COMPLIANCE POLICY
WellLife Network
POLICY PURSUANT TO THE FEDERAL DEFICIT
REDUCTION ACT OF 2005:
Detection and Prevention of Fraud, Waste and
Abuse and Applicable Federal and State Laws
To anonymously report an issue or complaint, please email:
CorporateCompliance@welllifenetwork.org
Compliance Hotline: 1-866-713-2331
Policy
The WellLife Network, Inc. ("WellLife Network") prohibits the knowing submission of a false or fraudulent claim for payment to a federal or New York State funded health care program. Such a submission is a violation of federal and New York State law and can result in significant administrative and civil penalties under the federal False Claims Act, a federal statute that allows private citizens to help reduce fraud against the United States government. In addition, in New York State, the submission of a false claim can result in civil and criminal penalties under portions of the New York State Finance Law, Social Services Law, and Penal Law, among other New York State statutes.
The WellLife Network is committed to complying with the requirements of Section 6032 of the federal Deficit Reduction Act of 2005 (Employee Education About False Claims Recovery) and to preventing and detecting any fraud, waste, or abuse in its organization. To this end, WellLife Network maintains a Compliance Program, which includes a detailed Compliance Plan and associated compliance policies and standards. Statements regarding legal and ethical conduct, training, detection, communication, and prevention can be found in the Compliance Plan and associated compliance policies and standards.
As part of its Compliance Program, WellLife Network has adopted this Policy, which among other things, includes detailed information on the federal False Claims provisions, New York State False Claims provisions, their remedies, and their whistleblower provisions and protections. The Compliance Officer is responsible for the distribution of this Policy to all WellLife Network employees and Contractors (as such term is defined in paragraph 4, below), and maintaining a record of signed acknowledgements of the receipt of this Policy from all WellLife Network employees and Contractors. This Policy is also a part of the Corporate Compliance Handbook.
The WellLife Network contractors and agents subject to this Policy (referred to in this Policy as "Contractors") are those that perform billing and coding functions on behalf of WellLife Network, and those which or who, on behalf of WellLife Network, furnish or otherwise authorize the furnishing of health care items or services or are involved in monitoring health care provided by WellLife Network.
Each WellLife Network employee must abide by this Policy. Each Contractor must abide by the Policy as to the work the Contractor performs for WellLife Network , in addition to making the Policy available to the Contractor's employees involved in performing that work.
All WellLife Network employees and Contractors that reasonably suspect or are aware of the preparation or submission of a false claim or report or any other potential fraud, waste, or abuse related to a federal or New York State funded health care program are required to report such information to the appropriate WellLife Network supervisor or to WellLife Network's Compliance Officer. The Compliance Officer may be reached by e-mail at CorporateCompliance@welllifenetwork.org. Any employee or Contractor who reports such information will have the right and opportunity to do so anonymously, and will be protected against retaliation for coming forward with such information both under WellLife Network 's internal compliance policies and procedures and under applicable federal and New York State laws. (See below for summary descriptions of the federal and state laws that protect whistleblowers against retaliation.) Reportable issues might include, for example, cases where WellLife Network is billing for services that (a) were not actually provided (services that did not occur or are improperly coded); (b) were medically unnecessary; or (c) were provided in a significantly substandard manner. Failure to report and disclose or assist in an investigation of fraud and abuse is a breach of the obligation of the employee or Contractor to WellLife Network and may result in disciplinary action.
The Compliance Officer is responsible for WellLife Network employees and Contractors receiving training on federal and New York State false claims laws, and other training as necessary and appropriate to educate WellLife Network community so that they may detect, prevent and report suspected incidents of fraud, waste and abuse.
As an organization, the WellLife Network commits itself to investigate any suspicions of fraud, waste, or abuse swiftly and thoroughly and requires all employees and Contractors to assist in such investigations. If an employee or Contractor believes that WellLife Network is not responding to his or her report within a reasonable period of time, the employee or Contractor shall bring these concerns about WellLife Network's perceived inaction to WellLife Network's Compliance Officer.
Please contact the Compliance Officer with any questions regarding the Compliance Program or this Policy.
