The False Claims Act (FCA) is an important and complicated regulation. It impacts anyone that bills Medicare and Medicaid. As such, diagnostic labs that bill these entities must heed the regulations set forth by the FCA. A failure to do so can result in severe financial penalties and the inability to bill Medicare and Medicaid in the future.
Two key things that business leaders within this market should know are the key provisions of this law as well as best practices that can help to better ensure compliance.
Key provisions of the False Claims Act
Lawmakers designed the FCA to combat fraud and prevent losses in government spending. As such, the law has teeth — the penalties are harsh as noted above. This is meant to deter violations. Leaders within this industry are wise to keep the following provisions in mind when reviewing lab practices:
- Liability for knowingly submitting false claims to the government. It is important to clarify that the government need not establish actual knowledge. Reckless disregard for the rules will likely suffice.
- The law applies to individual instances. Part of the reason the penalties are so severe is the fact that it applies to individual instances. Each instance can count as a claim that may warrant allegations of a violation. This can quickly add up over a relatively short period of time. In a recent example, the court entered a judgement against a lab for over $26 million due to FCA violations.
- FCA does not stand alone. Those who face allegations of a violation are wise to prepare for additional charges. The prosecution may pair these charges with additional charges, such as a violation of the Stark law or Anti-Kickback Statute.
The importance of accurate billing and transparent operations within diagnostic labs cannot be overstated. It is important to note that depending on the details of the allegations, criminal penalties can also apply.
Best practices for FCA compliance
Diagnostic labs are wise to implement robust compliance programs and stay vigilant in their billing practices to better ensure compliance with the FCA and other regulations. Effective strategies to work towards compliance include:
- Audits: Conducting regular internal audits of billing practices can help to better ensure accuracy.
- Training: Make sure staff is trained on FCA requirements and updates.
Compliance with the False Claims Act is essential for diagnostic labs to avoid legal pitfalls and maintain their reputations. By understanding the key aspects of the FCA and implementing best practices for compliance, labs can operate confidently and ethically.
Attorney John Rivas is responsible for this communication.