A Florida hospital system has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by knowingly causing its subsidiaries to offer discounts to patients to induce them to purchase or refer services reimbursed by federal healthcare programs. In connection with the settlement, the United States acknowledged that the hospital system took significant steps entitling it to credit for cooperating with the government’s investigation.
According to the government’s allegations, the hospital system’s subsidiaries provided discounts of up to 50 percent or more on patient cost sharing obligation balances for certain categories of Medicare beneficiaries. These were chosen by the hospital system, without regard to any financial need consideration, during the period from Jan. 1, 2016, through Aug. 15, 2022. The subsidiaries allegedly provided these discounts in exchange for the beneficiaries’ purchase or referral of services by certain categories of Medicare beneficiaries from the subsidiaries.
The hospital system voluntarily self-disclosed this conduct to the United States. In addition, it cooperated with the government’s investigation and took remedial measures, including discontinuing its discount policy, conducting an internal compliance review, and providing the United States with a detailed disclosure statement and other supplemental information to assist with the investigation.
“The department will continue to rely on the False Claims Act to address the use of prohibited remuneration to induce federal healthcare business,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We encourage providers to mitigate the consequences of prior improper conduct by making timely self-disclosures, cooperating with our investigations and adopting enhanced compliance procedures.”
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits parties who participate in federal healthcare programs from knowingly and willfully paying or receiving any remuneration in return for referring an individual to, or arranging for the furnishing of, any item or services for which payment is made by the federal healthcare programs. Discovery of fraud, waste, or abuse of government funds should be immediately investigated, addressed, and, in collaboration with your compliance attorney, reported using the self-disclosure protocols. Healthcare providers, suppliers, or other individuals or entities subject to Civil Monetary Penalties can use the Office of Inspector General’s (OIG) Self-Disclosure Protocol to voluntarily disclose self-discovered evidence of potential fraud. Self-disclosure gives providers the opportunity to avoid the costs and disruptions associated with a government-directed investigation and civil or administrative litigation.
Discussion Points
- Review policies and procedures for operating an effective compliance and ethics program and for preventing and reporting a false claim or anti-kickback statute violation. Update as needed.
- Train all staff on the False Claims Act and Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the training occurred and place in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of their responsibility to identify compliance and ethics concerns and to promptly report violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
