MEMORANDUM To: Public Health Solutions staff providing Medicaid reimbursable services From: Jane Levine, Vice-President/General Counsel Re: Preventing Medicaid Fraud Summary of Public Health Solutions Policy Date: August 27, 2013 Federal and State Laws Concerning Medicaid Fraud Federal and state laws require organizations which provide services paid for by Medicaid to establish a compliance program and to educate staff members about how to identify and prevent Medicaid fraud. This compliance program is a condition of receiving Medicaid payments. Because certain PHS programs are reimbursed for their services either directly or indirectly by Medicaid, PHS has established a compliance policy and appointed a compliance officer. This memorandum explains how Public Health Solutions compliance policy works to prevent Medicaid fraud. The relevant laws are summarized in the attached Exhibit for staff to review. Public Health Solutions Compliance Program 1. Public Health Solutions trains new staff and provides all staff members with written materials explaining how they can help prevent and detect Medicaid fraud, waste and abuse. This training should be repeated annually and should be supplemented with issue-based training, where appropriate. The training also helps Public Health Solutions ensure that fraudulent claims are not knowingly sent to health insurance programs. 2. Public Health Solutions responds to questions and reports of fraud, waste, and abuse quickly. 3. Public Health Solutions informs its health care contractors about this anti-fraud policy. 4. Public Health Solutions Director of Internal Audit, Robert Dalton, is the organization s Medicaid Compliance Officer. Any complaints or concerns about Medicaid Fraud should be reported directly to him, and may be reported to him anonymously. The Director of Internal Audit tracks complaints or concerns brought to his attention, and will provide feedback to identified employees raising questions or concerns. The Medicaid Compliance Officer attends regular meetings with and reports directly to Public Health Solutions Chief Operating Officer, Steven Newman, and to a member of Public Health Solutions Board Audit Committee, William Keller. He also will provide regular updates to the COO and the Board Audit Committee concerning Medicaid fraud, waste or abuse. Robert Dalton, Director of Internal Audit/Medicaid Compliance Officer 40 Worth Street, 5 th Floor, New York, NY 10013 Phone: 646-619-6470 Email: rdalton@healthsolutions.org Rev 07/28/2015 (addresses corrected)
5. The Medicaid Compliance Officer: a. Reviews Public Health Solutions fraud prevention policies and procedures to make sure they are strong enough to detect payment problems and fraud, and fix any problems he finds, b. Insures that Public Health Solutions reviews and audits its records for compliance with Medicaid billing rules, c. Promptly investigates and responds to complaints of suspected waste, fraud and/or abuse involving Medicaid, and d. Reports problems to government agencies when necessary and makes sure any overpayments are refunded. 6. Public Health Solutions employees must let the Compliance Officer know about suspected Medicaid fraud, waste, or abuse. If an employee does not feel comfortable informing the Compliance officer, even anonymously, s/he may report fraud, waste or abuse to William Keller, a member of Public Health Solutions Audit Committee. Employees do not have to identify themselves when making complaints. William Keller, Vice President for Finance & Administration Vice President for Finance & Administration Queens College 65-30 Kissena Blvd. Flushing, NY 11367 Phone: 718-997-5577 Email: wmkell@hotmail.com Public Health Solutions does not take any actions against employees who, in good faith, report fraud, waste, and/or abuse. Public Health Solutions Employee Handbook explains the policy that protects whistleblowers. (Employee Handbook, section 3.6). 7. Staff members who commit Medicaid fraud, waste or abuse will be subject to appropriate disciplinary action, including termination. 8. A summary of federal and state anti-fraud laws will be updated annually as necessary and made available to staff members (see attached Exhibit). 9. MIC-Women s Health Services, Nurse Family Partnership and Early Intervention Service Coordination management employees are responsible for explaining to staff members the importance of compliance with Medicaid rules, for developing procedures for their areas to help prevent fraud, waste and abuse, and for responding to questions from the Compliance Officer or from Board Member William Keller about fraud, waste, or abuse complaints. Revised 07/28/2015 (addresses corrected) - 2 -
EXHIBIT FEDERAL AND STATE LAWS CONCERNING FALSE CLAIMS AND WHISTLEBLOWER PROTECTIONS In this section, Public Health Solutions is providing you with brief descriptions of State and federal anti-fraud laws. Employees are to become familiar with these laws, and should speak with the Compliance Officer if they have questions about how these laws apply to their job. I. FEDERAL LAWS The federal False Claims Act, false claims sections of the Social Security Act, and the Program Fraud Civil Remedies Act (PFCRA) provide for money damages and criminal penalties where false claims have been submitted to federal agencies and programs. Because the federal government funds part of New York s Medicaid program, these laws cover claims or bills to Medicaid in New York, including claims or bills for Medicaid-funded services or goods provided by Public Health Solutions. A. The Federal False Claims & Social Security Acts The Federal False Claims Act prohibits an organization like Public Health Solutions from: 1. Knowingly making a false claim for payment to the federal government; 2. Knowingly making a false record or statement to get a false claim paid or approved by the federal government; and 3. Conspiring to defraud the government by getting a false claim allowed or paid. Under the Act, knowing and knowingly