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The Federal False Claims Act


This presentation is intended only for use by Tulane
University faculty, staff, and students. No copy or use
     of this presentation should occur without the
  permission of Tulane University. Tulane University
  retains all intellectual property interests associated
  with the presentation. Tulane University makes no
  claim, promise, or guarantee of any kind about the
accuracy, completeness, or adequacy of the content of
 the presentation and expressly disclaims liability for
         errors and omissions in such content.
The Federal False Claims
                … and how it affects You

(as impacted by the Deficit Reduction Act of 2005)
                                                     Updated 11/20/06
Purpose of Presentation
• To provide a general overview of the Federal
  False Claims Act
• To provide information to Tulane University
  Faculty and Staff Employees about their rights to
  protection under the Deficit Reduction Act of 2005
• To describe Tulane University’s policies and
  procedures for detecting and preventing fraud,
  waste, and abuse
As Medicare and Medicaid programs grow increasingly complex,
laws and regulations governing them become more complicated,
and require increasing organizational resources to ensure
compliance with their requirements.

•   This comes at a time when these programs become more strained by
    the health care needs of retiring baby boomers.
•   Nearly 36 million (86%) of today’s beneficiaries receive benefits paid
    as fee-for-service
•   Over 1 billion claims are paid each year to over 1 million providers
•   In 2004, more than $1 trillion went to Medicare, Medicaid, and Social
    Security programs

    These figures illustrate the government’s need for enhanced diligence
    in identifying and targeting fraudulent activities and recovering funds
    under the False Claims Act.
        The Medicaid Program
• originated in 1965 to ensure health care
  coverage and services for low-income and
  financially needy people
• is administered by the states, but is jointly
  funded by federal and state governments
• reimburses providers directly for services to
  its beneficiaries

  The state’s fraud control units investigate
  Medicaid fraud and abuse issues.
         The Medicare Program

• was established in 1965 by Title XVIII of the
  Social Security Act
• is a federally-funded health insurance program
  for citizens 65 or older, and persons with long-
  term disability or end-stage renal disease
• consists of four parts, for various health care
  items and services
Medicare Part A
• provides coverage for institutional providers
• generally pays under the Prospective Payment System
  (PPS), but may also reimburse institutional providers
  (including hospitals) for services they provide under Part B
  such as hospital outpatient services
• is financed through payroll taxes paid by employees and
  employers through FICA, by self-employed individual
  contributions, and the Railroad Retirement Board
• currently makes payment through contracted insurance
  companies (Fiscal Intermediaries), but will move to a new
  contracting model, Medicare Administrative Contractor
  (MAC) by 2011
Medicare Part B
• covers services provided by suppliers: physicians, nurse
  practitioners, home health care, ambulance, clinical and
  diagnostic labs, durable medical equipment
• bases payment on Medicare fee schedules developed by the
  Centers for Medicare and Medicaid Services
• carries a deductible and co-insurance paid by the beneficiary
• is financed through premiums paid by enrollees, general
  revenue, and interest earned on the Part B trust fund
• payments are generally made by contracted insurance
  companies (carriers), which will be replaced with the MAC
  contracting model
Medicare Part C
• was originally established in 1997 as “Medicare Choice” to
  offer managed care services to Medicare beneficiaries
• was amended in 2003 to become “Medicare Advantage”, and
  beneficiaries receive Part A and Part B services through
  enrollment in a managed care organization (HMOs, PPOs)
• may also include wellness and preventative health programs
• is financed by payments made by CMS to Medicare
  Advantage contractors that would have otherwise been paid
  under Parts A and B to providers and suppliers
Medicare Part D
• is a prescription drug benefit for Medicare beneficiaries, added
  as of January 1, 2006
• includes coverage for outpatient prescription drugs, prescribed
  biological products, insulin (including supplies), and vaccines
• is administered by private Prescription Drug Plans
• is financed by premiums paid by Medicare beneficiaries
• generally carries a deductible, co-insurance, and a monthly
Medicare and Medicaid programs are administered by
the Centers for Medicare and Medicaid Services (CMS),
which provides operational direction and policy
guidance to health care providers and suppliers. Find
them online at

