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Three things medical practices should know about false claims

Billing Medicare and other insurance providers is not always straightforward. Some may struggle to keep up to date with the ever-changing language that guides billing practices while others are trying to run a medical practice with reduced staff. In any of these scenarios, mistakes can happen. In some cases, using the wrong code or making a mistake can result in serious allegations of wrongdoing. This is because in the eyes of the government, this mistake is potentially a false claim — an attempt to cheat taxpayers out of their money.

As a result, a failure to properly bill Medicare or Medicaid can lead to allegations of a False Claims Act (FCA) violation. Because of the severity of these allegations it is important for those who run medical practices to understand the following.

#1: What does the government need to build an FCA case?

An FCA violation can result in civil liability for a medical practice or individual who knowingly submits a false claim to the federal government. The law requires actual knowledge of the information or a deliberate disregard for the truth. It does not require an intent to violate the law, just knowledge of the claim. Knowledge of false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information. This means building a defense to the allegations would require more than simply stating that the medical practice was unaware of the mistake.

The United States Centers for Medicare and Medicaid Services (CMS) provides an example. If a physician submits a claim to Medicare for medical services that were either not provided or charges a higher level of services than provided, that physician may be in violation of the FCA. It generally does not matter if the physician knew the billing was a violation of the law or not, the physician only needs to know that they filed the claim.

#2: How often does the government pursue these cases?

The feds take allegations of a violation seriously and will aggressively investigate allegations of wrongdoing — and they are often successful. The Department of Justice (DOJ) recently reported collecting over $2 billion in settlements and judgements involving false and fraudulent claims in the fiscal year ending on September 30, 2020.

#3: How serious are the penalties?

The government can recover up to three times the amount of actual damages in addition to financial penalties for filing the claim. Additional criminal penalties including more fines and potential imprisonment can also apply.