False Claims ActFalse Claims Act and Whistleblower and Whistleblower

ProtectionsProtections

False Claims ActFalse Claims Act and Whistleblower and Whistleblower

ProtectionsProtectionsGenetic Disease Screening Genetic Disease Screening

ProgramProgram

Employee Education and TrainingEmployee Education and Training

MARK B HORTON, MD, MSP Director

ARNOLD SCHWARZENEGGER Governor

Why have this training?Why have this training?Why have this training?Why have this training? To comply with Federal law – the federal To comply with Federal law – the federal

Deficit Reduction Act of 2005 (DRA) as Deficit Reduction Act of 2005 (DRA) as amended in 2007 by amended in 2007 by §§ 6032. 6032.

To familiarize employees with GDSP False To familiarize employees with GDSP False Claims policies and procedures.Claims policies and procedures.

To provide guidelines for detecting and To provide guidelines for detecting and preventing fraud, waste, and abuse.preventing fraud, waste, and abuse.

To ensure GDSP receives continued Medi-To ensure GDSP receives continued Medi-Cal and Medicaid funding.Cal and Medicaid funding.

Link: Federal Deficit Reduction Act

PoliciesPoliciesPoliciesPolicies Include information about the Include information about the FederalFederal

and and CaliforniaCalifornia FCA Whistleblower FCA Whistleblower protectionsprotections under these laws. under these laws.

These policies may be updated as These policies may be updated as needed and subsequent training may needed and subsequent training may

be required. be required.

Who needs this training?Who needs this training?Who needs this training?Who needs this training?

All GDSP employees and All GDSP employees and management.management.

All GDSP contractors.All GDSP contractors.

All GDSP agents.All GDSP agents.

The Genetic Disease Screening The Genetic Disease Screening Program takes allegations of funding Program takes allegations of funding

fraud, waste and abuse very fraud, waste and abuse very seriously!!!seriously!!!

The Genetic Disease Screening The Genetic Disease Screening Program takes allegations of funding Program takes allegations of funding

fraud, waste and abuse very fraud, waste and abuse very seriously!!!seriously!!!

All complaints regarding potential All complaints regarding potential fraud, waste fraud, waste and abuseand abuse of program funding are investigated of program funding are investigated and employees who report these issues will be and employees who report these issues will be protected from retaliation.  protected from retaliation. 

The Genetic Disease Screening Program has The Genetic Disease Screening Program has procedures for detecting and preventing procedures for detecting and preventing fraud, fraud, waste, and abusewaste, and abuse.  The Screening Information .  The Screening Information System (SIS) has a set of checks and balances System (SIS) has a set of checks and balances known as inconsistencies that assure contractors known as inconsistencies that assure contractors cannot bill inappropriately.cannot bill inappropriately.

There are program standards and guidelines for There are program standards and guidelines for contractors that provide services included in the contractors that provide services included in the contracts and/or vendor agreements.contracts and/or vendor agreements.

The Federal False Claims The Federal False Claims ActAct

(31 USC (31 USC § 3279-3733)§ 3279-3733)

The Federal False Claims The Federal False Claims ActAct

(31 USC (31 USC § 3279-3733)§ 3279-3733) Enacted in 1863 to combat Enacted in 1863 to combat

fraud by government fraud by government contractors.contractors.

Used extensively to combat Used extensively to combat fraud in government health fraud in government health care programs.care programs.

Amended in 1986 to Amended in 1986 to include non-retaliation include non-retaliation ((whistleblowerwhistleblower) protections.) protections.

Link to: Federal False Claims Act

Liability under the federal Liability under the federal False Claims ActFalse Claims Act

Liability under the federal Liability under the federal False Claims ActFalse Claims Act

The False Claims Act establishes liability The False Claims Act establishes liability for any person who for any person who KNOWINGLYKNOWINGLY presents presents false or fraudulent claims to the US false or fraudulent claims to the US government for payment.government for payment.

