription

1 Fraud Laws and Whistleblwer Rights and Prtectins Plicy Number: M Effective Date: 1/1/2007 Spnsring Department: Impacted Department(s): Cmpliance All Type f Plicy: Internal External Applies t (Line f Business): Crprate (All) State Prducts, if yes which plan(s): MediSurce/FHP; Child Health Plus Medicare, if yes, which plan(s): MAPD; PDP/EGWP Cmmercial, if yes, which type: Large Grup; Small Grup; Individual Excluded Prducts within the Selected Lines f Business (LOB) N/A Applicable t Vendrs? Yes N Purpse and Applicability: T explain the Federal and State laws abut false and fraudulent claims and the penalties assciated with false and fraudulent claims. T explain the legal remedies and prtectins available t whistleblwers wh make reprts t the Gvernment abut false and fraudulent claims. RESPONSIBLE DEPARTMENTS: Special Investigatins Unit (SIU), Legal, Cmpliance Plicy: Independent Health has a cmprehensive fraud and abuse prgram which is led by its Special Investigatins Unit (SIU) and is designed t detect, crrect, prevent and reprt ptentially illegal and fraudulent practices. One facet f Independent Health s cmprehensive fraud and abuse prgram prvides ur emplyees and cntractrs and their emplyees with detailed, educatinal infrmatin abut a few f the fraud and abuse laws we are gverned and required by law t Restricted P a g e 1

2 fllw. Cllectively, these laws and rules create a framewrk fr Federal and State Gvernments t detect and prevent fraud and abuse in the health care system and t prtect the individuals and entities wh prvide infrmatin t the Gvernment abut such fraud and abuse. This plicy cntains imprtant infrmatin abut Federal and State fraud and abuse laws and whistleblwer prtectin laws. If yu are an emplyee f Independent Health, additinal infrmatin abut these laws can be btained by cntacting the Legal Department. Independent Health's fraud and abuse-related plicies and business prcesses are psted n the Insider under Crprate Plicies & Prcedures and SIU Fraud and Abuse. Emplyees wh believe they have encuntered fraud r a vilatin f law r any questinable activity are required t reprt it t the Special Investigatins Unit at If yu are a cntractr f Independent Health r an emplyee f a cntractr f Independent Health, this infrmatin is prvided t yu t cmply with Sectin 6032 f the United States Deficit Reductin Act f 2005, certain Medicare laws, rules, regulatins and requirements under the Medicare Part D Prgram, as well as ther Federal and State laws. If yu believe yu have encuntered fraud related t yur business dealings with Independent Health, we encurage yu t reprt the infrmatin t us by cntacting Independent Health s SIU at Als, please review this plicy. If yu wuld like mre infrmatin abut the laws described in this dcument, please cnsult with yur attrney. Federal Law: Federal False Claims Act Direct False Claims: A civil lawsuit can be brught by the United States Gvernment against any persn wh knwingly makes a false claim t btain mney r prperty, any part f which is prvided t the Gvernment directly r indirectly t a persn, agent r cntractr f the Gvernment, a grantee f the Gvernment r a recipient f any mney r prperty frm the Gvernment. False Recrds: A civil lawsuit can be brught by the United States Gvernment against any persn wh knwingly makes, uses r causes t be made r used, a false recrd r statement material t a false r fraudulent claim. The wrd material means having a natural tendency t influence, r be capable f influencing the payment r receipt f mney r prperty. In rder t make its case, the Gvernment des nt have t demnstrate a direct cnnectin between the false recrd r statement and the Gvernment s payment f a claim. In additin, a persn r entity can be held respnsible fr damages in the amunt f $50,000 fr each false recrd r statement. Underpayments: A civil lawsuit can be brught by the United States Gvernment against any persn wh knwingly makes underpayments t the Gvernment. Certificatins: A civil lawsuit can be brught by the United States Gvernment against any persn wh, with intentin t defraud the Gvernment, certifies receipt f Gvernment mney r prperty withut cmpletely knwing that the receipt is true and crrect. Restricted P a g e 2

