The False Claims Act and healthcare fraud settlements

Ethical and Legal Perspectives in Health Care

False Claims Act (FCA) was enacted during the Civil War to arrest frequent fraud against the United States government. An individual or a corporation that knowingly presents, or causes to be presented, a false claim of payment to the Federal Government can be prosecuted under this Act (WilmerHale, 2013). The FCA has a very broad scope. It is therefore imperative for any company doing business with the government to be very vigilant to guard against liabilities that come in the context of damages and penalties. A company is deemed to have violated FCA when it knowingly and materially misrepresents the nature of good or service that it provides to the government (WilmerHale, 2013). Misrepresentation can be in form of contractual language or other communications that leads to a government payment. A company can be prosecuted using this Act when it conspires to present a false claim to the government or causing a third party to submit a false claim. Companies can also incur reverse false claim liability when they improperly conceal, avoid, or decrease an obligation to pay the government. The origin of an FCA case is two-pronged. First, the United States itself can originate a case. Second, an FCA case can be filed through a private litigant who brings action on behalf of the United States government under the qui tam provision (WilmerHale, 2013). Private litigants are also called relators. A relator can receive 15 and 30% of any judgment or settlement in the government's favor (Sturycz, 2009). A suit originated by a relator remains under seal while the Department of Justice (DOJ) investigates the claim. The United States Department of Health and Human Services (HHS) in its resolve to implement Patient Protection and Affordable Care Act (PPACA), under the Center for Medicare and Medicaid Service came up with a regulation that required that all overpayments be reported and returned within sixty days of recovery, or by the date a cost report is due, if that date is later. Under PPACA, a person retaining an overpayment past this deadline faces FCA liability.

Student 2

Some of the latest developments in federal settlements, judgments, and complaints filed in the health care realms involve GlaxoSmithKline LLC. GlaxoSmithKline LLC agreed to pay $3 billion to resolve criminal and civil allegations that the company had unlawfully promoted certain prescription drugs, failed to report certain safety data to the FDA, and engaged in false price reporting practices in violation of the FCA (WilmerHale, 2013). GSK is alleged to have engaged in off-label promotion of certain drugs and payment of kick-backs to health care providers. GSK entered into a corporate integrity agreement (CIA) with the HHS OIG. Under this agreement GSK executives had to forfeit up to three years of annual performance pay if found to be involved in significant misconduct or aware of unreported employee violations. Another healthcare settlement involved Abbot Laboratories Inc. Abbot reached a $1.5 billion criminal and civil settlement with the federal government, 45 states, and the District of Columbia (WilmerHale, 2013). Abbot paid FCA civil damages amounting to $800 million to resolve allegations that the company promoted for off-label.

Part B

Student 2

The Healthcare Fraud and Abuse Control Program (HFAC) is enshrined in the section 1128c of the social security Act. This Act authorized the Health and Human Services and works through the office of the inspector general and the department of justice to ensure that the control and designs towards control of federal fraud and abuse are in place. This program is primarily meant for coordination of the federal, state and the local law enforcement programs with the aim of curbing fraud and abuse within the healthcare sector. They are also to conduct frequent audits, investigations in cases of lack of clarity, evaluations as well as thorough inspections with the ultimate aim of ensuring prompt and quality delivery of healthcare services to the citizens. This program is also meant for the enforcement of the healthcare abuse as well as fraud laws that are in place. They are also entrusted with issuing alerts ahead of time as well as advisory services and opinions in various circumstances. Once they have conducted conclusive investigations, this department is them charged with the responsibility of giving the final adverse actions that should be taken against a health care provider, professional or even supplier who is found culpable (American Medical Association, 2013).

Part C

The review of laws that address fraud and abuse especially the False Claims Act has made me appreciate the laws cuts across the board and also applies in the health care sector. I have also learnt to appreciate that a private litigant under the qui tam provision can bring an action against a perpetrator on behalf of the United States government. The relators otherwise known as whistleblowers in other quarters can receive 15 and 30% of any judgment or settlement in the government's favor. Regarding the fraud enforcement programs I have appreciated the critical role Health Care Fraud and Abuse Control (HFAC) Program plays in cracking down perpetrators who abuse the system that costs an average American tax payer billions of dollars.

References List

American Medical Association, (2013). Federal Fraud and Abuse Laws. Retrieved July 29, 2013

from http://www.ama-assn.org//ama/pub/physician-resources/legal-topics/regulatory-compliance-topics/health-care-fraud-abuse/federal-fraud-enforcement-physician-compliance/federal-fraud-abuse-laws.page

Department of Health and Human Services, HHS. (2009). The Department of Health and Human

and the Department of Justice Health Care Fraud and Abuse Control Program Annual

Report for Fiscal Year 2009. Retrieved from http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2011.pdf

Department of Health and Human Services, HHS. (2010). The Department of Health and Human

and the Department of Justice Health Care Fraud and Abuse Control Program Annual

Report for Fiscal Year 2010. Retrieved July 24, 2013 from http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2011.pdf

Department of Health and Human Services, HHS. (2011). The Department of Health and Human

and the Department of Justice Health Care Fraud and Abuse Control Program Annual

Report for Fiscal Year 2011. Retrieved July 24, 2013 from http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2011.pdf

Sturycz, N.D. (2009). The King and I: An Examination of the Interest Qui Tam Relators

Represent and the Implications for Future False Claims Act Litigation, 28 St. Louis Pub.

L. Rev. 459 (2009). Retrieved July 24, 2013 from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537749

WilmerHale. (2013). False Claims Act: 2012-Year-in-Review. Retrieved July 24, 2013 from http://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/WH_P

ublications/Client_Alert_PDfs/FCA%20YearInReview%202012.pdf