5037 Employee Education About False Claims Recovery The purpose of this policy is to educate employees, contractors, and agents on

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1 5037 Employee Education About False Claims Recovery 5037 The purpose of this policy is to educate employees, contractors, and agents on the requirements of the Deficit Reduction Act (DRA) of 2005 which contains provisions to combat fraud and abuse in government health care programs. Under the Deficit Reduction Act, the District is required to provide employees, contractors and agents with information regarding federal and state false claims laws, administrative remedies under those laws, whistle-blower protections to employees who report incidents of false claims, and the District s programs for detecting and preventing fraud, waste and abuse in Medicaid programs. Federal False Claims Act The False Claims Act prohibits any person from knowingly presenting or causing to be presented, a false or fraudulent claim to the United States government for payment. The False Claims Act imposes civil liability on any person who: Knowingly presents a false or fraudulent claim for payment or approval. Knowingly makes or uses a false record or statement to get a false or fraudulent claim paid or approved. Conspires with another to get a false or fraudulent claim paid or allowed. Knowingly makes or uses a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property. Commits other fraudulent acts enumerated in the statute.

2 5037 Employee Education About False Claims Recovery Remedies - Federal The federal False Claims Act includes a qui tam, or whistleblower provision to report misconduct involving false claims. The qui tam provision allows any private person (Qui Tam Relater) with actual knowledge of allegedly false claims to file a lawsuit on behalf of the United States government. The federal government has the opportunity to intervene in the lawsuit and assume primary responsibility for prosecuting, dismissing or settling the action. If the federal government decides to intervene, the private person (Qui Tam Relater) who initiated the action may be eligible for a portion of the proceeds of the action or settlement of the claim. If the federal government does not proceed with the action, the Qui Tam Relater may continue with the lawsuit or settle the claim and he or she may receive a portion of the proceeds of the action or settlement. The Qui Tam Relater may also receive an amount for reasonable expenses, including reasonable attorney fees and costs incurred in connection with bringing the lawsuit. Violations of the federal false claims act can result in penalties of not less than $5, and not more than $11, per claim, plus three times the amount of damages that the government sustains. Medicaid False Claim Act The State of Michigan has a companion law known as the Medicaid False Claims Act. This act imposes prison terms of up to four (4) years and fines up to $50,000 for:

3 5037 Employee Education About False Claims Recovery Knowingly making a false statement or false representation of a material fact in any application for Medicaid benefits or for use in determining rights to a Medicaid benefit; Soliciting, offering or receiving kickbacks or bribes for referrals to another for Medicaid-funded services (fine up to $30,000); Entering an agreement with another to defraud Medicaid through a False Claim; or Making or presenting to the State of Michigan a False Claim for payment. Remedies - State Any person (Qui Tam Relater) may bring a civil action on behalf of the State of Michigan to recover losses that the State suffered from a person violating the Michigan Medicaid False Claims Act, and the Michigan Attorney General is to be notified and has an opportunity to appear and intervene in the action brought on behalf of the State of Michigan. If the Michigan Attorney General intervenes, in addition to the person (Qui Tam Relater) receiving his or her expenses, costs and reasonable attorney fees, the person may also receive a portion of the monetary proceeds resulting from the action or any settlement. If the Michigan Attorney General does not intervene, the Qui Tam Relater will receive a portion of the monetary proceeds.