A Description of the Federal False Claims Act and Federal and State Laws Pertaining to Civil or Criminal Penalties for False Claims and Statements:
The Federal False Claims Act
The federal False Claims Act establishes liability for any person who engages in certain acts, including:
• Knowingly presenting or causing to be presented a false or fraudulent claim to the federal government for payment;
• Knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paid by the federal government;
• Conspiring to defraud the federal government by getting a false or fraudulent claim allowed or paid; or
• Knowingly making, using or causing to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the federal government.
(31 U.S.C. § 3729). Under the federal False Claims Act, a person acts "knowingly" if he or she:
• Has actual knowledge of the information;
• Acts in deliberate ignorance of the truth or falsity of the information; or
• Acts in reckless disregard of the truth or falsity of the information.
There is no requirement that the person specifically intend to defraud the government through his or her actions, or had actual knowledge that the claim was false. (31 U.S.C. § 3729(b)).
Under the federal False Claims Act, a "claim" is any request or demand for money or property if the federal government provides any portion of the money or property in question. This includes requests or demands submitted to a contractor of the government, and includes Medicaid claims. (31 U.S.C. § 3729(c)).
In summary, the federal False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicaid for medical services she knows she has not provided. The federal False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits records that he knows (or should know) are false and that indicate compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called "reverse false claim" may include a hospital that obtains interim payments from Medicare throughout the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.
A violation of the federal False Claims Act results in a civil penalty between $5,500 and $11,000 for each false claim submitted, plus up to three times the amount of the damages sustained by the government because of the violation. (31 U.S.C. § 3729). In addition to being liable for damages and civil penalties, violating the federal False Claims Act can subject a person or entity to exclusion from participation in federal health care programs, such as Medicare and Medicaid. (42 U.S.C. § 1320a-7a(a)).
The federal False Claims Act allows a private person to bring an enforcement action on behalf of the United States. (31 U.S.C. 3730 (b)). These private persons, known as "qui tam relators" or "whistleblowers," may share in a percentage of the proceeds from a federal False Claim Act action or settlement. (31 U.S.C. § 3730(d)(1)). The federal False Claims Act provides, with some exceptions, that a whistleblower, when the Government has intervened in the lawsuit, shall receive at least 15% but not more than 25 % of the proceeds of the federal False Claims Act action, depending upon the extent to which the whistleblower substantially contributed to the prosecution of the action. When the Government does not intervene, the federal False Claims Act provides that the whistleblower shall receive an amount that the court decides is reasonable and shall be not less than 25% and not more than 30%. (31 U.S.C. § 3730(d)(2)). Whistleblower recoveries can be very high; however, if a whistleblower brings a case that is clearly frivolous or brought primarily for purposes of harassment, the whistleblower may be required to pay the defendant's reasonable attorneys' fees and expenses. (31 U.S.C. § 3730(d)(4)).
The False Claims Act provides protection to whistleblowers who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the federal False Claims Act. (31 U.S.C. 3730(h)). Remedies include reinstatement with comparable seniority as the whistleblower would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.
A Description of the Federal Program Fraud Civil Remedies Act
The Program Fraud Civil Remedies Act (31 U.S.C. §§ 3801-3812) (the "PFCRA") resembles the federal False Claims Act in that it targets persons who make or present (or cause to be made or presented) claims or statements for payment from the federal government that such persons know or have reason to know are false, fictitious, or fraudulent. The PFCRA focuses on certain federal agencies, including, among others, the Department of Health and Human Services ("HHS"), the federal agency that oversees Medicaid claims. The PFCRA establishes an administrative hearing and remedy that is in the first instance administered by the applicable federal agency, subject to limited court review. In contrast, cases involving the federal False Claims Act are heard and determined by the courts.
Similar to the federal False Claims Act, the PCFRA provides that a person "knows or has reason to know" if the person:
• Has actual knowledge of the information;
• Acts in deliberate ignorance of the truth or falsity of the information; or
• Acts in reckless disregard of the truth or falsity of the information.
As with the federal False Claims Act, there is no necessary proof of specific intent to defraud the government.
A violation of the PCFRA results in a civil monetary penalty of up to $5,500 per false claim and an assessment of twice the amount of the false claim.
Although private individuals may report suspected violations of the PFCRA to the government, unlike the federal False Claims Act the PCFRA does not provide that whistleblowers may share in amounts recovered from defendants.
