CONEMAUGH HEALTH SYSTEM

Memorial Medical Center

ORGANIZATIONAL POLICY MANUAL

 

 

STATEMENT OF POLICY

It is the policy of the Conemaugh Health System (CHS) / Memorial Medical Center (MMC) to adhere to all applicable state and federal laws and regulations regarding the submission of claims to state and federal health care programs, including, but not limited to, the federal False Claims Act (the “FCA”). Consistent with this policy, MMC monitors claims for correctness in order to avoid submission of false or misleading claims, identifies any systemic errors, and establishes corrective action plans to rectify error findings.  It also fully cooperates with governmental authorities in the investigation of any alleged false claim and adheres fully to the provisions of the FCA that protect whistleblowers (described below).

 

PURPOSE

It is the policy of CHS/MMC to be fully compliant with the requirements and provisions of the Deficit Reduction Act (“DRA”), which is applicable as of January 1, 2007 to entities that receive more than 5 million dollars in annual payments from a State Medicaid Plan. 

 

The purpose of this policy is to comply with the DRA by providing detailed information, either directly or through reference to other sources, about (1) the FCA; (2) federal penalties under the FCA and administrative remedies for false claims and statements; (3) whistleblower protections; and (4) any State laws pertaining to civil or criminal penalties for false claims and statements. 

 

SCOPE

This policy applies to all CHS/MMC employees and all affiliated or subsidiary organizations involved with the submission of claims to state and federal health care programs.  Additionally, this policy applies to all vendors, contractors and other agents that have business relationships with CHS/MMC and its affiliates or subsidiary organizations.  In order to maintain a business relationship, all vendors, contractors and other agents are required to comply with principles of federal and state laws as well as certain policies governing business conduct.

 

FEDERAL FALSE CLAIMS ACT, PENALTIES AND WHISTLEBLOWER PROTECTIONS

The Federal False Claims Act (FCA)

The FCA (Sections 3729 through 3733 of Title 31 of the United States Code) is an anti-fraud law enacted in 1863 that establishes liability to the United States Government for certain acts if proven by a preponderance of the evidence. 

 

There are seven specific acts prohibited by the FCA; those most commonly relied upon include:

• Knowingly presenting or causing to be presented a false or fraudulent claim for payment or approval to the United States Government;
• Knowingly making or using (or causing the making or use of) a false record or statement to get a false or fraudulent claim paid;
• Conspiring to defraud the Government by getting a false or fraudulent claim paid;
• Knowingly making or using (or causing to be made or used) a false record or statement to conceal, avoid or decrease an obligation to the Government.

The FCA defines “knowingly” to mean not only actual knowledge of the truth or falsity of relevant information, but also either deliberate ignorance or reckless disregard for the information’s truth or falsity.

 

The FCA defines “claim” to include any request or demand for payment of money that is made to a contractor, grantee, or other recipient if the U.S. Government provides any portion of the money or property that is requested or demanded, or if the Government will reimburse the contractor, grantee, or other recipient for the money or property.

 

Penalties Under the FCA

Health care providers and suppliers (persons and organizations) who violate the FCA, can be subject to a civil monetary penalty ranging from $5,500 to $11,000 (as amended) for each false claim submitted.  In addition to this civil penalty, providers and suppliers can be required to pay three times the amount of damages that the Government sustains.  If a provider or supplier is convicted of a FCA violation, the Office of Inspector General (OIG) may seek to exclude the provider or supplier from participation in federal health care programs.

 

Administrative Remedies for False Claims and Statements

The Program Fraud Civil Remedies Act (“PFCRA”) (Chapter 38 of Title 31 of the United States Code) was enacted in 1986 to allow federal departments and agencies, including the United States Department of Health and Human Services (“HSS”), to pursue administrative actions against individuals or organizations who knowingly submit false, fictitious or fraudulent claims or statements for benefits or payments under a federal agency program.  Under the PFCRA, the United States can obtain an assessment, in lieu of damages, of twice the amount of the false claim and a penalty of up to $5,000 for each false claim submitted.  These remedies are in addition to any other remedy prescribed by law.  The “knowingly” element of this Act is defined in the same way that it is under the FCA.  Deliberate ignorance or reckless disregard for the truth or falsity of the claim or statement is sufficient; actual knowledge does not have to be established.    

 

FCA’s Whistleblower Provisions

The FCA permits both the Government and private citizens to bring a civil action for violations of its liability provisions.  When a private citizen, or “whistleblower”, brings such an action, it is brought in the name of the United States and the lawsuit is filed “under seal”, or in secret.  The defendant or person being sued is not notified of the suit and does not receive a copy.

 

At the time the suit is filed, the whistleblower must serve the lawsuit on the Government along with a written disclosure of substantially all material evidence of which the whistleblower is aware.  The seal remains in place for 60 days (with possible extensions) while the Government investigates the allegations and decides whether to intervene, i.e. to become involved in the prosecution of the case.  The defendant is served with the suit when the seal is lifted.

 

If the government decides to intervene, it has primary responsibility for prosecution of the action, but the whistleblower shall continue to participate and may, with some limitations, continue to play an active role in the litigation.  Most important, the whistleblower may object to any proposed settlement between the Government and the defendant and have the settlement reviewed through court hearing.  If the Government decides not to intervene, the whistleblower is entitled to proceed with the case with his or her own attorney, although the United States continues to be the actual plaintiff.

