The James Lawrence Kernan Hospital ("Kernan"), is required by federal
law to provide information to all of its employees, contractors and agents
regarding the federal false claims act, administrative remedies for false claims
and statements, the state false claims act and whistleblower protections under
these laws. The federal and state false claims acts play an important role in
detecting fraud, waste and abuse in federal health care programs.
Federal False Claims Act
What the law does:
The law allows a civil action to be brought against a health care provider that:
- Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval to any federal employee;
- Knowingly makes, uses or causes to be made or used a false record or statement to get a false or fraudulent claim paid; or
- Conspires to defraud the government by getting a false or fraudulent claim allowed or paid
Examples of a false claim:
- Billing for procedures not performed
- Violating another law, for example submitting an appropriate claim, but the service itself resulted from an inappropriate arrangement between a physician and a hospital (e.g., physician received a kickback for referring patients to Kernan)
- Falsifying information in the medical record
- Billing more than once for the same service
- A federal false claims action may be brought by the U.S Department of Justice.
- An individual may bring a "qui tam" action. This means the individual
files an action on behalf of the government.
- Violation of the federal False Claims Act is punishable by a civil penalty
of between $5,500 and $11,000 per false claim, plus three times the amount
of damages incurred by the government.
- A statute of limitations indicates how much time may pass before an action may no longer be brought for violation of the law. Under the False Claims Act, the statute of limitations is six years after the date of violation or three years after the date when material facts are known or should have been known by the government, but no later than ten years after the date on which the violation was committed.
Federal Whistleblower Protections
Federal law prohibits an employer from retaliating against an employee in the terms or conditions of employment because the employee initiated or otherwise assisted in a false claims action. The employee is entitled to all relief necessary to make the employee whole.
Maryland False Claims Provisions
Maryland, like many other states, has enacted a statute similar to the federal False Claims Act that provides for criminal and civil remedies for the submission of false and fraudulent claims to the Medicaid program. Under Maryland's Medicaid fraud statute, it is a crime for a person to knowingly and willfully:
- Defraud or attempt to defraud the Medicaid program in connection with the
delivery of or payment for a health care service, or
- Obtain or attempt to obtain by means of a false representation anything of value in connection with the delivery of or payment for a health care service through the Medicaid program
Examples of false representations include:
- Knowingly and willfully concealing, falsifying or omitting a material fact
- Knowingly and willfully making a material false or fraudulent statement
- Knowingly and willfully using a document that contains a statement of material
fact that the user knows to be false or fraudulent
Maryland Whistleblower Protections
Maryland law prohibits retaliatory action by an employer against an employee who in good faith reports:
- Any potential violation of state or federal law by an employer as a health
care provider; or
- Any situation where an employer provides care in a manner that violates
state or federal standards or laws or recognized clinical or ethical standards.
Kernan's Policies & Procedures for Detecting and Preventing Fraud & Abuse
Kernan has processes in place that support the detection and prevention of fraud and abuse:
- Kernan uses outside vendors to validate and confirm the accuracy of the APR-DRG
assigned by the Health Information Management Department and the content of
documentation to support those charges billed can be supported with documentation
in the medical record. One vendor validates the accuracy of the APR-DRG assignment,
and another vendor validates the supporting documentation, which can be found
in the medical record
- The University of Maryland Medical System's Internal Audit Group evaluates
and validates, at the transaction level, the accuracy of charging, adjustments,
write-offs, cash posting, billing and supporting documentation for services
rendered in the medical record
- Annually, an external auditor tests the accuracy of reporting by Kernan's
patient financial services operations to make sure the appropriate checks
and balances are adhered to in each phase of the department's operations and
to make recommendations to protect Kernan's accounts receivable asset
- The Patient Financial Services Department employs individuals with clinical
backgrounds to perform charge retroactive audits
- Kernan uses billing compliance software that checks to make sure that the appropriate procedural coding and services being billed are aligned with the patient diagnosis that has been assigned
What you should do if you think Kernan may have made a false claim?
If you, as an employee or a contractor/agent, have a concern about any of Kernan's billing practices, Kernan encourages you to:
- Report the information to a supervisor for further investigation.
- If you are not comfortable reporting the information in this manner or do
not see action in response to an earlier report, please contact Kernan's Compliance
Office at 1-877-300-DUTY (3889) or logon to www.reportit.net
to submit an electronic report to Kernan's Compliance Office.
You are not required to report a possible false claims act violation to Kernan first. You may report directly to the federal Department of Justice.
If you have any questions about this information, please call Kernan's Compliance Department at 410 328-3848.
You can find additional information about the False Claims Act at:
- This information is being provided in compliance with the federal Deficit Reduction Act of 2005.