In essence, a false claim is any knowing claim or statement that is false and made for the purpose of defrauding another, or conspiring with another to do so. The False Claims Act (31 U.S. C. secs 3729-3733), or “Lincoln Law” is a federal statute that imposes liability on those who attempt to defraud governmental programs. These cases arise both in the pursuit of payment from governmental programs and the avoidance of payment rightfully owed to governmental programs.
What is a False Claim: Medicare and Medicaid
These claims arise in a surprisingly broad array of scenarios, many in the Medicare and Medicaid area, including fraudulent health care billing, performing inappropriate or unnecessary medical procedures, false billing of any kind for services not rendered or goods not delivered, misrepresentations regarding the quality of goods or services in billing, duplicate or false billing, or misrepresentations regarding actual costs in reimbursement claims. In all cases, in order to be held liable under the statute, the person must have submitted the false claim with knowledge of its falsity. This requirement includes: (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.
What is a False Claim: Anti-Kickback and the Stark Law
Kickbacks are also a violation of the False Claims Act. These kickbacks often involve either a hidden payment made in exchange for patient referrals, or another non-cash payment to a physician for patient referrals. These non-cash kickbacks often violate the Stark Law.
Physician self-referral is a practice in which an attorney refers a patient to a medical facility in which the physician or a member of the physician’s family has a financial interest. This poses the potential for a conflict of interest. The Stark Law is meant to prohibit this potential conflict from arising by prohibiting this self-referral. The Stark Law is a complex set of federal regulations. There are exceptions to the self-referral ban, but penalties for its violation are steep. Attorney assistance is required to determine if a violation has occurred or if the physician falls within one of the exceptions. Violation of the Stark Law is also a violation of the False Claims Act. The Stark Law (42 U.S.C. sec 1395 nn), or Physician Self-Referral Law.
Damages under the False Claims Act are substantial. For each false claim submitted, a penalty is assessed at between $5,500 and $11,000. Additionally, government’s actual damages are trebled. Damages calculations vary with the type of false claims made.
The False Claims Act allows private persons to file suit for its violation. This type of suit is called a “qui tam” action and the person bringing the suit is called a “relator.” These whistleblowers are an integral part of the False Claims Act and are rewarded and protected under the Act.