The Act includes “Qui Tam” provisions that The Act includes “Qui Tam” provisions that allow private citizens (allow private citizens (relatorsrelators) to sue ) to sue violators on behalf of the government.violators on behalf of the government.

California False Claims Act California False Claims Act (CFCA)(CFCA)

California False Claims Act California False Claims Act (CFCA)(CFCA)

Was enacted in 1987 Was enacted in 1987 (Gov’t Code 12650 et. Seq).(Gov’t Code 12650 et. Seq).

Was modeled after theWas modeled after theFederal False Claims Act.Federal False Claims Act.

Allows the government or Allows the government or individual (individual (relatorrelator) to bring civil actions to ) to bring civil actions to recover damages, penalties, and costs recover damages, penalties, and costs when government contractors, vendors or when government contractors, vendors or others defraud the government.others defraud the government.

To View the California False Claims To View the California False Claims Act (CFCA) in its entiretyAct (CFCA) in its entirety

To View the California False Claims To View the California False Claims Act (CFCA) in its entiretyAct (CFCA) in its entirety

Link to the following site:Link to the following site:http://http://

www.leginfo.ca.gov/www.leginfo.ca.gov/calaw.htmlcalaw.html

Search for 12650-12656 Search for 12650-12656 in the Government in the Government Code SectionCode Section

Liability Under CFCALiability Under CFCALiability Under CFCALiability Under CFCA

1.1. KnowinglyKnowingly “presents or causes to be presented” a false “presents or causes to be presented” a false claim to the state.claim to the state.

2.2. KnowinglyKnowingly makes, uses, or causes to be made or used a makes, uses, or causes to be made or used a false record or statement to get a false claim paid or false record or statement to get a false claim paid or approved.approved.

3.3. Conspiring to defraud the state by submitting a false Conspiring to defraud the state by submitting a false claim or be paid one.claim or be paid one.

4.4. Delivering less property to the state than stated in the Delivering less property to the state than stated in the receipt.receipt.

5.5. Falsifying a receipt for state property.Falsifying a receipt for state property.6.6. KnowinglyKnowingly buying or taking a pledge of public property buying or taking a pledge of public property

from another not authorized to sell or pledge the from another not authorized to sell or pledge the property.property.

7.7. KnowinglyKnowingly benefitting from a false claim to the state. benefitting from a false claim to the state.8.8. Benefits from an inadvertent submission of a false claim Benefits from an inadvertent submission of a false claim

and fails to disclose the false claim within a reasonable and fails to disclose the false claim within a reasonable time after discovery.time after discovery.

Fraudulent acts under the CFCA:

What is “Knowingly”?What is “Knowingly”?What is “Knowingly”?What is “Knowingly”?

1.1. Has actual knowledge.Has actual knowledge.

2.2. Acts in deliberate Acts in deliberate ignorance of the truth or ignorance of the truth or falsity of the information.falsity of the information.

3.3. Acts in reckless disregard Acts in reckless disregard of the truth or falsity of of the truth or falsity of the information.the information.

Any person with respect to the information does any of the following:

Proof of specific intent to defraud is not required.

““Claims” Include:Claims” Include:““Claims” Include:Claims” Include: Any request or demand for Any request or demand for

money, property, or money, property, or services made to any services made to any employee, officer, agent, employee, officer, agent, contractor, grantee, or contractor, grantee, or other recipient, if any other recipient, if any portion of the money, portion of the money, property or services was property or services was provided by the state or any provided by the state or any political subdivision thereof.political subdivision thereof.

