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False Claims Act (FCA)
False Claims Act (FCA)
False Claims Act (FCA)
The False Claims Act outlines provisions and penalties intended to prevent the Government
from being charged inappropriately for health care goods and services. This act makes it illegal
for individuals or entities to submit false or fraudulent claims to Medicare or Medicaid programs
or cause a false or fraudulent claim to be submitted. There can be financial and criminal
penalties for being involved in improper claim submission.
It is important to get to know common coding practices and individual payer policies to ensure
you reduce the chances of committing fraud, waste, or abuse. ASHA can provide some general
guidance on payment considerations (See Billing and Reimbursement); however, we are not
directly involved with any payers so it is always best to check directly with the source. Medicare
offers a host of resources on billing and payment on their website. Clinicians can also reach out
directly to their Medicare Administrative Contractor (MAC) for additional information and Local
Coverage Determinations (LCD). While the federal government provides some funding and
basic guidelines, Medicaid programs are managed independently in each state and maintain
their own policies, websites, and resources. There is no central database of Medicaid websites
but you can search for your state’s Medicaid program name in the Healthcare Medicaid Program
Directory and do a web search for your state program’s website. It is important to follow the
guidelines of your state Medicaid program as policies vary between states and individual
programs within the state (school, outpatient, early intervention, etc.).
Fraud, waste, and abuse all violate the FCA but can have different levels of penalties. Penalties
can include fines, exclusion from government insurance programs, and criminal penalties. Fines
can be as high as three times the mis-billed amount plus up to $11,000 per mis-billed service or
device. Broadly defined fraud is intentional deception to seek inappropriate reimbursement.
Waste includes inefficiencies like ordering or performing unnecessary tests which result in
overpayment and exposing beneficiaries to unnecessary services. Abuse can be defined as
bending the rules. Determining between fraud and abuse depends on the facts of the case
including the circumstances, intent, and knowledge of the parties involved. Learn more on the
CMS website: Medicare Fraud & Abuse: Prevent, Detect, Report [PDF].
- Altering diagnosis coding to reflect a more severe illness than actually existed.
- Misusing codes on a claim, such as upcoding or unbundling codes. Upcoding is when an
inaccurate procedure code is billed with the purpose of receiving a higher rate of
reimbursement. Unbundling is billing for aspects of a service already included in the
procedure code.
- Billing services that would not be considered medically necessary.
- Billing services that were not truly provided to the patient.
- Billing services provided by an improperly supervised or unqualified individual; payers
determine qualifications and supervision requirements for services billed to their
program.
- Billing services performed by a provider that are excluded from participation in the
Federal healthcare programs.
If you are concerned that you have been involved in fraud waste or abuse it is best to work with
a lawyer specializing in health law who can analyze the facts of your situation and help
determine your level of risk. ASHA cannot provide legal advice or help assess risk, but we can
provide general information on healthcare policies.
Instead of altering coding inappropriately to secure coverage, consider other ways to expand
coverage. If the plan is through an employer, they probably manage the benefits (coverage
limitations) in each of the company plans. Patients can work with their employers to determine
whether another plan they made available has the coverage the family needs. They can also
talk with their employers or insurance company about expanding or Adding Speech and
Language Benefits to the plan.
Given the nature and complexity of a patient's diagnosis, they may also qualify for state
Medicaid benefits. This can serve as additional coverage for services beyond what a private
insurance plan might offer. See more on Medicaid Eligibility, including application and contact
information.
Individuals are also not required to enroll with their employer’s insurance options if they are not
adequate for the family's needs. The Affordable Care Act’s healthcare marketplace is available
to all citizens. Next open enrollment season, individuals can shop around their state's healthcare
marketplace for a plan that meets their needs. The premium may be different so be sure to
carefully review plan information before selecting one.
If you are aware of inappropriate billing, you have the option to report it to the Office of the
Inspector General (OIG). OIG has a helpful video explaining the process of Reporting Fraud to
OIG. Along with AOTA and APTA, ASHA has created a resource on the basics of Compliance
Reporting [PDF] that can also provide some guidance. Individuals who report fraud to OIG are
known as whistleblowers and receive some protection under the FCA. The FCA protects
whistleblowers from retaliation and awards them a portion of the monies recuperated by the
government in a false claims case. They do not receive total anonymity but there are specific
consequences if an employer retaliates against a whistleblower. If you are considering reporting,
consult with a healthcare lawyer barred in your state for guidance and review of your case. For
more on whistleblower protections see OIG Whistleblower Protection Coordinator.
If you discover that you have been mis-billing a government insurance program (intentionally or
unintentionally) you have the option to self-report. Self-reporting will still require returning
improper payments to the government program, but it greatly reduces your risk of additional
penalties (such as fines or criminal penalties). OIG has a helpful video explaining the Updated
Self-Disclosure Protocol and a document explaining self-reporting (self-disclosure) OIG
Self-Disclosure Program [PDF]. If you are considering self-reporting consult with a lawyer barred
in your state for guidance on your case and level of risk. ASHA cannot provide legal guidance,
only general information on policies and considerations.
States have the option of developing their own False Claims Act regulations that apply locally.
According to section 1909 of the Social Security Act if a state’s FCA regulation meets certain
criteria and is approved by the federal OIG then they are subject to a 10% higher share of the
recovered funds. To qualify for the financial incentive, a State's false claims act must:
- establish liability to the State for false or fraudulent claims, as described in the Federal
False Claims Act (FCA), with respect to Medicaid spending;
- contain provisions that are at least as effective in rewarding and facilitating qui tam
actions for false or fraudulent claims as those described in the FCA;
- contain a requirement for filing an action under seal for 60 days with review by the State
Attorney General; and
- contain a civil penalty that is not less than the amount of the civil penalty authorized
under the FCA.
As of 2023, the following States’ FCA regulations have been approved: California, Colorado,
Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Minnesota,
Montana, Nevada, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas,
Vermont, Virginia, Washington. See more.
State false claims regulations can be broader than the FCA to include more plans or more
clinical situations. To learn more about your state’s regulations around false claims, contact your
state licensing board or state association. If you are enrolled with private insurance plans, it is
also important to review your credentialing contract with the insurer. While private insurance
plans do not fall under the FCA, most have their own rules and penalties for the submission of
false claims. These are often outlined in your credentialing contract and/or their internal policies.
Review your contract or contact the payer directly for information on false claims, contractual
regulations, and penalties.