4 5037 Employee Education About False Claims Recovery Whistleblower Protection Laws In addition to the District s Retaliation and Whistle-Blowing policy, both the federal and state laws protect individuals who investigate or report possible False Claims made by their employer against discharge or discrimination in employment because of such investigation. Employees who are discriminated against based on whistleblower activities may sue in court for damages. Under either the federal or state law, any employer who violates the whistleblower protection law is liable to the employee for (1) reinstatement of the employee s position without loss of seniority, (2) two times the amount of lost back pay, (3) interest and compensation for any special damages, and such other relief necessary to make the employee whole. Detection of Potential Fraud or Abuse The District combats Medicaid fraud, waste and abuse by investigating complaints, raising awareness of anti-fraud initiatives, and assuring compliance with state and federal laws. A quality assurance program is also used to detect and prevent potential fraud, waste or abuse that includes the following: Proactive review of claims and other types of data Recommending and implementing claims processing safeguards Conducting employee education on fraud and abuse prevention, recognition and reporting Encourage and promote the reporting of fraud or abuse by employees and contractors

5 5037 Employee Education About False Claims Recovery Notice The Superintendent shall provide information to all employees, contractors and agents about federal and state false claim laws and the district s quality assurance program to detect and prevent fraud, waste and abuse. The information from this policy shall be included in the employee handbook and distributed to all contractors and agents as required by the Deficit Reduction Act of policy. The Superintendent shall establish the necessary rules to implement this CROSS REF: LEGAL REF: Policy 5040 Retaliation and Whistle-Blowing Policy 5210 Employee Complaints 31 U.S.C et seq., False Claims Act M.C.L et seq., Medicaid False Claim Act

6 5037 Employee Education About False Claims Recovery R The District shall adhere to both state and federal laws governing fraud and abuse of claims payments from state and federal programs Federal False Claims Act The False Claims Act prohibits any person from knowingly presenting or causing to be presented, a false or fraudulent claim for payment or approval of government funds. Definitions Knowingly is defined to mean that a person (1) has actual knowledge of false information on the claim, (2) acts in deliberate ignorance of the truth or falsity of the information, (3) acts in reckless disregard of the truth or falsity of the information. Claim is defined to include any request or demand for money or property if the United States Government provides any portion of the money requested or demanded. Contractor or agent includes any contractor, subcontractor, agent, or other person which or who, on behalf the entity, furnishes, or otherwise authorizes the furnishing of, Medicaid health care items or services, or performs billing or coding functions. The federal false claims act does not require proof of a specific intent to defraud the government. A wide variety of conduct may lead to the submission of

7 5037 Employee Education About False Claims Recovery 5037 R - 2 fraudulent claims to the government including knowingly making false statements, falsifying records, double-billing for items or services, or submitting bills for services or items never furnished. Medicaid False Claim Act The Medicaid False Claim Act, in part, prohibits fraud in the obtaining of benefits or payments in connection with Medicaid and civil actions to recover money received by reason of fraudulent conduct. Definitions Claim means any attempt to cause the department of social services to pay out sums of money under the social welfare act, Act No. 280 of the Public Acts 1939, being sections to of the Michigan Compiled Laws. False means wholly or partially untrue or deceptive. Knowing and knowingly means that a person is in possession of facts under which he or she is aware or should be aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a Medicaid benefit. Knowing or knowing does not include conduct which is an error or mistake unless the person s course of conduct indicates a systematic or persistent tendency to cause inaccuracies to be present. Whistle-Blower Protection If any employee has knowledge or information that fraud or abuse activity as

8 5037 Employee Education About False Claims Recovery 5037 R 2 prohibited by federal or state law may have taken place, the employee must notify the Program Investigation Section of MDCH or the Department of Attorney General as follows: Michigan Department of Community Health Program Investigation Section Capitol Commons Center Building 400 South Pine, 6 th Floor Lansing, MI or Department of Attorney General Health Care Fraud Division P.O. Box Lansing, MI hour Hotline ABUSE/ Retaliation The District is committed to protecting employees from any form of reprisal, retaliation or discrimination if they, in good faith, report suspected illegal activity. An employee who believes he or she has suffered reprisal, retaliation or discrimination shall immediately report the incident(s) to the Director of Human Resources, Superintendent, or Board of Education as set forth in Policy Retaliation and Whistle-Blowing. The Board of Education considers retaliation to be a major offense that will result in disciplinary action against the offender including termination of employment.

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