The Deficit Reduction Act of 2005 (DRA) mandates compliance programs for those institutions receiving or making $5 million or more annually in Medicaid payments. The DRA’s False Claims Act Amendment is intended to reduce the amount of fraud, waste, and abuse in state and federal health care programs through employee education about the federal False Claims Act, state false claims acts, civil and criminal penalties, and protections from retaliation for those employees who report wrongdoings, misconduct, or violations of laws and regulations in good faith.
Federal False Claims Act
The federal False Claims Act covers fraud involving any federally funded contract or program such as Medicare or Medicaid and establishes liability for any person who knowingly presents or causes to be presented a false or fraudulent claim to the U.S. government for payment.
Virginia Fraud Against Taxpayers Act
The Virginia Fraud Against Taxpayers Act is our state’s version of the federal False Claims Act and contains parallel provisions. This state law helps the Commonwealth combat fraud and abuse and recover losses resulting from fraud in programs, purchases, and contracts.
Federal False Claims Act Liability
Violations of the False Claims Act can result in civil monetary penalties ranging from $5,000 to $10,000 for each false claim submitted and repayment of three times the amount of damages sustained by the U.S. government. A provider or supplier found in violation may also be excluded from participation in federal health care programs.
Examples of Fraud Committed by Employees
- Fabricating claims or changing provider addresses to intercept payments
- Providing false information on employment application
- Identity theft
- Accepting or offering a kickback or bribery in exchange for money
Examples of Fraud Committed by Providers
- Participating in kickbacks, payments or other types of compensation made in order to influence and gain profit from an individual or company.
- Forgery of a physician’s signature.
- Billing for medical services that were not given.
- Billing for undocumented or medically unnecessary services.
- Duplicate billing.
- Assigning incorrect codes to secure a higher reimbursement (upcoding).
- Unbundling codes with the intent to increase reimbursement.
Examples of Fraud Committed by Members
- Loaning/sharing ID cards to obtain healthcare services or prescriptions.
- “Doctor shopping” and excessive trips to the ER for control substances (narcotics).
- Falsifying information on their Medicaid application in order to receive benefits.
- Falsifying or altering prescriptions.
- Reporting lost or stolen prescriptions, which have been sold.
When a member is injured, member’s insurance company is responsible for the medical costs. Virginia Premier follows a “pay and chase model” where it first pays for the medical costs and then expects reimbursement from the member’s insurance company.
Why is subrogation needed?
Subrogation is needed so that the member does not have to bear the medical costs associated with the injury.
When is subrogation needed?
- Car accident
- Job Injury
- Personal injury
- Crime committed
- Medical malpractice
What are the two types of subrogation?
- Medicaid Subrogation (Medallion and MLTSS). This is handled by DMAS. (Department of Medical Assistance Services).
- Medicare Subrogation (DSNP and MAPD). This is handled by an external vendor.
- Criminal Injury Subrogation. This is handled internally.
Who requests for subrogation?
- State Agency like Criminal Injuries Compensation Fund (CICF).
What are the steps followed for the process of subrogation?
- Complete a Request Letter. Please provide all the details, including your email address.
- Complete an Authorization Form if the member is represented by an attorney.
Please email the Request Letter and the completed Authorization Form to firstname.lastname@example.org. All documents and requests for subrogation lien data should be directed and addressed to DMAS.
Qui Tam Whistleblower Provisions
As a means to encourage individuals to come forward and report misconduct involving false claims, the False Claims Act’s “whistleblower” provision allows any person with actual knowledge of allegedly false claims, who has first made a good faith effort to exhaust internal reporting procedures, to file a lawsuit on behalf of the government and potentially share in a percentage of the amount recovered.
The Federal False Claims Act grants protection from retaliation for filing a lawsuit or assisting in a False Claims Act action. Virginia Premier policy prohibits any type of retaliation against those who report concerns. This policy works in conjunction with the Federal False Claims Act and the Virginia Fraud Against Taxpayers Act in protecting those who report misconduct.
Any Virginia Premier employee who has knowledge of actual or potential wrongdoing is encouraged to report their concerns to their department supervisory chain-of-command (supervisor, manager, director, Vice President) or the Corporate Compliance Officer. Any individual who has knowledge of actual or potential wrongdoing is encouraged to report their concerns to the Corporate Compliance Officer at 800-727-7536, ext. 5173. However, you are encouraged to use the reporting option that best suits your comfort level or you may report concerns directly to the Compliance Helpline at 800-981-6667 or Email: email@example.com
Virginia Premier has established several mechanisms to detect and combat fraud and abuse. Our compliance and integrity program outlines auditing and monitoring techniques used to detect fraud, abuse and waste. Additional procedures and processes are established to audit and monitor activities at every level.