3 Imprper Prperty Transfers: A civil lawsuit can be brught by the United States Gvernment against any persn wh knwingly buys r receives as a pledge f an bligatin r debt, public prperty frm an fficer r emplyee f the United States Gvernment, wh lawfully may nt sell r pledge prperty. Overpayments: An verpayment means a health plan receives funds under the Medicare r Medicaid prgram and, after apprpriate recnciliatin; it retains them even thugh it is nt entitled t d that. Under the Federal False Claims Act, Independent Health must reprt and return Overpayments t the Secretary f the United States Department f Health and Human Services, New Yrk State, a Gvernment intermediary, carrier r cntractr within 60 days f the date the verpayment was identified r the date any crrespnding cst reprt is due, if any. When Independent Health returns an verpayment, it must include a written statement indicating the reasn why the verpayment is being returned. A civil lawsuit can be brught by the Gvernment against any persn wh knwingly retains an Overpayment when there was an bligatin t repay the Gvernment. This part f the False Claims Act is ften referred t as a reverse false claim. Anti-Kickback Law Claims: The Anti-Kickback Law is discussed in mre detail later in this plicy under the heading entitled Federal Health Care Prgram Anti-Kickback Law. There are times when a vilatin f the Anti-Kickback Law will als be cnsidered a vilatin f the Federal False Claims Act. Penalties will be assessed under bth Federal laws. Cnspiracy: A lawsuit can als be brught against any persn wh cnspires t cmmit any f the acts just described in this sectin. Imprtant Definitins in the Federal False Claims Act: A claim means any request r demand, whether under a cntract r therwise, fr mney r prperty and regardless f whether the Gvernment has title t the prperty that is presented t the Gvernment r t a Gvernment cntractr, grantee r ther recipient if the mney r prperty is ging t be spent n the Gvernment s behalf r in a way that advances any Gvernment prgram r interest. This is an extremely brad definitin. Knwingly" means the persn: 1. Has actual knwledge f the infrmatin; 2. Acts in deliberate ignrance f the truth r falsity f the infrmatin; r 3. Acts in reckless disregard fr the truth r falsity f the infrmatin. T make a case against an individual r entity, the Gvernment nly has t prve that the fraud against the Gvernment ccurred. The Gvernment des nt have t prve the persn r entity had a specific mental state r intentin t defraud the Gvernment. Damages under the Federal False Claims Act: The persn can be held respnsible fr damages fr: up t three times the amunt f the damage the Gvernment sustains plus mandatry penalties ranging frm $5,000 t $10,000 (these penalty Restricted P a g e 3

4 ranges can be adjusted fr inflatin) plus the csts f any civil lawsuit brught against him r her by the Gvernment. Sme examples f ptentially prblematic activities under the Federal False Claims Act: Knwingly falsifying recrds that are then used t get a false claim paid (please nte, the ptential penalty fr this type f vilatin is $50,000 fr each false recrd r statement). Duble billing. Submitting bills fr services that were never perfrmed. Retentin f an verpayment where there is an bligatin t repay. Inaccurately reprting r certifying data in bids and rate prpsals. Using inaccurate data t supprt reprted claims experience and lss ratis. Failing t crrectly reprt rating r discunts fr similarly sized subscriber grups under Federal Emplyee Health Benefits (FEHB). Falsely certifying cmpliance with Medicaid Managed Care marketing r ther prgram requirements. Manipulating prvider r vendr dealings t distrt reprted claims experience in ur gvernment prgrams. Making any false statement, missin r misrepresentatin in any applicatin, bid r cntract t participate in Medicare Advantage, Medicare Part D plan r Medicaid Managed Care (please nte, the ptential penalty fr this type f vilatin is $50,000 fr each false statement r misrepresentatin and nt mre than three times the ttal amunt claimed fr each item r service fr which payments were received and was based n the applicatin which cntained the false statement). Administrative Remedies fr False Claims and Statements: Anther false claims prvisin that wrks tgether with the Federal False Claims Act is the Prgram Fraud and Civil Remedies Act. This prvisin expands the damages listed abve s that a persn wh knwingly submits a false claim is liable fr a civil penalty f up t $5,000 fr each false claim submitted and may als be subject t an assessment f up t twice the amunt f each false claim submitted. The United States Attrney General s Office is respnsible fr investigating the allegatins, filing the actin, hlding hearings, issuing subpenas and cllecting the penalties assessed. Federal False Claims Act Qui Tam Lawsuits: The Federal False Claims Act allws "qui tam" actins. These lawsuits are brught n behalf f the Gvernment by an emplyee, a cntractr r ne f Independent Health s agents wh knws abut the fraud. The individual sues as an individual and n behalf f the Gvernment. The individual wh brings the lawsuit is called a "whistleblwer" r a qui tam relatr. Hw this wrks: The individual files a lawsuit n behalf f the Gvernment in a federal district curt "under seal." Under seal means the lawsuit will be cnfidential when the Gvernment investigates it and decides whether t jin in the lawsuit. If the Restricted P a g e 4

