TITLE: NUMBER: ISSUER: Federal False Claims Act Policy DATE: August 18, 2008 Judy Elliott, Chief Academic Officer Office of the Chief Academic Officer ROUTING All Employees All Locations Non-public Service Contractors POLICY: MAJOR CHANGES: GUIDELINES: The purpose of this Bulletin is to make employees and contractors aware of the requirements set forth by the Federal False Claim Act and relevant state laws regarding false claims and statements. All employees and contractors must be provided with annual training regarding the provisions of this act. None The following guidelines apply: I. INTRODUCTION In 1989, Congress enabled school districts to claim federal funds for health related services they provide to students enrolled in Medicaid. Districts can seek reimbursement from Medicaid for these services as long as the district is a Medicaid provider and meets requirements regarding licensure, certification, and other federal mandates for the Medicaid program. The Los Angeles Unified School District participates in two Medicaid (known as Medi-Cal in California) programs: the Medi-Cal Administrative Activities (MAA) and the LEA Billing Option. The District recovers costs from the federal government to offset the expenses of existing programs and to fund supplemental health and human services. The average revenue generated by these two programs is in excess of $20 million. The Federal Deficit Reduction Act 2005: Employee Education on False Claims Recovery (Sec. 6032) requires any agency receiving $5 million or more in federal reimbursement to provide training to employees and contractors participating in activities regarding the Federal False Claim Act. The False Claims Act (31 U.S.C. Sec. 3729) is a federal law that prohibits an individual or organization which receives money from the federal government from 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 federal government. The potential penalties for violating the False Claims Act include treble damages Office of the Chief Academic Officer Page 1 of 6 August 18, 2008
(damages equal to three times the amount of the false claims), civil penalties of up to $11,000 per claim, and exclusion from federal health care programs. In addition, the federal government may impose administrative sanctions of up to $5,550 plus twice the amount of the false claim under the Federal Program Civil Remedies Act of 1986 (31 U.S.C. Sec. 3801). The State of California has a similar law (California Government Code Sec. 12650). An important component of this law is the concept of knowingly. This is interpreted as meaning a person submits information that may be used in a Medi-Cal claim knowing that the information is false or fraudulent, in deliberate ignorance of the truth or accuracy of the information, and/or with reckless disregard for the truth or inaccuracy of the information. In the Los Angeles Unified School District the documentation which is subject to False Claim Act requirements is generated in the Welligent system in two ways: 1. Time Surveys completed for the Medi-Cal Administrative Activities (MAA), and 2. Service tracking documentation for certain medically necessary services provided to students with disabilities who are Medi-Cal eligible. The False Claims Act is enforced by the Attorney General s office. A private person who has non-public information about wrongdoing may file a false claim lawsuit on behalf of the government. This person is called a whistleblower or Qui Tam Relator. Employees or contractors who report suspected fraud and abuse or who file whistleblower lawsuits are protected from retaliation by federal law. Any employee or contractor who is discharged or discriminated against based upon the filing of a whistleblower lawsuit is entitled to all relief necessary to make the employee whole. The LAUSD Office of the Inspector General operates a Fraud Hotline. District employees can use this Hotline to report allegations of fraud, waste and abuse occurring within the District. It is the policy of the District to encourage its employees to disclose improper governmental activities, based in part of California Education Code Section 44112(c) and to protect those employees who raise allegations of improper governmental activities from interference, reprisal, or retaliation pursuant to the District s Whistleblower Protection Policy. The Inspector General s Fraud Hotline number is (213) 241-7778, or toll free at (866) 528-7364. II. POLICY As a condition of the commitment to excellence, the LAUSD Employee Code of Ethics requires that all employees, Provide honest, accurate, and timely information. This policy is inclusive of the documentation required for Medi-Cal Office of the Chief Academic Officer Page 2 of 6 August 18, 2008
