Kings Harbor Multicare Center

 

 

                      Federal and New York State False Claims Acts and

                 New York State Health Care Fraud Laws

 

Summary of Laws and Applicable Policies **

 

 

Bronx Harbor Health Care Complex, Inc. d/b/a Kings Harbor Multicare Center (“Kings Harbor”) expects its employees, agents and contractors to refrain from conduct that may violate federal and state laws, rules and regulations relating to the provision of and payment for health care items and services.  It is our ethical and legal obligation to ensure that all billing and claims reimbursement activities are based on materially complete information and that we only receive payment and reimbursement for that which we are entitled.  Our conduct must at all times be consistent with accepted and sound fiscal, business and medical practices.  Clinical and medical personnel must provide services that meet professionally recognized standards of care and all personnel involved in coding, billing and claims submissions must maintain high ethical standards and must become familiar with all rules and laws applicable to such activities.

 

Federal False Claims Act:

 

The Federal Civil False Claims Act makes it illegal for any person to (i) knowingly present, or cause to be presented a false or fraudulent claim for payment or approval; (ii) knowingly make, use, or cause to be made or used, a false record or statement material to a false or fraudulent claim; (iii) conspire to commit a violation of any provision of this Act; or (7) knowingly make, use, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government, or knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the government.  “Knowingly” means that the person has actual knowledge of the information, acts in deliberate ignorance of the truth or falsity of the information, or acts in reckless disregard of the truth or falsity of the information and requires no proof of specific intent to defraud.  Liability under the act is for a civil penalty of not less than $5,500 and no more than $11,000 plus three (3) times the amount of damages which the government sustains as a result of the fraudulent act.  However, the court may assess a lesser amount not less than double the damages, under certain circumstances.  To qualify for reduced damages, the facility must report the false claim to the Government within 30 days after the date on which the facility first obtained the information about the violation and before the commencement of any criminal prosecution, civil action, or administrative action with respect to the false claim and the facility did not have actual knowledge of the existence of an investigation into such violation.  In addition, the facility must fully cooperate with any Government investigation.

 

The False Claims Act provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the False Claims Act.  (31 U.S.C. § 3730(h)).  Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.

 

Federal Program Fraud Civil Remedies Act:

 

Under the Federal Program Fraud Civil Remedies Act, any person who makes, presents, or submits (or causes to be made, presented, or submitted) a claim that the person knows, or has reason to know, (i) is false, fictitious, or fraudulent; (ii) includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent, or that omits a material fact (which the person has a duty to include and the statement is false, fictitious, or fraudulent as a result of such omission); or (iii) is for payment for the provision of property or services which the person has not provided as claimed may be subject to, in addition to any other remedy, a civil penalty of not more than $5,500 for each claim or statement.  The violator may also be subject to an assessment of two (2) times the amount of such claim.  An additional penalty of up to $5,500 may be imposed on any person who makes, presents, or submits (or causes to be made, presented, or submitted) a written statement that (i) the person knows, or has reason to know (a) asserts a material fact which is false, fictitious, or fraudulent, or (b) omits a material fact (which the person has a duty to include) and the statement is false, fictitious, or fraudulent as a result of such omission; and (ii) contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement.

 

New York State Laws:

 

New York State False Claims Act:

 

The New York False Claims Act makes it illegal for any person to (i) knowingly present, or cause to be presented, to an officer, employee or agent of the State or a local government a false or fraudulent claim for payment or approval; (ii) knowingly make, use, or cause to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the State or a local government; and/or (iii) conspire to defraud the State or a local government by getting a false or fraudulent claim allowed or paid.  "Knowingly" means that the person has actual knowledge of the claim or information, acts in deliberate ignorance of the truth or falsity of the claim or information, or acts in reckless disregard of the truth or falsity of the claim or information.  The civil penalty for filing a false claim is $6,000 to $12,000 per claim and the recoverable damages are between two (2) and three (3) times the value of the amount falsely received.  In addition, the false claim filer may have to pay the government’s legal fees.  However, the court may assess a lesser amount of not more than double the damages, under certain circumstances.  To qualify for the "not more than double damages" provision, the provider must report the false claim to the Government within 30 days after the date on which the provider first obtained the information about the violation and before the commencement of any criminal prosecution, civil action, or administrative action with respect to the false claim.  In addition, the provider must fully cooperate with any Government investigation. 

 

The False Claims Act provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the Act.  Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.