New York False Claims Act
The New York False Claims Act (NY State Finance Law §§ 187-194) is substantially similar to the federal False Claims Act discussed above. Like the federal law, the New York law imposes liability for, among other things: knowingly submitting (or causing to be submitted) a false claim to the government for payment; knowingly making, using or causing to be made or used a false record or statement to get a false claim paid by the government; conspiring to defraud the government by getting a false claim allowed or paid; and knowingly making, using or causing to be made or used a false record or statement to conceal or avoid an obligation to pay government. (NY State Finance Law § 189(1)). The New York False Claims Act, however, imposes liability for claims submitted to New York State or to a local government and not for claims submitted to the federal government.
The term "knowingly" is defined in substantially the same way in the New York law as it is under federal law. (NY State Finance Law § 188(3)).
Both the Attorney General and local governments may bring actions to enforce the New York False Claims Act. (NY State Finance Law § 190(1)). The penalties for violating the statute range from $6,000 to $12,000 for each false claim (as opposed to $5,500 to $11,000 per claim under federal law) and up to three times the amount of actual damages sustained by New York State or local government as a result of the prohibited conduct. (NY State Finance Law § 189(1)).
Like the federal law, the New York False Claims Act authorizes private parties to file a lawsuit in the name of New York State or local government and allows for private parties bringing such actions to receive up to 30% of any monetary recovery, plus reasonable attorneys' fees and costs. (NY State Finance Law § 190(2)&(6)). In addition, as under the federal False Claims Act, persons who file cases under the New York False Claims Act are provided certain protections against retaliation for bringing a good faith action including reinstatement with comparable seniority and fringe benefits, double back pay plus interest, and/or compensation for any special damages such as reasonable attorneys' fees. (NY State Finance Law § 191).
Medicaid False Claims Act - Civil Penalties
Under New York Social Services Law § 145-b, it is unlawful to knowingly make a false statement or representation, or to deliberately conceal any material fact, or engage in any other fraudulent scheme or device, to obtain or attempt to obtain payments under the New York State Medicaid program. For a violation of this law, the local social services district or New York State has a right to recover civil damages equal to three times the amount by which any figure is falsely overstated. In the case of non-monetary false statements, the local social services district or New York State may recover three times the damages (or $5,000, whichever is greater) sustained by the government due to the violation.
New York Social Services Law § 145-b also empowers the New York State Department of Health to impose a monetary penalty on any person who, among other actions, causes Medicaid payments to be made if the person knew or had reason to know that:
• the payment involved care, services, or supplies that were medically improper, unnecessary, or excessive;
• the care, services or supplies were not provided as claimed;
• the person who ordered or prescribed the improper, unnecessary, or excessive care, services, or supplies was suspended or excluded from the Medicaid program at the time the care, services, or supplies were furnished; or
• the services or supplies were not in fact provided.
The monetary penalty under New York Social Services Law § 145-b shall not exceed $2,000 for each item or service in question, unless a penalty under the section has been imposed within the previous five years, in which case the penalty shall not exceed $7500 per item or service.
Under the New York Social Services Law § 145-c, if any person individually or as a member of a family applies for or receives public assistance, including Medicaid, by intentionally making a false or misleading statement, or intending to do so, then the needs of that person shall not be taken into account for determining the needs of that person or those of his or her family: (i) for a period of 6 months if a first offense; (ii) for a period of 12 months if a second offense, or upon an offense which resulted in the wrongful receipt of benefits in an amount of between $1,000 and $3,900; and (iii) for a period of 18 months if a third offense or upon an offense which resulted in the wrongful receipt of benefits in excess of $3,900, and 5 years for any subsequent occasion of any such offense.
Medicaid False Claims Act - Criminal Penalties
New York Social Services Law § 366-b provides that it is a crime to:
• present any false or fraudulent claim for furnishing services or merchandise with intent to defraud;
• knowingly submit false information to obtain greater compensation for furnishing services or merchandise; or
• knowingly submit false information to obtain authorization for furnishing services or merchandise.
Each of these acts is punishable by fines and by imprisonment for up to one year. An act that violates both New York Social Services Law § 366-b and a provision of New York Penal Law will be punished with the potentially harsher penalties fixed by New York Penal Law (see below).
