The False Claims Act Analysis

On October 24, 2012 the Unites States of America filed a lawsuit against the Bank of America Corporation for selling toxic mortgages to Fanny Mae and Freddy Mac which cost the taxpayers more than $1 billion dollars. The lawsuit sought penalties under two laws; the False Claims Act, which is normally used to target fraud against the government, and the 1989 FIRREA Law. FIRREA does not usually hold up in court, but the government is once again relying on it because of the financial crisis as a possibility for targeting civil fraud concerning financial institutions. (Viswanatha, Aruna, 2013) (Stempel, Jonathan, 2012)

Healthcare services have been on the rise for over 10 years now. According to a 2012 consumer alert, the industry provided $2.26 trillion in payments for more than four billion health insurance benefit claims in the year 2011(Fraud in Health Care). The bulk of the claims and the mainstream of fraud and abuse stem from the Medicare system professionals, who are knowledgeable about the process and persuade new clients into handing over their pertinent information in hopes of deception and illegitimate claims. Multiple and double billing, fraudulent prescriptions, are some of the major flaws in this organization that has made the healthcare services industry curdle. (AGHAEGBUNA, 2011) This is a non-violet crime and is often committed by very

Although Congress has used several anti-fraud measures to protect the federal government health care programs, the False Claims Act of 1986 has become the main weapon that government prosecutors use against perpetrators of health care fraud. Designed to prevent fraud and other abuses in federal government programs, the False Claims Act has been the primary statute the government has used in its fight against health care fraud. However, government prosecutors do not rely on one statute in their prosecution of alleged cases of health care fraud. Instead, they rely on a combination of statutes, but the False Claims Act has emerged as the main statutory weapon.

Medicare and Medicaid have cause a great deal of damage to the American society. "Years of scandal have shown the waste, fraud and abuse that is rampant in Medicare and Medicaid." (Fallen Guardians of Justice: How the Supreme Court is

Permits private parties to file qui tam actions claiming that defendants defrauded the government (False Claims Act Overview, 2016).

Health care fraud and abuse is a significant contributor to high health care spending, resulting in the wasteful spending of health care dollars. The Federal Bureau of Investigation (FBI) and National Health Care Anti-Fraud Association (NHCAA) estimates that 3 to 10 percent of health care dollars are lost to fraud and abuse (Federal Bureau of Investigation, 2010). Fraud is the intentional deception or misrepresentation that an individual knows to be false or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to themselves or some other person (Ryan, 2006). Bloomberg reports health care expenditures are rising faster than the rate of inflation and spending in the US has nearly doubled in the last decade and one-half of health care

The federal Anti-Kickback Statute is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of federal health care program.  In return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program. For the mens rea requirement the defendant must “knowingly and willfully” solicit, receive, or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly in cash or in kind to induce such person…to purchase, lease, order, or arrange for or recommend purchasing…or

Medicare and Medicaid fraud has some strengths as well as weaknesses. A strength that comes with healthcare fraud is The Affordable Care Act. This act helps to fight health care fraud, abuse and waste (Department of Human Services, 2014). Many laws have been implemented to help commit those people that have been committing Medicare and Medicaid fraud. Per the Center of Medicare and Medicaid services website “The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses, establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices” (Department

According to the Federal Bureau of Investigation (FBI) “health care fraud costs the country an estimated $80 billion dollars a year” ("Health Care Fraud," n.d., p. 1). Because health care costs continue to rise more rapidly than the rate of inflation the threat of health care fraud continues to rise. The Affordable Health Care Act has put new policies in place to identify and stop health care fraud. The FBI along with other government, insurance, and public agencies have joined together to combat fraud at every level. New rules in identifying, investigating, and prosecuting fraud before payments are made to medical providers could save billions of

Fraud and waste of resources allocated for Medicare pose major risks to the program. Medicare is very vulnerable to a number of frauds majorly due to the fact that the program is hardly audited. Medicare scams occur in various ways that include phantom billing where healthcare providers demand money from Medicare for services not offered. The other form of fraud happens in the shape of patient billing where the patients collude with scammers to claim for kickbacks for false medical treatments. The last type of fraud is the upcoding scheme and unbundling, where bills are inflated by claiming that a patient needs more valuable services or procedures than the existing. The government has been sensitizing the general public on the need to avoid such frauds by not disclosing their Medicare card details to

The Federal Tort Claims Act is a limited waiver of the federal government’s sovereign immunity when its employees are negligent within the scope of their employment. Typically the government cannot be sued whenever they have committed a tort or any of their employees have committed a tort, making the government basically immune from being sued. The only time they can be sued is when the government says they can be sued. Luckily for victims of torts, the government created the Federal Tort Claim Act which allows the victims of torts to sue the government for negligence of their employees. There are certain limitations and criteria that must be followed.

Federal directives which oversee Medicare fraud and abuse incorporate all the following: 1) False Claims Act (FCA) 2) Anti-Kickback Statute (AKS) 3) Physician Self-Referral Law (Stark Law) 4) Social Security Act 5) United States Criminal Code.

Now that we have looked at the basic facts surrounding this horrific crime, let’s take a look at who is affected and a few different examples of healthcare fraud, to put this all into perspective. Medicaid and Medicare programs began in the 1960’s. While Medicare would constitute the Federal level, Medicaid falls within the state level and are vastly different entities. One article touched on the different areas of Medicaid fraud conducted by physicians. Research has shown that offenders will more than likely offend in multiple areas, instead of focusing on one specific area, to hopefully deter them from being caught (Payne & Grey, 2001). Some of these areas may include one or more of the following areas. First is fee for service reimbursement which is when

U.S. Department of Health & Human Services. (2010). Reducing Fraud, Waste, and Abuse in Medicare. Retrieved June 02, 2016, from http://www.hhs.gov/asl/testify/2010/06/t20100615c.html#

I chose to review title VI of the Affordable Care Act, which encompasses transparency and program integrity. This section of the Affordable Care Act focuses on keeping Americans informed about their healthcare choices and reducing fraud and abuse in programs funded by the federal government. “It attempts to strengthen doctor-patient relationships using new medical research and access to more data to allow doctors and patients to make the decisions that work best for them” (Affordable Care Act Summary, n.d.).