Ensure Compliance, Minimize Exposure to False Claims Risks

Brian Williams, MHA, MBA
Minimize exposure to risks of filing false claims

The U.S. government collected $2.2B in settlements and judgments from healthcare organizations accused of filing false claims in fiscal 2022. Knowingly or falsely claiming monies from federal programs such as Medicare and Medicaid has cost healthcare entities $72B since 1986. How are healthcare organizations ensuring compliance and minimizing exposure risks to false claims?

In this blog, we’ll share how healthcare organizations are managing compliance around false claims and safeguarding both the integrity of healthcare services and the welfare of patients. We’ll also highlight tools to streamline compliance processes and reduce the risk of potential legal and financial judgments.

Understanding the Most Important False Claims Laws

According to the Office of the Inspector General (OIG) the five most important fraud and abuse laws that apply to physicians are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark Law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL). 

  • False Claim Act (FCA):  Under the FCA, the legal threshold has no specific intent to defraud is required. The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. Further, the civil FCA contains a whistleblower provision which can be submitted by current or ex-business partners, staff, patients, or competitors.
  • The Anti-Kickback Statute (AKS): Prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals, prescriptions, durable medical supplies, and medical services that are funded by the Centers for Medicare and Medicaid Services (CMS). Remuneration is anything of value including direct payments, cash, speaker fees, excessive compensation for directorships, stock, options, free or reduced rent, and much more. 
  • The Physician Self-Referral Law (STARK), commonly referred to as the Stark law, prohibits physicians from referring patients to receive designated health services payable by Medicare or Medicaid. from entities with which the physician or an immediate family member has a financial relationship, unless an exception (Safe Harbor) applies. 
  • Exclusion Statute: The OIG is legally required to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses: illegal delivery of items or services under Medicare or Medicaid; patient abuse or neglect; felony convictions for other health-care-related fraud, theft, or other financial misconduct; and felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances.
False Claim Act Anti-Kickback Statute Physician Self Referral (Stark Law) Exclusion Statute Civil Monetary Penalties Law
Fines of up to three times the programs’ loss plus $11,000 per claim filed.  May include criminal penalties & imprisonment. Penalties of up to $50,000 per kickback plus three times the amount of the remuneration. The Stark law is a strict liability statute, which means proof of specific intent to violate the law is not required. Exclusion from all reimbursable services, orders, and all related expenses that are funded by Federal healthcare programs.  Penalties range from $10,000 to $50,000 per violation

How are Healthcare Organizations Ensuring Compliance and Minimizing Exposure Risks to False Claims?

Compliance strategies play a pivotal role in mitigating risks associated with non-adherence to healthcare regulations, including the peril of false claims. By implementing a robust compliance plan, organizations proactively address potential vulnerabilities, thereby reducing the likelihood of legal complications and financial losses. This approach not only safeguards the institution’s reputation but also ensures the delivery of high-quality patient care.

Follow OIG Compliance Program Guidance

The OIG offers seven components of a compliance program and following this guidance is the best way to minimize exposure risks. Although there is a significant increase in complexity of healthcare laws and regulations that may vary between the federal and state governments, Healthcare leaders must understand current and updated legislation, inform (train) their organization on compliance responsibilities, enforce mandates, and provide staff an opportunity to report suspicious activities and conduct that violates the organization code of conduct.

Remain Aware of Evolving Compliance Laws

As you well know, compliance regulations are constantly being adjusted. Here are some recent adjustments that may impact your risk exposure related to false claims:

  • The Consolidated Appropriations Act of 2023 introduced new exceptions that allow certain health care entities to offer mental health and behavioral health support programs without fear of violating the Stark Law or AKS.  The exception is intended to increase the availability of mental and behavioral services to medical professionals.
  • Final Rule: Modernizing and Clarifying the Physician Self-Referral Regulations” (December 2020) established three new exceptions based on  value-based arrangements, donation of cyber security technology and services, along with revisions and clarifications of existing exceptions. 

Maintain Continuous Improvement

Compliance efforts are not static; they require ongoing evaluation and improvement. Successful healthcare organizations regularly assess their compliance programs, policies, and procedures to identify areas for enhancement and ensure alignment with regulatory changes and industry standards. If weaknesses are identified during these assessments, assigning additional training is a great way to show enforcement agencies that you are working to solve the problem.

Use Technology to Remain Compliant 

With the technology available today, it is easier than ever to provide training and documentation to keep your team compliant. MedTrainer makes it easy to connect corporate compliance policies to training. With nearly 1,000 healthcare-specific courses, there are many options to ensure employees are educated on fraud detection and false claims. Plus it’s easy to upload your own facility-specific training as needed.

Using online incident reporting software with anonymous reporting helps to identify issues before an audit and help you to determine patterns or trends to proactively address issues. The OIG suggests that organizations provide incentives to staff to increase internal reporting and avoid lengthy investigations. 

By systematically addressing compliance risks, healthcare organizations can foster a culture of accountability and ensure the delivery of ethical, safe, and high-quality healthcare services. Learn how MedTrainer can help.

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