 

Social Services Law §§ 145 et seq. False Statements:

 

It is unlawful to knowingly obtain or attempt to obtain payment for items or services furnished under any Social Services programs, including Medicaid, by means of a false representation, statement, deliberate concealment or other fraudulent scheme or device.  The State or local Social Services district may recover three (3) times the amount incorrectly paid, or in the case of nonmonetary false statements, three (3) times the amount of damages which sustained by the state or $5,000, whichever is greater.  In addition, the Department of Health may impose a civil penalty of up to $2,000 per violation.  If repeat violations occur within five (5) years, a penalty up to $7,500 per violation may be imposed if they involve more serious violations of Medicaid rules, billing for services not rendered or providing excess services.  In addition, the State has the right to recover civil damages equal to three (3) times the amount by which any figure is falsely overstated,

 

Moreover, any person who submits false statements or deliberately conceals material information in order to receive public assistance, including Medicaid, is guilty of a misdemeanor.

 

Social Services Law §366-b, Penalties for Fraudulent Practices:

 

Any person who, with intent to defraud, presents for allowance or payment any false or fraudulent claim for furnishing services or supplies, knowingly submits false information for the purpose of obtaining greater compensation than that to which he is legally entitled, or knowingly submits false information for the purpose of obtaining authorization for furnishing services or supplies under the medical assistance program, or who obtains or attempts to obtain, for himself or others, medical assistance by means of a false statement, concealment of material facts, impersonation or other fraudulent means is guilty of a Class A misdemeanor.

New York State Criminal Laws

 

Penal Law Article 155, Larceny:

 

The crime of larceny applies to a person who, with intent to deprive another of his property, obtains, takes or withholds the property by means of trick, embezzlement, false pretense, false promise, including a scheme to defraud, or other similar behavior.  It has been applied to Medicaid fraud cases.

 

Penal Law Article 175, False Written Statements:

 

There are four crimes in this Article that relate to filing false information or claims.  Actions include falsifying business records, entering false information, omitting material information, altering an agency’s business records, or providing a written instrument (including a claim for payment) knowing that it contains false information.  Depending upon the action and the intent, a person may be guilty of a Class A misdemeanor or a Class E felony.

 

Penal Law Article 176, Insurance Fraud:

 

This Article applies to claims for insurance payment, including Medicaid or other health insurance.  The six crimes in this Article involve intentionally filing a false insurance claim.  Under this article, a person may be guilty of a felony for false claims in excess of $1,000.  Four crimes in this Article relate to filing false information or claims and have been applied in Medicaid fraud prosecutions:

 

Penal Law Article 177, Health Care Fraud:

 

This Article establishes the crime of Health Care Fraud.  A person commits such a crime when, with the intent to defraud any publicly or privately funded health insurance or managed care plan, including Medicaid, he/she knowingly provides false information or omits material information for the purpose of requesting payment for a health care item or service and, as a result of the false information or omission, receives such a payment in an amount to which he/she is not entitled.  Violators may be subject to fines, imprisonment, or both.

 

New York State Whistleblower Protection

 

Labor Law §740:

 

An employer may not take any retaliatory action against an employee if the employee discloses information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official.  Protected disclosures are those that assert that the employer is in violation of a law that creates a substantial and specific danger to the public health and safety or which constitutes health care fraud under Penal Law §177 (knowingly filing, with the intent to defraud, a claim for payment that intentionally has false information or omissions).  The employee’s disclosure is protected only if the employee first brought up the matter with a supervisor and gave the employer a reasonable opportunity to correct the alleged violation.  If an employer takes a retaliatory action against the employee, the employee may sue in state court for reinstatement to the same, or an equivalent position, any lost back wages and benefits and attorneys’ fees.  If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the employer.

 

Labor Law §741:

 

A health care employer may not take any retaliatory action against an employee if the employee discloses certain information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official.  Protected disclosures are those that assert that, in good faith, the employee believes constitute improper quality of patient care.  The employee’s disclosure is protected only if the employee first brought up the matter with a supervisor and gave the employer a reasonable opportunity to correct the alleged violation, unless the danger is imminent to the public or patient and the employee believes in good faith that reporting to a supervisor would not result in corrective action.  If an employer takes a retaliatory action against the employee, the employee may sue in state court for reinstatement to the same, or an equivalent position, any lost back wages and benefits and attorneys’ fees.  If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the employer.