   The Office of Inspector General (OIG), within the Department
   of Health and Human Services, is charged with oversight of
   the Medicare program, and investigates suspected fraud and
   abuse. It imposes civil monetary penalties and administrative
   actions, including program exclusion, against health care
   providers for fraud and abuse misconduct; and refers cases
   of fraud to the Department of Justice and other federal
   agencies for further criminal and/or civil action.
The Federal False Claims Act
       31 USC § 3279
The False Claims Act

• is a federal statute that covers fraud involving any
  federally funded contract or program (including
  Medicare and Medicaid)
• is commonly known as the “Lincoln Law” because it
  was first enacted to counter fraudulent activities
  involving military procurement during the Civil War
• establishes liability for any person who knowingly
  presents or causes to be presented a false or
  fraudulent claim to the U.S. government for payment
The term “knowingly” is defined to mean
that a person, with respect to information:

• has actual knowledge of falsity of information
  in the claim
• acts in deliberate ignorance of the truth or
  falsity of the information in a claim
• acts in reckless disregard of the truth or
  falsity of the information in a claim
The act does not require proof of specific
intent to defraud the government. Health
care providers can be prosecuted for a
wide variety of conduct that leads to the
submission of fraudulent claims to the
government, such as knowingly making
false statements, double-billing for items
or services, billing for services never
performed, falsifying records, or otherwise
causing a false claim to be submitted.
For purposes of the False Claims Act, a “claim”
includes any request or demand for money that is
submitted to the U.S. government or its contractors.
• Health care providers and suppliers who violate the False
  Claims Act can be subject to civil monetary penalties
  ranging from $5500 to $11000 for each false claim
• Providers and suppliers can also be required to pay 3
  times the amount of damages sustained by the
• If a provider or supplier is convicted of a False Claims Act
  violation, the OIG may seek to exclude him/her/it from
  participation in federal health care programs.
    Examples of Health Care Fraud:

•    Billing for services not rendered or goods not provided
•    Falsifying certificates of medical necessity and billing for services
     not medically necessary
•    Billing separately for services that should be a single service (un-
•    Falsifying treatment plans or medical records to maximize
•    Failing to report overpayments or credit balances
•    Duplicate billing
•    Unlawfully giving health care providers inducements in exchange
     for referrals
•    Physician billing for services provided by interns, residents, and
     fellows in a teaching hospital
Qui Tam “Whistleblower” Provisions

• Designed to encourage individuals to report
  misconduct involving False Claims Act
• Allows any person with actual knowledge of
  allegedly false claims to the government to file a
  lawsuit on behalf of the government
• Resulted in more than $1.4 billion in settlements
  and judgments in 2004-2005
• Recovered $1.1 billion through “whistleblower”
  Qui Tam Procedure: The whistleblower must file his/her lawsuit
  on behalf of the government in a federal district court, and kept “under
  seal” (confidential) during governmental review and investigation of the

• Rights of Parties:                    • Awards to Qui Tam
  If the government                       Whistleblowers:
  determines that the lawsuit               If the lawsuit is successful,
  has merit and decides to                  and certain legal
  intervene, the prosecution of             requirements are met, the
  the lawsuit will be directed              whistleblower may receive
  by the Department of                      an award ranging from 15
  Justice. If the government                to 30 percent of the amount
  decides not to intervene, the             recovered, and may be
  whistleblower may continue                entitled to reasonable
  with the lawsuit on his or her            expenses for bringing the
  own.                                      lawsuit.
• The False Claims Act entitles
  whistleblowers to additional relief,
  including employment reinstatement,
  back pay, and any other compensation
  arising from retaliatory conduct against
  the whistleblower for filing an action
  under the False Claims Act or
  committing other lawful acts in a False
  Claims Act action.
The Deficit Reduction Act of 2005 offered an
incentive to states to enact their own False
Claims Act requirements. At present, only a
handful of states has enacted their own.

