Careful Investigation of Internal Complaints May Reduce Fraud Exposure

July 11, 2011Articles Becker's Hospital Review

An employee walks into your office complaining of improprieties concerning claims your hospital submitted to the government. Your initial reaction is the allegations are meritless, and you are inclined to simply ignore them. However, this response could prove dangerous and extremely costly.

Statutes such as the False Claims Act permit a private individual to file suit on behalf of the United States against a person or company that has allegedly submitted false claims to the United States. Every year there are billions of dollars in settlements and judgments in cases involving purported fraud against the government. A defendant in such a lawsuit can be liable for three times the damages sustained by the government as well as for penalties ranging from $5,500 and $11,000 for each false claim in addition to attorneys' fees and costs for the opposition. Furthermore, many senior executives now find themselves being targeted individually in these cases.

Enforcement efforts are ramping up regionally and nationally. In a program held this past April in the Western District of Pennsylvania, the newly appointed U.S. Attorney took the unusual step to declare his jurisdiction was "open for business" for healthcare qui tam cases. Six regional fraud prevention summits have been held since June 2010. The Affordable Care Act allocated an additional $350 million to fraud enforcement over 10 years and established the Health Care Fraud Prevention and Enforcement Action Team, cleverly dubbed "HEAT." Medicare Fraud Strike Force operations have expanded from their beginnings in South Florida and Los Angeles to a total of nine healthcare fraud hot spots across the country.

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