services (MAA and LEA Billing Option) via the Welligent information system. Compliance with the False Claim Act is required for employees or contractors who complete Time Surveys for the Medi-Cal Administrative Activities (MAA) and/or who complete service documentation for certain medically necessary services provided to students with disabilities who are Medi-Cal eligible. Employees who identify errors on their own records in Welligent are required to open unlocked records and make the necessary corrections immediately upon identifying the error. If a record is locked, the employee is required to contact the LAUSD Medi-Cal Reimbursement Program office immediately. Call (213) 241-3998 for errors on MAA documentation and (213) 241-0558 for errors on Service Tracking documentation for students with disabilities who are Medi-Cal eligible. III. MANDATORY FALSE CLAIMS ACT TRAINING District employees and contractors who participate in the Medi-Cal Administrative Activities (MAA) Program and/or the LEA Billing Option Program are required to complete False Claims Act training on an annual basis. False Claim Act training will be conducted through the LAUSD Learning Zone. This training will be available beginning August 19, 2008. Employees will receive an e-mail message notifying them of their responsibility to complete this training. This self-directed 15-20 minute on-line training must be completed no later than September 12, 2008. Employees hired after this time period must complete the False Claim Act training before they begin entering information in the Welligent system. IV. RESPONSIBILITIES OF ADMINISTRATORS AND SUPERVISORS All administrators and supervisors of employees who participate in Medi-Cal Programs (the MAA Program and/or the LEA Billing Option Program) are required to provide to employees the District policy bulletin on the False Claims Act and ensure that all employees complete the False Claim Act on-line training on an annual basis. New employees hired after September 1, 2008 must complete this on-line training and receive the Federal False Claims Act bulletin before they begin documenting any Medi-Cal services in Welligent. Administrators and supervisors must notify the Medi-Cal office (213-241-3851) when new employees are hired in order for them to be added to the Learning Zone roster for the on-line course. Office of the Chief Academic Officer Page 3 of 6 August 18, 2008
AUTHORITY: False Claims Act (31 U.S.C. Sec. 3729) Social Security Act (42 U.S.C. Sec 1396a(a)(68),: Sec 1902(a) Welfare & Institutions (W&I) Code Section 14115.75 RELATED RESOURCES: Refer to the link below for more information about the Federal Deficit Reduction Act 2005: Employee Education on False Claims Recovery. http://uscode.house.gov/uscodecgi/fastweb.exe?getdoc+uscview+t29t32+1974+0++%28%29%20%20a Attachment A Attachment B Directions to access the LAUSD Learning Zone Course: Federal False Claim Act California False Claims Act ASSISTANCE: For assistance or further information, please contact Sherry L. Purcell, Coordinator, Medi-Cal Reimbursement Programs, at (213) 241-0551. Office of the Chief Academic Officer Page 4 of 6 August 18, 2008
STUDENT HEALTH AND HUMAN SERVICES ATTACHMENT A LAUSD Learning Zone Course: Federal False Claims Act (1) Access to the Course Employees who are required to take this course will receive an e-mail with the subject line LZ- Class Enrollment: False Claim Act stating that they have been enrolled in the online class. Log into the Learning Zone at https://lz.lausd.net Click on the My Classes tab. The web based learning course will display a blue globe and a link. Click on the blue globe with the link to access the course. (2) Directions for Course Completion Employees can complete the course at their own pace. The estimated time for completion is 15-20 minutes. Employees have the ability to start or stop the online training at various points and continue the program at their convenience. The program will pick up at the beginning of the section where the employee left off. There is a 4 question assessment at the end of the training. The training may be repeated as many times as necessary in order to achieve a passing score. If technical assistance is required to access the training or if technical problems are encountered during the training, the employee should contact the LAUSD Service Desk at (213) 241-5200. Office of the Chief Academic Officer Page 5 of 6 August 18, 2008
STUDENT HEALTH AND HUMAN SERVICES ATTACHMENT B California False Claims Act Cal Wel & Inst Code 14115.75 (2007) 14115.75. Preconditions requisites for payments; Compliance with the federal False Claims Act employee training and policy requirements (a) As a condition of payment for goods, supplies, and merchandise provided to Medi-Cal beneficiaries by a provider that receives or makes annual payments of at least five million dollars ($5,000,000) under the Medi-Cal program, the provider shall comply with the federal False Claims Act employee training and policy requirements contained in Section 1902(a) of the federal Social Security Act (42 U.S.C. Sec. 1396a(a)(68)), and with any requirements that the United States Secretary of Health and Human Services may specify. The calculation of the five million dollar ($5,000,000) threshold shall be based on federal law and regulations and guidance from the United States Secretary of Health and Human Services. (b) For purposes of this section, "provider" has the same meaning as that term is defined in Section 14043.1, and also includes any Medi-Cal managed care plan authorized under this chapter, Chapter 8 (commencing with Section 14200) or Chapter 8.75 (commencing with Section 14590). Office of the Chief Academic Officer Page 6 of 6 August 18, 2008