5 Gvernment jins in the lawsuit, the lawsuit will be directed by the United States Department f Justice. If the Gvernment des nt jin the lawsuit, the individual will cntinue t lead the lawsuit. When: Qui tam lawsuits must be filed by the individual within six years f the alleged vilatin r n mre than three years after the date the Gvernment knws r reasnably shuld knw abut the alleged vilatin, but in n event mre than 10 years after the vilatin was cmmitted. Awards: If the Gvernment jins in the lawsuit and the lawsuit is successful, the individual may receive between 15% and 25% f the prceeds f the lawsuit. If the Gvernment des nt jin in the lawsuit and the lawsuit is successful, the individual may receive between 25% and 30% f the prceeds. Special Prtectins: In additin t the financial awards prvided t the individual, the Federal False Claims Act strives t make the individual whle and prvide them with all relief necessary t d that such as reinstatement with the same senirity status, tw times the amunt f back pay (plus interest) and ther special cmpensatin due t the emplyer s retaliatry cnduct (r the business partner s retaliatry cnduct) against the individual fr filing the qui tam lawsuit, such as litigatin csts and reasnable attrney s fees. Federal Health Care Prgram Anti-Kickback Law: Individuals and entities can be held liable under the Federal health care prgram anti-kickback law ( Anti-Kickback Law ) fr knwingly and willfully ffering, paying, sliciting r receiving remuneratin in exchange fr referring, furnishing, purchasing, leasing r rdering any gd, facility, service r item that is paid fr in whle r in part by Medicare r Medicaid prgrams r ther Federal health care prgrams. Bth the recipient f the remuneratin and the individual r entity wh ffers the remuneratin is subject t the Anti-Kickback Law. Remuneratin: Remuneratin means any kickback, bribe, discunt, rebate made in cash r in kind, regardless f whether it was paid directly r indirectly. The Gvernment defines the wrd remuneratin very bradly. Remuneratin that is intended t induce referrals is banned and s is remuneratin that is intended t induce the purchasing, leasing, rdering r arranging fr any gd, facility, service r item paid fr by a Federal health care prgram. Exceptins: The Gvernment has issued regulatins that create a list f practices that d nt vilate the Anti-Kickback Law. These practices are cmmnly referred t as safe harbrs. The safe harbrs cver a small number f payment practices such as: The waiver f cinsurance and deductible amunts under certain specific cnditins. Giving incentives t individuals t prmte the delivery f preventive care. Remuneratin which prmtes access t care and which pses a lw risk f harm t patients and Federal health care prgrams. Offering r transferring cupns and rebates r ther retailer rewards fr free r less than fair market value if certain cnditins are met, Restricted P a g e 5