 

Billing and Claims Activities That May Violate the Law:

 

The following are examples of improper billing and claims activities, but are not meant to be exhaustive:

 

·        Billing for services or supplies that were not provided;

·        Submitting a claim containing known false information or omitting material information;

·        Filing a claim for services not medically necessary, or, if medically necessary, not to the extent rendered (e.g., a battery of diagnostic tests is given where, based on diagnosis, only a few are needed);

·        Altering claim forms to increase payments;

·        Arranging to get paid twice for the same service by billing both Medicare/Medicaid and the patient or both Medicare/Medicaid and another insurer (i.e. duplicate billing);

·        Revising a claim for a service that is not covered so it will be covered;

·        Misrepresenting the services performed, the fee for the services, the date of the services, or the identity of the patient;

·        Falsifying records to appear to meet conditions of participation or conditions of coverage;

·        Omitting material information when making a claim or when submitting a written statement in support of such claim

·        Scheming with another person to manipulate claims and increase payments (e.g. upcoding);

·        Using the adjustment payment process to generate fraudulent payments; 

·        Billing services over a period of days when all treatment occurred during one visit;

·        Improperly completing certificates of medical necessity (CMN);

·        Providing incomplete, false, or misleading information about ownership of a laboratory or facility;

·        Repeatedly charging Medicare/Medicaid patients more than the permitted amounts or repeatedly violating a participation agreement or assignment agreement;

·        Excessive charges for services or supplies;

·        Improper billing practices, including submission of bills to Medicare instead of third-party payers which are primary insurers for Medicare beneficiaries;

·        Increasing charges to Medicare beneficiaries but not to other patients; and 

·        False or misleading documentation regarding services provided.

 

Reporting:

 

All employees, agents and contractors are required to report promptly all known or suspected violations of billing and claims submission policies to the Administrator, Compliance Officer, immediate supervisor or other designated party, in writing or through the anonymous telephone hotline at the facility.

 

There will be no retaliatory action taken against employees or agents who report in good faith to the facility or any governmental official or agency.  Retaliation or any form of reprisal based upon an employee‘s or agent’s good faith reporting of potential fraudulent claims activity is strictly prohibited, and will not be permitted or tolerated by the facility.  Improper retaliation includes actual or threatened discharge, demotion, suspension, harassment, discrimination or other adverse employment action.  Activities protected against retaliation by federal and New York State law and regulation include: disclosing or reporting (or threatening to disclose or report) to a supervisor, the facility or to a governmental official or agency an activity, policy or practice that is in violation of the law; testifying or providing information for a hearing, investigation or inquiry; initiating or assisting in any action or investigation; and/or objecting to or refusing to participate in any such illegal activity.  Employees and agents are expected to report any possible instances of retaliatory action immediately to the Administrator and/or Compliance Officer or other designated party.  Further, the Federal False Claims Act, New York False Claims Act, and New York State Labor Law § 740 specifically prohibit and provide remedies for such retaliatory action.

 

Detecting and Preventing Fraud, Waste and Abuse:

 

In accordance with the requirements of relevant false claims laws, and to further ensure the accuracy and appropriateness of claims submitted, the facility has adopted the following rules that its employees, agents and contractors must strictly follow:

 

·        Detect and prevent the filing of claims for services not rendered.  All documentation must be reviewed and checked for accuracy by clinical staff prior to submission.  Furthermore, billing staff must review the completeness and check for inconsistencies in the documentation supporting the bill prior to submitting a claim;

·        Detect and prevent the filing of claims for services rendered that were not medically necessary.  Documentation submitted by the clinical departments must be consistent with medical necessity requirements ("reasonable and necessary" in the context of Medicare).  All clinical and billing staff shall communicate effectively to ensure that documentation is consistent;

·        Detect and prevent the submission of any claim that contains false information.  All claim forms must be reviewed for accuracy prior to presentation for payment;

·        Detect and prevent any claim for inadequate or substandard services.  Clinicians must review services rendered and supporting documentation to determine that the level of services provided is adequate to support a claim for payment.

 

The clinical and billing staff, in coordination with the Compliance Officer or other designated party,

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will conduct periodic reviews to determine the accuracy of documentation utilized to support claims for reimbursement.

 

The facility has adopted Policies and Procedures for preventing and detecting fraud, waste and abuse of the federal health care programs, including Medicare and Medicaid.  All employees, agents and contractors must strictly follow these policies.  These policies and procedures are available for review upon request.  To review these policies and procedures, contact the Compliance Officer.  The following represents a summary of relevant policies and procedures:

 

Policy and Procedures:  Designation and Responsibilities of the Compliance Officer

 

It is the policy of the facility to ensure that it conducts itself in compliance with all applicable laws, rules, regulations and other directives of the federal, state and local governments, departments and agencies.  In this regard, and in furtherance of this policy, the facility shall have at all times an individual designated as a Compliance Officer to oversee and monitor its Compliance Program.

