Healthcare

FraudUnderstanding Stark Law & False Claim Act

Mujeeb C Kandy - HIM6545 Instructor: Brooke Palky, CSS

False Claim ActPassed in 1863, A Primary law under which fraud cases are prosecuted.

Knowingly, directly or indirectly present to

US government official or Armed Forces a

fraudulent claim for payment or approval

Knowingly involve in making a false /

fraudulent document to get paid or approval

Obtain payment or approval of fraudulent

claim from government over

conspiracy

Knowingly involve in preparing or

presenting false document to conceal,

avoid or decrease obligation to pay the

government…

Liable for a civil penalty of US$ >5000 and =<10000 + Amount of damages

Qui Tam Law Suit

“he who brings a case on behalf of our lord the King,

as well as for himself”

How to Prevent False Claims

A Reliable EHR

HIM Professionals’ Role

Audit Trails

Fraud Detection Functionality

Section 1877 of the Social Security Act (the Act) (42 U.S.C. 1395nn), also known as the physician self-referral lawThe Stark Law

Prohibits a physician from making referrals for certain designated health

services (DHS) payable by Medicare to an entity with which he or she (or an

immediate family member) has a financial relationship (ownership, investment, or

compensation), unless an exception applies.

Prohibits the entity from presenting or causing to be presented claims to Medicare (or billing another individual, entity, or third party payer) for those referred services.

Establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse.

The Stark Law

• Denial of Payment• Refunds of collected amount• Penalty upto $15,000 for each bill• Penalty upto $100,000 for each

arrangement• Fine of 3 x the amount improperly

collected

Penalties

Clinical laboratory services.

Physical therapy services.

Occupational therapy services.

Outpatient speech-

language pathology services.

Radiology and certain other

imaging services.

Radiation therapy

services and supplies.

Durable medical

equipment and supplies.

Parenteral and enteral

nutrients, equipment,

and supplies.

Prosthetics, orthotics, and

prosthetic devices and

supplies.

Home health services.

Outpatient prescription

drugs.

Inpatient and outpatient

hospital services.

Stark Law Designated Health Services

Stark Exclusions & Exceptions

• Referral by a specialist pursuant to a consultation• Under supervision of another physician in the same group practice as referring physician• A request by a pathologist for clinical diagnostic laboratory tests/pathological examination• A Request by a radiologist for diagnostic radiology services• A request by a radiation oncologist for radiation therapy, under the supervision of the

pathologist, radiologist, or radiation oncologist.• Financial arrangements between academic institutions and affiliated hospitals & physicians

References

CMS. Gov (2015). Physician Self Referral. Retrieved from. https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/index.html?redirect=/PhysicianSelfReferral/

CMS. Gov (2015). The false claim act. Retrieved from https://downloads.cms.gov/cmsgov/archived-downloads/SMDL/downloads/SMD032207Att2.pdf

CSS. (2015). False Claim Act Lecture. Retrieved from https://courses.css.edu/bbcswebdav/pid-1302186-dt-content-rid-14726156_1/courses/201660-HIM6545-700-16SP-60681-M/201590-HIM6545-700-15SU-70289-M_ImportedContent_20150530053529/Unit%201/False%20Claims%20Act%20-%20Lecture%20REV.pdf

Eramo, Lisa A. (March 2011). Stopping fraud: Detecting and preventing fraud in the e-Health Era. Journal of AHIMA 82, no.3. 28-30.

Justice.Gov (2015). False Claim Act Cases. Retrieved from http://www.justice.gov/sites/default/files/usao-edpa/legacy/2011/04/18/fcaprocess2_0.pdf