6 Offering r transferring items r services fr free r less than market value if: (a) they are nt ffered thrugh an advertisement, (b) they are nt tied t an item r service that is reimbursable under a federal r state health care prgram, (c) there is a reasnable cnnectin between the items r services ffered and the individual s medical care, (d) the individual receiving the item r service is in financial need, As f January 1, 2011, the waiver f any cpayment fr the first prescriptin fill f a generic drug that is cvered by Medicare Part D. These are narrw exceptins t the Anti-Kickback Law s prhibited practices. If yu wuld like mre infrmatin abut the Anti-Kickback Law s safe harbrs, please cntact an attrney in the Legal Department. If yu are a cntractr f Independent Health, please cnsult with yur attrney. Damages: A persn r entity can be held criminally and/r civilly liable fr vilating the Anti-Kickback Law. The criminal penalty is a fine f up t $25,000 and/r imprisnment f up t five years. An Anti- Kickback Law vilatr can als be excluded frm participatin in a Federal health care prgram. On the civil side, a persn r entity can be required t pay the Gvernment up t three times the amunt f the ttal remuneratin ffered, paid, slicited r received plus a $50,000 fine fr each vilatin f the Anti- Kickback Law. Self Reprting Vilatins: As a cntractr f the United States Department f Health and Human Services ( HHS ) Centers fr Medicare and Medicaid Services ( CMS ) fr varius Medicare prducts. Independent Health must reprt t the HHS Office f the Inspectr General in writing and send a carbn cpy t the CMS fficial in charge f Independent Health s cntract with CMS when it has credible evidence that ne f its fficers, directrs, emplyees, agents r Medicare-related subcntractrs has vilated: Federal criminal law invlving fraud, cnflict f interest, bribery r gratuity vilatins in Title 18 f the United States Cde; r The Federal False Claims Act. When making such reprts t the Gvernment, Independent Health shall mark each page f its written reprt as Cnfidential. Federal Audits: Federal law permits the HHS t audit Independent Health fr ptential vilatins f a variety f Federal fraud laws, regulatins and rules. If Independent Health des nt grant the Gvernment timely access t ur facilities, recrds and systems s they can perfrm their audits, investigatins and evaluatins, Independent Health can be subject t a penalty in the amunt f $15,000 per day. New Yrk State Law New Yrk False Claims Act A civil lawsuit can be brught by the New Yrk State Attrney General and r any lcal Gvernment against any persn wh des any f the fllwing activities: Restricted P a g e 6

7 Knwingly presenting a false claim t the State r a lcal Gvernment r a Medicaid Managed Care plan; Knwingly making use f a false recrd t receive payment frm the State r a lcal Gvernment r a Medicaid Managed Care plan; Cnspiring t defraud the State r a lcal Gvernment by getting a claim paid; Delivering, r causing t be delivered, t the State r a lcal Gvernment less prperty r mney than the amunt fr which a persn receives a Certificate f Receipt, with an intent t defraud r willfully t cnceal the prperty r mney; Making r delivering, with intent t defraud, a certifying receipt t the State r lcal Gvernment withut cmpletely knwing that the infrmatin n the receipt is true; Knwingly buying r receiving as a pledge f an bligatin r debt, public prperty frm a State fficer r emplyee knwing that the prperty may nt be lawfully sld r pledged; and Knwingly making, using r causing t be used a false recrd r statement t cnceal, avid r decrease an bligatin f mney r prperty t the State r a lcal Gvernment. Damages: The persn can be held respnsible fr damages fr: (1) a civil penalty f $6,000 t $12,000 paid t the State, (2) three times the amunt f damages the State suffers ( treble damages ), (3) three times the amunt f damages any lcal Gvernment suffers; and (4) the cst f any civil lawsuits and attrney s fees brught t recver any such penalties and damages. A curt may reduce treble damages t duble damages if: (1) the vilatr furnishes all infrmatin t the fficials wh are investigating the vilatin within 30 days f the vilatr btaining that infrmatin; (2) the vilatr fully cperates with the Gvernment s investigatin; and (3) at the time the vilatr prvides the infrmatin, n criminal, civil r administrative actin had begun and the vilatr did nt have actual knwledge f any investigatin. New Yrk False Claims Act Qui Tam Lawsuits: Similar t the Federal False Claims Act, the State False Claims als allws qui tam actins. These lawsuits are brught by an individual wh knws abut the fraud. This individual is called a whistleblwer r a qui tam relatr. The Gvernment wrks with the individual and decides whether t get invlved in the lawsuit. Hw this wrks: The individual files a lawsuit in New Yrk State Supreme Curt, a trial level curt f law. The individual s cmplaint is sealed and kept cnfidential fr at least 60 days. During that perid f time, the Gvernment will investigate the cmplaint and decide whether t get invlved in the case. The Gvernment may either: (1) take ver the case cmpletely and re-file the lawsuit in the name f the State f New Yrk; (2) jin in the lawsuit and help the individual wh filed the lawsuit; r (3) decide nt t participate at all. If the Gvernment jins in the case, the Gvernment will try the case t its cmpletin r settle the case. The curt will determine if a settlement is fair befre it is finalized. When: Qui tam lawsuits must be filed by the individual within six years f the vilatin r three years after the date facts that are material t the case are knwn r reasnably shuld have been knwn t the Gvernment fficial charged with the respnsibility t act in the circumstances, whichever ccurs last. In n event may the lawsuit be brught later than 10 years after the vilatin was cmmitted. Restricted P a g e 7