 

In the event of a successful recovery, the whistleblower is entitled to receive a percentage of such recovery in an amount depending, in part, upon the government’s decision to intervene, as well as reimbursement for reasonable attorneys’ fees and expenses.

 

Employment Protections for Whistleblowers and Other Employees

In addition to a financial award, the FCA entitles whistleblowers to additional relief if the whistleblower has been retaliated against for filing an action under the FCA or committing other lawful acts, such as investigating a false claim or providing testimony for, or assistance in, a FCA action.  Such relief includes employment reinstatement, two times the amount of back pay and compensation for special damages including litigation costs and reasonable attorneys’ fees.

 

In addition to the protections afforded to employees under the FCA, CHS prohibits any retaliation against employees who report wrongdoing, including suspected violations of the FCA. CHS’s Problem Reporting and Non-Retaliation policy pertains to all its Member organizations, and can be found on the organization’s intranet site to which all employees have access.

 

Certain Whistleblower Actions Barred

A whistleblower may not bring an action that is based upon the public disclosures of allegations in a criminal, civil or administrative hearing; in a congressional, administrative or GAO report, hearing, audit, or investigation; or from news media – unless the whistleblower is an “original source.”  An original source means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided this information to the Government before filing an action.

 

STATE LAWS PERTAINING TO CIVIL OR CRIMINAL PENALTIES FOR FALSE CLAIMS AND STATEMENTS

House Bill No. 2994 (The General Assembly of Pennsylvania, Session of 2006)

 

Proposed:        Referred to Committee on Judiciary, October 4, 2006.

 

Short Title:      False Claims Act

 

Purpose:  Providing for liability for false claims, treble damages, costs and civil penalties, powers of the Attorney General, qui tam actions and for adoption of legislative history of the Federal False Claims Act; establishing the Office of Inspector General and providing for its functions; transferring functions from the Office of General Counsel to the Office of Inspector General; and transferring functions, personnel and resources from the Office of State Inspector General to the Office of Inspector General.

 

Upon adoption, this policy will be reviewed and amended as necessary.

 

PREVENTING AND DETECTING FRAUD, WASTE AND ABUSE

 

CHS/MMC Policies

CHS/MMC policies and procedures regarding proper business conduct and ethics address expectations that employees behave in such a manner as not to engage themselves or CHS/MMC in fraudulent activities.

 

1.      Code of Conduct

CHS/MMC has established a Code of Conduct applicable to all employees. It is the policy of CHS/MMC to conduct its business in compliance with all applicable ethical, legal and regulatory standards. To this end, all employees, physicians and Board members are expected to follow the Code of Conduct. The Code of Conduct can be found on the organization’s intranet site and is distributed annually to all employees including volunteers, physicians, agency & temporary staff.

 

2.      Code of Ethics

CHS/MMC has established a Code of Ethics to guide the behavior of all employees. High standards of ethical conduct are a key factor in the provision of care and in continued success as a healthcare institution. The Code of Ethics is meant to serve as a guide to behavior and not a substitute for an employee's own personal integrity and good judgment. The Code of Ethics can be found on the organization’s intranet site to which all employees have access.

 

3.      Conflict and Duality of Interest Policy

CHS/MMC has established a Conflict and Duality of Interest Policy to protect the interests of CHS and each of its affiliated corporations in transactions or arrangements that may also benefit the private interests of an officer, director, or other individual employed or serving within the System.  The policy is intended only to supplement and not replace applicable state laws governing conflicts or dualities of interest as they apply to non-profit and charitable organizations.  The Conflict and Duality of Interest Policy can be found on the organization’s intranet site to which all employees have access.

 

Internal Audit and Corporate Compliance Departments

The Internal Audit and Corporate Compliance Departments assist the management of CHS and its affiliates in achieving the most efficient administration of the operation of the overall Health System.  The objective includes informing executive management of existing deficiencies as a basis for corrective action and making recommendations for improvements in the various phases of the operation.

 

The attainment of this overall objective involves:

• Compliance with all applicable federal and state laws and regulations;
• Compliance with the requirements of external agencies, such as Joint Commission and third party payers;
• Compliance with CHS policies and procedures;
• Safeguarding assets against error or fraud;
• Reviewing/appraising the soundness, adequacy, and application of accounting, financial and other operating controls and providing recommendations for correcting identified errors.

 

For additional information, refer to the Internal Audit and Compliance Services Department Charter and related policies.

 

REPORTING FALSE CLAIMS

To report a suspected violation, employees or other individuals can contact any of the following:

• Supervisor, Manager, Director, Senior Leader, Physician Leader or Executive Staff
•  Human Resources Department
• Corporate Compliance Officer
• Ethics and Compliance Employee Hotline (1-800-500-0333)
• Anonymous Email anonymous@conemaugh.org

 

RESPONSIBILITY

The Corporate Compliance Officer and the Corporate Compliance Coordinators are responsible for the implementation of this policy.  Managers are responsible for ensuring implementation in their areas of responsibility.

 

RELATED POLICIES

Code of Conduct

Code of Ethics

Compliance Office and Legal Counsel  

Conflict and Duality of Interest  

Corporate Compliance

Problem Reporting and Non-Retaliation

 

APPROVALS

CHS Audit and Compliance Committee

CHS Board of Directors

 

SIGNATURE

 

____________________________

Scott Becker

CEO

 

ORIGINAL POLICY DATED:         10/2007

REVIEWED / REVISED:                  NA

NEXT REVIEW DATE:                    10/2010