mean (1) actual knowledge of the information; (2) acting when you know you really do not know whether information is true or false; or (3) acting recklessly and ignoring the truth or falsity of the information. A person or entity found guilty of violating the False Claims Act must repay the falsely obtained money and faces civil penalties of up to $11,000, plus up to three times the amount of actual damages sustained by the government. In addition to liability for damages and civil penalties under the False Claims Act, the Social Security Act provides similar penalties and also provides for the possible exclusion of violators from Federal health care programs, such as Medicaid. The False Claims Act s Whistleblower Protections Private persons can go to court on behalf of the US government for violations of the Federal False Claims Act and are entitled to receive some of the money obtained through settlements, penalties and/or fines collected. Persons bringing these claims (whistleblowers) are given legal protection. Any whistleblower who is let go, demoted, suspended, threatened, harassed, or otherwise discriminated against by his or her employer because s/he reported violations of the Federal False Claims Act will be entitled to be put back in her or his job with the same seniority status, double back pay, interest, any special damages resulting from the discriminatory treatment, and attorneys fees and costs. Revised 07/28/2015 (addresses corrected) - 3 -
A whistleblower who files a frivolous lawsuit can be forced to reimburse the defendant for all the costs of defending the lawsuit, including attorneys fees. B. The Program Fraud Civil Remedies Act (PFCRA) The PFCRA is similar to the False Claims Act. It makes it illegal for a person or entity to make a claim for property, services, or money to an authority (such as the Department of Health and Human Services, which oversees Medicaid) when the person or entity knows or has reason to know that the claim: (i) is false, fictitious or fraudulent; or (ii) includes or is supported by a written false statement; or (iii) includes or is supported by any written statement that leaves out an important fact, is false because of what is left out and is a statement in which the person or entity has a duty to include the important fact; or (iv) is for the provision of items or services which the person or entity has not provided as claimed. In addition, it is illegal to make a written statement (examples are documents, records, or accounting or bookkeeping entries made with respect to a claim or to obtain the approval or payment of a claim) if the person or entity knows or has reason to know such statement: (i) states an important fact which is false or (ii) leaves out an important fact making the statement false because of the omission. PFCRA defines knows or has reason to know similar to the way it is defined in the False Claims Act. The PFCRA provides civil fines for each false claim paid by the government, and, in certain cases, an assessment of twice the amount of each claim. II. NEW YORK STATE LAWS A. Social Services Law Section 145-b (False Statements; Actions for Treble Damages) Under New York State Social Services Law Section 145-b, it is unlawful to make a false statement or representation or deliberately conceal an important fact on purpose to attempt to or to obtain payments for services or supplies paid for by Medicaid. A violation of this law can subject a person or entity, such as Public Health Solutions, to civil damages totaling three times the actual damages or $5,000, whichever is greater. Additional penalties can be imposed if the person or entity knew, or had reason to know that: The payment involved providing or ordering care, services, or supplies that were medically improper or unnecessary; The care, services or supplies were not provided as claimed; The person who ordered or prescribed care, services or supplies which were medically improper or unnecessary was suspended or excluded from Medicaid at the time the care, services or supplies were furnished; or The services or supplies for which payment was received were not, in fact, provided. B. Social Services Law Section 363-D (Provider Compliance Programs) The Social Services Law requires effective compliance programs to be adopted by certain organizations in order to receive Medicaid reimbursements for services provided. The compliance program must include the following eight elements: 1) written policies and procedures; 2) a designated employee vested with day-to-day operation of the compliance program; 3) accessible compliance training and education for all employees and staff members; 4) accessible and confidential lines of communication between the staff and the responsible compliance officer; 5) disciplinary policies to encourage good faith participation; 6) a system of routine identification of compliance risk areas; 7) a system for responding to compliance issues as they arise; 8) a Revised 07/28/2015 (addresses corrected) - 4 -
policy of non-intimidation and non-retaliation for good faith participation of employees in the compliance program (whistleblower protection). C. Social Services Law Section 366-b (Penalties for Fraudulent Practices) New York State also provides criminal penalties where, with intent to defraud, a person presents for payment a false or fraudulent claim for furnishing services or merchandise, knowingly submits false information for the purpose of obtaining greater compensation than otherwise permitted, or knowingly submits false information to obtain authorization for furnishing Medicaid services or merchandise to which he is not entitled. Violation of Social Services Law 366-b is a Class A misdemeanor, unless the criminal act otherwise violates the Penal Law, in which case those penalties will apply. D. Penal Law Section 177 (Health Care Fraud) Penal Law Section 177 makes it a crime to commit health care fraud. Health care fraud is when, with intent to defraud a private or public