 

Coordination and communication are the key functions of the Compliance Officer with regard to planning, implementing, and monitoring the facility's Compliance Program.  The Compliance Officer shall develop and assist the facility in putting appropriate compliance processes in place to implement the Compliance Program.  Examples of these activities and processes include, but are not limited to, the following:

 

·        serve as a trusted source of guidance for employees, agents and contractors with regard to compliance related matters;

·        test the billing and claims reimbursement staff on their knowledge of applicable program requirements and claims and billing criteria;

·        conduct or oversee unannounced audits of claims and billing information;

·        assess contractual relationships with contractors, consultants and potential referral sources;

·        determine whether individuals who previously have been reprimanded for compliance issues are now conforming to policies;

·        develop, coordinate and participate in compliance educational and training programs; and

·        coordinate internal compliance review and monitoring activities, including annual or periodic reviews and oversee any resulting corrective action.

 


Policy and Procedures:  Retention of Records

 

It is the policy of the facility that all employees, agents, contracted health professionals and vendors maintain and preserve all documents, including compliance, business and medical records, and secure them against loss, destruction, unauthorized access, unauthorized reproduction, corruption or damage.  Compliance with regulations concerning document retention periods is required.

 

The primary components of the facility's record maintenance, access and retention policies and procedures include, but are not limited to, the following:

 

·        Records will only be accessible by authorized personnel on a need-to-know basis or legally authorized individuals, and in strict conformance with applicable federal, state, and local laws and regulations, including those relating to privacy and confidentiality.

·        Medical records may only be accessed by authorized individuals and personnel.  Questions as to whether medical records should be released and/or distributed should be directed to the facility’s Privacy Officer and/or the Administrator where appropriate.

·        Records will be stored in a systemized manner that preserves confidentiality and takes into consideration environmental elements.

·        Security of electronic records shall comply with HIPAA regulations.

           

Policy and Procedures:  Individuals Excluded from Federal

                              and State Health Care Benefit Programs

 

It is the policy of the facility not to enter into employment, contractual or business arrangements, in any capacity, with individuals or entities that are barred or excluded from participating in federal or state health care benefit programs.  This shall be accomplished through screening programs, which include reviewing the U.S. Office of Inspector General's (OIG) List of Excluded Individuals/Entities (LEIE) and other applicable sources of such information prior to hiring, engaging or otherwise transacting business with any person or entity, and by conducting such review periodically after employing, contracting with or otherwise engaging any individual or entity.

 

Policy and Procedures:  Conflicts of Interest

 

It is the policy of the facility that all personnel avoid any and all activities that conflict with their responsibilities and obligations to the facility and its Residents.

 

The policies and procedures relating to conflicts of interest include, but are not limited to, the following:

 

·        Employees or agents must not have an interest in or serve as director, officer, manager or member of any entity in competition with Kings Harbor, without permission.

·        Any employee and agent who perform work or render services for any competitor of the facility or for any organization that does business with or seeks to do business with the facility outside of the normal course of his or her employment shall notify the Administrator.

·        Business with any vendor, supplier, contractor, or agency, or any of their officers or employees that is not conducted on behalf of the facility is prohibited, unless previously authorized by the Administrator.

·        Employees and agents shall not permit their names to be used in any fashion that would tend to indicate a business connection with any organization that does business with or seeks to do business with the facility without the prior approval of the Administrator.

·        The facility shall not be represented by an employee or agent in any transaction in which he or she or an immediate family member has a personal financial interest.

·        Confidential information should not be discussed with anyone outside of the facility.  This confidential information includes, but is not limited to, personnel data, patient lists, clinical information, financial data, research data, strategic plans, potential mergers and acquisitions, marketing strategies, processes, techniques, computer software, any information with a copyright, financial results or other business dealings.

·        Employees and agents shall not accept any gifts, favors, or things of value, including discounts, from prospective or current suppliers and/or contractors. 

·        Employees and agents shall not engage in any activities or outside interests that influence their ability to make objective decisions in the course of their job responsibilities. 