8 Awards: If the Gvernment gets invlved in the lawsuit and the lawsuit is successful, the individual is entitled t 15%-25% f the ttal recvery r the settlement. If the Gvernment des nt get invlved in the lawsuit and the lawsuit is successful, the individual is entitled t 25% 30% f the ttal recvery r the settlement. The curt may als award reasnable csts and expenses, including attrney s fees. An individual s recvery may be reduced t 10% f the prceeds f the lawsuit r a settlement if the curt finds that the lawsuit was based mainly n disclsures frm smene ther than the individual wh started the lawsuit which are cnnected t allegatins in a criminal, civil r administrative hearing r in a legislative r administrative reprt, hearing audit, r investigatin r frm the news media. Antiretaliatin Prtectins: If an emplyer discharges, demtes, suspends, threatens, harasses r is therwise discriminated against ne f its emplyees fr filing a State False Claims Act lawsuit, the emplyee is entitled t all relief necessary t put the persn in the psitin he r she was in befre the discriminatin. Fr example, the emplyee may be entitled t reinstatement t a psitin he r she wuld have had if the discriminatin did nt ccur r tw times the amunt f back-pay. An emplyee may file anther lawsuit t get the relief needed t make him r her whle. Unacceptable Practices Under Medicaid: New Yrk State law makes knwingly submitting a false statement and claim a Class A misdemeanr under the New Yrk State criminal law. New Yrk law als lists certain prhibited practices fr cmpanies and individuals invlved in prviding benefits r services t Medicaid recipients. The unacceptable practices include, but are nt limited t: Making false claims fr medical care r services; Making false statements relating t claims fr payment fr medical services r supplies; Failing t disclse infrmatin abut the right t payment; Taking a medical assistance payment and using it fr smething ther than medical assistance; Taking bribes and kickbacks and inapprpriate referrals; Unacceptable recrdkeeping practices; Submitting claims r accepting payments fr medical care, services r supplies ffered by a persn wh is nt qualified t participate in the Medicaid prgram; Receiving additinal payments fr services r supplies fr which a Medicaid claim has been made; Deceiving a Medicaid recipient in any way; Furnishing excessive medical care, services r supplies t a Medicaid recipient; Any cnspiracy t d any the activities listed abve; and Unlawful discriminatin against a Medicaid recipient. Recvery f Overpayments in the Medicaid Prgram: The New Yrk State Department f Health (DOH) is authrized t recver fraudulent verpayments, unauthrized payments and therwise inapprpriate payments made in cnnectin with Medicaid. In sme cases the DOH is authrized t recver the amunt f the verpayment and impse a mnetary penalty, while in ther cases the DOH may nly recver the verpayment r impse a penalty. When Restricted P a g e 8

9 the DOH recvers verpayments, it may nly recver the amunt f the claim. If the DOH impses a penalty, the penalty cannt exceed $10,000. Althugh, this $10,000 limit can increase t $30,000 in cases where the DOH has penalized the same individual during the previus five year time frame. Fraud Against a Health Plan: New Yrk State criminal law cntains specific prvisins abut fraud against health plans. T be guilty f healthcare fraud against a health plan, a persn must d the fllwing: Act with intend t defraud a health plan; Knwingly and willfully prvide materially false infrmatin r mit infrmatin t request payments frm a health plan fr a healthcare item r service; and Actually receive a payment he r she r anther persn is nt entitled t receive. If a persn's actins satisfy thse three elements, the persn can be fund guilty f healthcare fraud in the 5th degree, which is a Class A misdemeanr. There are fur ther levels f healthcare fraud which increase in severity based n the cmmissin f healthcare fraud in the 5th degree plus the amunt f mney the persn receives frm the health plan because f the fraud. The ther levels f healthcare fraud ( HCF ) against a New Yrk health plan are listed belw: HCF in the 4th degree means 5th degree HCF plus receipt f $3,000 frm the health plan. HCF in the 3rd degree means 5th degree HCF plus receipt f mre than $10,000 frm the health plan. HCF in the 2nd degree means 5th degree HCF plus receipt f mre than $50,000 frm the health plan. HCF in the 1st degree means 5th degree HCF plus receipt f mre than $1,000,000 frm the health plan. New Yrk Whistleblwer Prtectins (N Retaliatin): New Yrk law prevents an emplyer frm retaliating against any emplyee fr disclsing r threatening t disclse t a supervisr r a public bdy any activity, plicy r practice f the emplyer that vilates a law and presents a substantial and specific danger t public health r safety r which cnstitutes healthcare fraud. This is an anti-retaliatin prvisin and it nly applies if the emplyee has brught the issue t the attentin f his r her supervisr and gave the emplyer a reasnable pprtunity t crrect the activity, plicy r practice. Remedies fr the Emplyee: An emplyee wh was retaliated against by an emplyer may bring a civil lawsuit in a New Yrk State curt against his/her emplyer within ne year after the alleged retaliatry cnduct. If the emplyee wins the lawsuit, a curt may require the emplyer: (1) t stp the alleged vilatin f law, plicy r practice; (2) t reinstate the emplyee t his r her prir emplyment psitin; (3) t reinstate the emplyee s benefits and Restricted P a g e 9