New York Social Services Law § 145 provides that it is a crime for any person to submit false statements or deliberately conceal material information to receive public assistance, including Medicaid. This crime is punishable by fines and by imprisonment for up to one year. An act that violates both New York Social Services Law § 145 and a provision of the New York Penal Law will be punished with the potentially harsher penalties fixed by the New York Penal Law (see below).
New York Penal Law
New York Penal Law Article 177 establishes the crime of health care fraud. An individual or entity commits this crime when, with the intent to defraud Medicaid (or other health plans, including non-governmental plans), the individual or entity knowingly and willfully provides materially false information or omits material information for the purpose of requesting payment for a health care item or service and, as a result of the false information or omission, a payment is made from the health plan to which the recipient is not entitled. Health care fraud is punishable with fines and imprisonment based on the amount of payment inappropriately received due to the commission of the crime; the higher the payments in a one-year period, the more severe the punishments, which currently range up to 25 years of imprisonment if more than $1 million in improper payments are involved.
New York Penal Law Article 155 establishes the crime of larceny. A person commits this crime if, with the intent to deprive another of property, he obtains, takes or withholds the property by means of trick, embezzlement, false pretense or false promise, including a scheme to defraud, or other similar behavior. This crime has been applied to Medicaid fraud cases. Larceny is punishable with fines and imprisonment based on the amount of payment inappropriately received through the commission of the crime; the higher the value of the property, the more severe the punishments, which currently range up to 25 years of imprisonment if the property involved is valued in excess of $1 million.
New York Penal Law Article 175 establishes crimes involving false written statements. Article 175 has been applied to Medicaid fraud cases with respect to crimes where a person, with intent to defraud, falsifies business records or provides false statements or claims to public agencies. (New York Penal Law §§ 175.05, 175.10, 175.30 and 175.35.) These crimes are punishable with fines and with imprisonment for up to four years.
New York Penal Law Article 176 establishes the crime of insurance fraud. A person commits this crime by, among other things, knowingly, and with intent to defraud, presenting false claims for insurance payment to a public or private health insurer, including Medicaid. Insurance fraud is punishable with fines and with imprisonment based on the amount of the insurance payment inappropriately received; the higher the amount, the more severe the punishments, which currently range up to 25 years of imprisonment if more than $1 million in improper payments are involved.
Whistleblower Law
New York Labor Law Article 20-C, "Retaliatory Action by Employers," affords protections to employees who may notice and report inappropriate activities. Under this Article, which contains New York Labor Law §§ 740-741, an employer may not take any retaliatory personnel action against an employee because the employee:
• discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety, or constitutes the crime of health care fraud, or that the employee reasonably believes, in good faith, constitutes improper quality of patient care;
• provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any such violation of a law, rule or regulation by such employer; or
• objects to, or refuses to participate in any such activity, policy or practice in violation of a law, rule or regulation.
(NY Labor Law §§ 740(2) & 741(2)).
The law defines "improper quality of patient care" as a practice, action, or failure to act of an employer which violates law and which relates to matters which may present a substantial and specific danger to public health or safety or a significant threat to the health of a specific patient. (NY Labor Law § 741(1)(d)).
To bring an action under New York Labor Law § 740, the employee must first bring the alleged violation to the attention of the employer and give the employer a reasonable opportunity to correct the allegedly unlawful practice. (NY Labor Law §§ 740(3)) & 741(3)). However, there is no requirement to first notify the employer if the issue involves improper quality of patient care, as defined above, and presents an imminent threat to public health or safety or to the health of a specific patient, and the whistleblower reasonably believes in good faith that reporting to a supervisor would not result in corrective action. (NY Labor Law § 741(3)).
The law allows employees who are the subject of a retaliatory action to bring a civil action in court seeking relief such as an injunction prohibiting continued retaliation; reinstatement, back-pay and compensation of reasonable costs. (NY Labor Law § 740(4)& (5)). In addition, if an employer retaliates in bad faith against an employee whistleblower, and if the employee's complaint concerned the improper quality of patient care, the employer may be subject to civil penalty of an amount not to exceed $10,000, which is paid to a New York State fund devoted to improving the quality of patient care. (NY Labor Law § 740(4)(d)). The law also provides that employees who bring an action without basis in law or fact may be held liable to the employer for its attorney's fees and costs. (NY Labor Law § 740(6)).
