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Ileana Hernandez of Manatt Discusses What Healthcare Providers Should Know About the False Claims Act

As a healthcare provider, there are specific federal and state laws that you should know about. According to Ileana Hernandez of Manatt’s healthcare litigation practice, the False Claims Act is one crucial law. We spoke to her about what healthcare providers should know about this law and its whistleblower provisions.

The False Claims Act is all about uncovering fraud against the United States government. When a whistleblower files a claim under this law, they must have discovered that someone is committing Medicare or Medicaid fraud or other violations of federal health care programs.

Whistleblowers can be any person who provides information to the Department of Justice related to these types of claims involving public funds. Whistleblowers are entitled to 15-30% of the total amount recovered at the end through a settlement or after trial.

If your company is accused of fraud by any individual, Hernandez recommends that you work with an attorney as soon as possible. “I think healthcare providers must contact defense counsel right away,” she advised. “This is particularly important in False Claims Act cases because the Department of Justice has a very limited time to investigate and decide whether or not to intervene.”

For example, suppose you become aware that your company is under investigation for potential fraud. In that case, it’s essential to work with an attorney who can guide you through the process and explain what you can do to defend against the allegations.

“I have had a lot of clients contact me even before there is a subpoena,” said Hernandez, “just because they want advice on how to proceed.”

If your company is notified that it’s about to be sued, your attorney will need time. So if you discover you are under investigation, the best thing to do is contact an attorney as soon as possible.

If a whistleblower files a False Claims Act case, they must show that you submitted a false claim under the federal health care programs and that this claim was knowingly or intentionally false when it was submitted. Healthcare providers must understand that these cases can go on for a long time and that it can take several years before you know precisely what the allegations are.

Healthcare providers need to make sure their company has sound compliance policies in place. That means having procedures in place to ensure that every claim submitted by your business is accurate and paid appropriately, says Hernandez. “Look at your payor mixes; find out if there are any incorrect payor codes, and make sure you conduct regular audits to ensure compliance.”

If you discover that your company has made an error, this should be handled through internal compliance policies. The False Claims Act is not meant for claims that are simply clerical mistakes or innocent errors. “It’s when you know something isn’t right, but you submit the claim anyway that can get you into trouble,” Hernandez warned.

In addition to keeping up with your compliance policies, it’s important to train employees in a way they will understand so they can identify when something is out of order and how it should be corrected or when a claim should not be submitted at all.

In closing, Hernandez said, “We are very fortunate in this country to have people who are willing to speak out when they believe others are committing fraud against the United States government. The False Claims Act is there to protect them, and healthcare providers must understand both that law and how it works.”