         IS ONE OF THEM!
Maintains a “hotline” for reporting incidents involving
Billing Practices and Procedures and other fraudulent

          Call 504-988-5142 to report
          Tulane University
           Code of Conduct
  Compliance with Federal Law for Billing and
    Reimbursement of Health Care Services

This Code of Conduct evidences the commitment of Tulane
University (“Tulane”) and its employees, agents, and
contractors to full compliance with all laws and regulations
regarding billing for health care services. Tulane is
committed to ensuring that billing to and reimbursement
from the Medicare program, Medicaid program, and all other
federal health care programs is in compliance with the
regulations and guidance for billing such programs. It is
Tulane’s policy to educate our employees, agents and
contractors about the provisions of the federal and state
laws that prohibit the submission of false claims and false
statements as well as about the whistleblower protections
contained in these laws and the role that these laws play in
detecting and preventing fraud, waste, and abuse.
Tulane University Code of Conduct
• Applicability

• This Code of Conduct applies to all Tulane
  employees, agents and contractors, however,
  health care providers and individuals supporting
  health care providers are more likely to
  encounter the situations described in this Code
  of Conduct. Those employees, agents and
  contractors who provide health care services,
  are members of Tulane University Medical
  Group, or who provide administrative,
  managerial, financial or other support for
  Tulane’s health care functions should ensure
  that they fully understand this Code of Conduct.
Tulane University Code of Conduct

•   State and Federal Laws

•   Both federal and Louisiana law prohibit Tulane from knowingly
    presenting a false or fraudulent claim to Medicare, Medicaid, or other
    federal health care programs. Federal law defines a “false claim” as
    knowingly presenting false or fraudulent claims for payment or making
    or using a false record or statement to receive payment for a claim.
    Louisiana law defines a “false or fraudulent claim” as a claim that a
    health care provider (or his agent) submits knowing the claim to be
    false, fictitious, untrue, or misleading in regard to any material
    information. Examples of false claims could include billing for services
    not rendered or goods not provided, falsifying certificates of medical
    necessity, falsifying medical records, unauthorized use or unauthorized
    assignment of provider billing numbers, and failing to report
    overpayments or credit balances. All of the data elements that must be
    included in submissions for reimbursement from Medicare, Medicaid
    and other federal health care programs must be accurate. Violations of
    these federal and state laws can subject Tulane to significant fines and
Tulane University Code of Conduct
•   Protection of Whistleblowers

•   The federal and state laws contain certain protections for
    “whistleblowers” who alert the appropriate governmental
    authority of a violation of the false claims acts. Under these
    laws, any person with actual knowledge of an allegedly false
    claim, including employees, agents and contractors, may,
    under certain conditions, become a whistleblower under
    these statutes and is free to notify the appropriate state or
    federal governmental authorities if he/she does not believe
    that Tulane is responding appropriately when notified about
    potential violations. Employers are prohibited from taking
    adverse or retaliatory action against a whistleblower who in
    good faith notifies the appropriate governmental authority of
    an alleged violation. Whistleblowers may also be entitled to
    relief, including employment reinstatement, back pay, and
    other compensation arising from retaliatory conduct against
    the whistleblower.
Tulane University Code of Conduct
•   Tulane’s Policies and Procedures

•   Tulane University is committed to promoting ethical practices and to
    preventing and detecting fraud, waste, and abuse. Tulane
    systematically reviews its compliance with the rules and regulations of
    Medicare, Medicaid, and other federal payors. Tulane also has in place
    compliance procedures for audits, personnel training and continuing
    education. Tulane’s compliance personnel regularly apprise
    themselves and the organization of current state and federal statutory
    and regulatory developments to ensure that Tulane is compliant with the
    rules governing federal and state health care programs claims
•   In addition, Tulane relies on its employees to notify it of any potential
    inaccurate billing so that we are not accused of violating the laws that
    prohibit the submission of false claims to the government. Tulane
    makes it a part of the duty of all employees to assist it this commitment
    to accurate billing by reporting any potential improprieties without fear of
    retaliation. Tulane employees may report potential billing violations
    directly to their supervisor or to the “hotline” maintained by Tulane for
    this purpose, which can be reached at 504-862-8698. Alternatively,
    information on the hotline and reporting any potential improprieties can
    be found at
Download the test at
answer the questions, and fax it to
the University Privacy and
Contracting Office, 504-988-7777.

Completion of this material is
MANDATORY, and carries one (1)
Compliance Training Unit credit.

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