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Discover how the False Claims Act and Medicaid often go hand in hand.

False Claims Act and MedicaidGiven the size and importance of social welfare programs in the United States, it’s no wonder you will see the False Claims Act and Medicaid close to each other. The bigger the government program, the more money is at stake and the more bureaucracy available to hide the fraud. The purpose of this blog is to explain and discuss the relationship between the False Claims Act and Medicaid.

What Is Medicaid?

Medicaid is an important government program that provides healthcare to those who cannot afford to pay for it themselves. Medicaid is not the same as Medicare. Medicare refers to the government program that provides health insurance services to those who are 65 years of age or older. In simplified terms, Medicaid depends on financial need while Medicare depends on age.

Both federal and state governments handle Medicaid. The program is massive, with costs approaching a trillion dollars each year. With all that money comes the potential for government waste and fraud. That’s where the False Claims Act comes in to fight any fraud that may occur.

What Is the False Claims Act?

The False Claims Act is a federal law that creates legal liability to those who defraud the federal government. It forces those who defraud the government to pay back what they stole, plus additional monetary damages. One of the unique features of the False Claims Act is that it allows individuals (called relators) to bring lawsuits against defrauders to recover money for the federal government. These relators bring the lawsuit on behalf of the government. In return for their efforts, they receive a portion of the money recovered. This portion typically amounts to 15 percent to 25 percent. It can be a little bit higher or lower. It depends on the relator’s level of help provided to the federal government and any involvement in the fraud itself.

How Are the False Claims Act and Medicaid Related?

The False Claims Act affects Medicaid in several ways. First, it allows the federal government to have money it otherwise would not have. The federal government gets this money through a qui tam lawsuit recovery. Or it works by stopping fraud from continuing.

If the federal government recovers money from a healthcare related qui tam lawsuit, it can potentially recover millions of dollars. It can then theoretically use this money to help pay for government operations and programs, including Medicaid. But a more effective way for the federal government to obtain money to help pay for Medicaid is to stop the fraud from continuing.

Let’s say a qui tam action is unsuccessful in recovering any money. There’s a pretty good chance that the fraud no longer takes place. Depending on how much money the government was losing to the fraud, this could amount to millions of dollars each month. And without the qui tam lawsuit or fraud investigation by the Department of Justice (after someone blows the whistle), this fraud could continue undetected for years.

False Claims Act and Medicaid: A Deterrent

Second, the False Claims Act can act as a deterrent. It convinces those who might defraud the government to not to. Perhaps the idea of stealing money from the government sounds great. But consider the potential monetary penalties involved. Adding them on top of returning the original amount stolen often makes the potential fraudster think twice. It’s one thing to pay back what you took. It’s another to have to pay three times the amount you stole. Even worse, there’s an extra $5,000 to $10,000 for each occurrence of fraud. Additionally, they’ll have to consider that because of the qui tam reward, they’ll have to be on the lookout for potential whistleblowers. They might end up revealing the fraud and helping the federal government in its investigation and prosecution.

Third, the False Claims Act can affect Medicaid by adding more paperwork to the healthcare process. Because of the False Claims Act, a healthcare provider that accepts payments through Medicaid has more work to do. They might have special policies and procedures in place to stop its employees from engaging in fraud against the federal government.

Safeguards against Medicaid Fraud

These safeguards could include extra paperwork for doctors and nurses. Or it could mean additional review of billing documentation by outside auditors. All this will cost money, in either extra expenses or lost productivity.

Then there’s the less obvious consequences, such as lower employee morale. The employees may resent that their bosses don’t trust them. Or that they have to do additional work because of a few dishonest workers who commit fraud. This resentment can be especially dangerous because it makes it easier, on a psychological level, for an employee to misbehave. This could include doing something in violation of the False Claims Act. Or it could mean something completely different, such as stealing directly from the employer or even coming into work a few minutes late on purpose.

Find out More about the Relationship Between the False Claims Act and Medicaid

Click to find out more about False Claims Act and Medicaid by contacting our team at Bothwell Law Group online now.

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