10 senirity rights; (4) t ffer the emplyee full cmpensatin fr lst wages, benefits and ther remuneratin; and, r (5) t pay the emplyee's reasnable csts and attrney's fees. Definitins Abuse is any incident r practice f a prvider, physician r supplier which, althugh nt usually cnsidered fraudulent, is incnsistent with accepted and sund medical, business r fiscal practices and directly r indirectly results in services that fail t meet prfessinally-recgnized standards f care r, in sme cases, may be medically unnecessary. Fraud is an intentinal deceptin r misrepresentatin that the individual r entity makes knwing that the misrepresentatin culd result in sme unauthrized benefit t the individual, r the entity, r t sme ther party. Gvernment means either the Federal Gvernment r the State Gvernment respectively. Vendr r cntractr means an external entity that prvides gds and services t Independent Health under a valid, written and executed agreement. References Related Plicies, Prcesses and Other Dcuments Enter name f all Independent Health plicies, prcesses r ther dcuments that relates r that is referenced within this plicy. Regulatry References 28 C.F.R C.F.R (b)(4)(vi)(Medicare Part D Prescriptin Drug Benefit Regulatins) 42 C.F.R (b)(4)(vi)(Medicare Advantage Prgram Regulatins) 42 C.F.R , et. seq. 31 U.S.C. 3729, et. seq. 31 U.S.C. 3801, et. seq. 42 U.S.C. 1320a-7, 1320a-7a, 1320a-7b(b), Deficit Reductin Act f 2005, Pub. L. N , 6032, 120 Stat. 4 (2006) (cdified as 42 U.S.C. 1396a(a)(68)(2006)) Fraud Enfrcement and Recvery Act f 2009, Pub. L. N , 4, 123 Stat (2009) (cdified as 31 U.S.C. 3729, 3730(h), 3732(c), 3733 (2009)) Patient Prtectin and Affrdable Care Act f 2010, Pub. L. N , 6402, 6408, and 10606, 124 Stat. 119 (2010) (cdified as 42 U.S.C. 1320a-7K(d), 42 Restricted P a g e 10

11 U.S.C. 1320a-7(b)(16) (g) and (h), 42 U.S.C. 1320a-7a(a)(8) and (9), (i)(6)(f)- (I), 18 U.S.C. 1347(b)). 48 C.F.R (b)(3) N.Y. State Fin. Law N.Y. Sc. Serv. Law 366-b and 145-b(4) 18 NYCRR N.Y. Penal Law N.Y. Lab. Law 740 Versin Cntrl Spnsred By: Name spnsr: Jhn Mine Title f spnsr: SVP General Cunsel Signature f spnsr: Click here t enter text. Revisin Date Owner Ntes 8/13/2013 Click here t enter text. Plicy was reviewed, nt revised. 1/1/2012 Click here t enter text. Click here t enter text. 1/7/2010 Click here t enter text. Click here t enter text. 12/16/2008 Click here t enter text. Click here t enter text. Click here t enter a date. Click here t enter text. Click here t enter text. Restricted P a g e 11