health plan (including Medicaid or an HMO), a person or entity knowingly and willfully provides important false information or leaves out important information for the purpose of getting paid for health care items or services that the person or entity is not entitled to receive. The severity of the crime is based on the amount of payment wrongfully received from a single health plan in a one-year period. Crimes range from class A misdemeanors for the receipt of illegal payments under $3,000 to class B felonies for the receipt of payments exceeding $1,000,000. It is a defense to a prosecution under Penal Law Section 177 that the defendant was a clerk, bookkeeper or other employee, other than an employee charged with the active management and control, in an executive capacity, of the affairs of the corporation, who, without personal benefit, merely executed the orders of his or her employer or of a superior employee generally authorized to direct his or her activities. E. Labor Law Article 20-C, Retaliatory Action by Employers - Whistleblower protections (Labor Law Sections 740-41) Labor Law Section 740 makes it illegal for employers to take retaliatory actions (i.e., discharging, suspending, demoting or taking other adverse employment actions) against an employee who discloses (or threatens to disclose) to a supervisor or to a public body an employer s activity, policy or practice that is in violation of law, rule or regulation that creates and presents a substantial and specific danger to the public health or which constitutes the crime of health care fraud. The law also: Protects employees who provide information or testify before any public body conducting an investigation on any such violation from retaliation by such employer, as well as employees who object to or refuse to participate in any such activity, policy or practice in violation of a law or regulation. Allows employees who believe they have been retaliated against to go to court to stop the retaliation; for reinstatement to the same or equivalent job held before the retaliatory action; for reinstatement of benefits and seniority; for lost wages and benefits; and the payment of reasonable costs and attorneys fees. Provides protections concerning disclosures to public bodies. These protections are only available if the employee has brought the activity, policy, or practice in violation of law, rule or regulation to the attention of a supervisor and has given the employer a reasonable opportunity to correct the activity, policy or practice. Revised 07/28/2015 (addresses corrected) - 5 -
Labor Law Section 741 prohibits retaliation against employees who make reports about substandard patient care. Labor Law Section 741 provides that: Employers may not retaliate against employees who make reports in good faith bringing concerns about the quality of patient health care provided by their employers to the attention of their supervisors or public bodies. Employers may not retaliate against employees who object to, or who refuse to participate in any activity, policy or practice that employees, in good faith, reasonably believe constitute improper quality of patient care. However, retaliation by an employer where an employee has not provided the employer an opportunity to impose corrective action is not in violation of this section unless an imminent threat to public health or safety or to the health of a specific patient exists and an employee reasonably believes in good faith that reporting to a supervisor would not result in corrective action. F. State Finance Law Article 13 (New York State False Claims Act) The New York False Claims Act empowers persons with evidence that a fraud has been committed against the State, or any City within the State, to file a complaint to recover triple the amount that has been defrauded from the Government, and to receive a monetary reward for doing so. Activities which constitute a violation under the State False Claims Act are: a) knowingly presenting, or causing to be presented, a false claim for payment or approval by an agent or employee of the Government; b) knowingly making, using, or causing to be made or used, a false record or statement to get a false claim paid or approved by the Government; c) conspiring with others to get a false or fraudulent claim allowed or paid by the Government; d) having possession, custody or control of property or money used, or to be used, directly or indirectly, by the Government and, intending to defraud the Government or willfully conceal the property or money, delivers or causes to be delivered, less property or money than the amount for which the person receives a certificate or receipt; e) while being authorized to make or deliver a document certifying receipt of property used, or to be used, directly or indirectly by the Government, and intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true; f) knowingly buying, or receiving as a pledge of an obligation or debt, public property from an officer or employee of the Government, knowing that such officer or employee lawfully may not sell or pledge the property; g) knowingly making, using, or causing to be made or used, a false record or statement to conceal, avoid or decrease, directly or indirectly, an obligation to pay or transmit money or property to the Government. Employees discharged, demoted, suspended, threatened, harassed or otherwise discriminated against in the terms and conditions of employment because of lawful acts done by them on behalf of the employer or others in furtherance of an action brought under the State False Claims Act, including the investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under the Act, are entitled to all relief necessary to make them whole. That relief includes an injunction, reinstatement with full fringe benefits and seniority rights; payment of two times back pay, plus interest; and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees. Revised 07/28/2015 (addresses corrected) - 6 -