·        Potential conflicts of interest involving Associates or their immediate family members (spouse, parents, brothers, sisters, and children) are required to be reported to the Administrator using the facility's “Conflict of Interest Disclosure Statement” form.

 

Policy and Procedures:  Billing and Claims Reimbursement

 

It is the policy of the facility to comply with all relevant billing and claim reimbursement requirements.  All personnel involved in coding, billing and claims submissions must maintain high ethical standards and must know and adhere to all requirements for the health care industry, including all rules and regulations pertaining to coding, billing, claims submission and reimbursement, including, among others, Medicare and Medicaid regulations.  All billing personnel are expected to attend training and education sessions.  Billing personnel will be regularly monitored to ensure that they are not engaging in any activity that may be fraudulent or abusive under the Medicare and Medicaid regulations.  Examples of such activities are set forth above.

 

Personnel are required to report promptly all known or suspected violations of billing policies to their immediate supervisor, Administrator, Compliance Officer or other designated party, in accordance with the facility's Policy and Procedures entitled "Internal Reporting of Compliance Related Matters."

 

Policy and Procedures:  Compliance Training and Education

 

It is the policy of the facility as part of its continued commitment to compliance with legal requirements, to conduct mandatory annual compliance and policy education and training for its employees, physicians and other health care practitioners.

 

Participation in a minimum of one (1) hour of basic compliance training and education annually is required.  Individuals involved in specialty fields such as coding, claims development and billing will require additional compliance training and education addressing documentation, claims, billing, and fraud and abuse issues.  Additional training attendance may be required as part of an employee performance improvement measure or action plan.  Attendance at educational and training sessions is the responsibility of each individual and will be documented.  In addition to periodic training and in-service programs, relevant new compliance information will be disseminated to affected personnel.

 

Policy and Procedures:  Employee Screening

 

It is the policy of the facility to ensure that its employees, agents and independent contractors are properly screened in accordance with facility procedures and in compliance with applicable laws and regulations, prior to employment or engagement with the facility, and periodically during their tenure with the facility.  Offers of employment or engagement, as well as continued employment and engagement, shall be contingent upon satisfactory screening.

                                   

Policy and Procedures:  Monitoring and Auditing

 

It is the policy of the facility to ensure that the facility, its employees, contractors and agents conduct business and activities in compliance with all applicable laws, rules, regulations and other directives of the federal, state and local governments, departments and agencies.  In this regard, and in furtherance of this policy, the facility shall conduct periodic audits designed to address relevant compliance issues.  Internal or external auditors will conduct periodic audits, which will be overseen by the Compliance Officer.

 

Policy and Procedures:  Internal Reporting of Compliance Related Matters

 

It is the policy of the facility to maintain an internal reporting mechanism for all employees, agents and contractors to report actual or perceived violations of the facility's Code of Conduct, Compliance Program, policies and procedures and applicable laws and regulations.

 

Anyone with current knowledge of an event, occurrence or activity that appears to violate applicable laws and regulations, the facility’s Code of Conduct or any of its policies or procedures should promptly communicate the actual or perceived violation to their immediate supervisor, the Administrator, Compliance Officer or other designated party.

 

If the individual reporting prefers not to report the matter to a supervisor or the Administrator, he/she should call the facility’s Compliance Hotline at 718-405-3691.  Callers to the hotline will remain anonymous.

 

As explained above, there will be no retaliatory action taken against employees or agents who report in good faith to the facility or any governmental official or agency.  Retaliation or any form of reprisal based upon an employee‘s or agent's good faith reporting of potential fraudulent claims activity is strictly prohibited, and will not be permitted or tolerated by the facility.  Employees and agents are expected to report any possible instances of retaliatory action immediately to the Administrator and/or Compliance Officer or other designated party.

 

Policy and Procedures:  Investigations of Compliance Reports

 

It is the policy of the facility to make reasonable inquiry into any report concerning activity that may be contrary to applicable laws and/or regulations.  Upon receipt of a report that suggests that improper conduct has occurred, an investigation under either the direction and control of legal counsel or the Compliance Officer may be commenced.  The investigative techniques used shall be implemented in order to facilitate the correction of any practices not in compliance with applicable laws and/or regulations and to promote, where necessary, the development and implementation of policies and procedures to ensure future compliance.

 

Questions?

 

The facility encourages employees, contractors and agents to raise questions or concerns, and seek clarification regarding these laws or related policy issues with the Compliance Officer or other designated party.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         

 

** These policies are deemed to be incorporated into the facility's Code of Conduct and its Employee Handbook.