CA Government Code 12650 (b)(1)

Remedies under the CA Remedies under the CA False Claims ActFalse Claims Act

Remedies under the CA Remedies under the CA False Claims ActFalse Claims Act

Damages:Damages: Any person violating the CFCA shall be Any person violating the CFCA shall be

liable to the state for three times the liable to the state for three times the amount of damages the state sustains from amount of damages the state sustains from the acts of that person. (Government Code the acts of that person. (Government Code 125651 (a))125651 (a))

Civil Penalties:Civil Penalties: Not less than $5,000, but no more than Not less than $5,000, but no more than

$10,000 per claim.$10,000 per claim. Costs/Attorneys’ Fees.Costs/Attorneys’ Fees.

Who Can Bring a claim under Who Can Bring a claim under the CFCA?the CFCA?

Who Can Bring a claim under Who Can Bring a claim under the CFCA?the CFCA?

The state Attorney General or a The state Attorney General or a “prosecuting authority” may initiate false “prosecuting authority” may initiate false claims cases on their own.claims cases on their own. A “prosecuting authority” could include A “prosecuting authority” could include

the county counsel, city attorney, or the county counsel, city attorney, or other government official in charge of other government official in charge of pursuing civil cases.pursuing civil cases.

Private citizens (Private citizens (relatorsrelators) may file actions. ) may file actions. Like the federal FCA, California’s False Like the federal FCA, California’s False Claims Act allows “qui tam” actions.Claims Act allows “qui tam” actions.

Qui Tam Actions Qui Tam Actions (31 USC Section 3730)(31 USC Section 3730)

Qui Tam Actions Qui Tam Actions (31 USC Section 3730)(31 USC Section 3730)

Allow private citizens (“Allow private citizens (“relatorsrelators”) to bring civil ”) to bring civil actions on behalf of the Government in return for actions on behalf of the Government in return for an incentive.an incentive.

Promote the practice of private persons coming Promote the practice of private persons coming forward and aiding the government in pursuing forward and aiding the government in pursuing fraud and waste.fraud and waste.

California - CFCA Qui Tam Incentives California - CFCA Qui Tam Incentives California - CFCA Qui Tam Incentives California - CFCA Qui Tam Incentives If the Attorney General (AG) initiates or If the Attorney General (AG) initiates or

takes over the case from a local prosecuting takes over the case from a local prosecuting authority and prevails, the AG gets 33% of authority and prevails, the AG gets 33% of the recovery. (Government Code Section the recovery. (Government Code Section 12652 (g)).12652 (g)).

If the prosecuting authority takes the case If the prosecuting authority takes the case and prevails, he/she gets 33%. and prevails, he/she gets 33%.

If the prosecuting authority intervenes in an If the prosecuting authority intervenes in an action initiated by the AG or remains a party action initiated by the AG or remains a party in an action assumed by the AG, the in an action assumed by the AG, the prosecuting authority receives a portion of prosecuting authority receives a portion of the AG’s 33% as determined by the court.the AG’s 33% as determined by the court.

California - CFCA Qui Tam Incentives California - CFCA Qui Tam Incentives (cont.)(cont.)

California - CFCA Qui Tam Incentives California - CFCA Qui Tam Incentives (cont.)(cont.)

If a “If a “relatorrelator” brings the case and the AG or ” brings the case and the AG or prosecuting authority intervenes, the prosecuting authority intervenes, the relator gets between 15% and 33% of the relator gets between 15% and 33% of the recovery, depending on the recovery, depending on the relator’srelator’s contribution to the prosecution. The AG or contribution to the prosecution. The AG or prosecution authority gets 33%.prosecution authority gets 33%.

If the If the relatorrelator brings the case and neither brings the case and neither the AG nor the prosecuting authority the AG nor the prosecuting authority intervenes, intervenes, relatorrelator receives 25% to 50% of receives 25% to 50% of the overall recovery as determined by the the overall recovery as determined by the court.court.

The successful The successful relatorrelator gets costs and fees. gets costs and fees.

Qualifications to Qui Tam Qualifications to Qui Tam Incentives in the CFCAIncentives in the CFCA

Qualifications to Qui Tam Qualifications to Qui Tam Incentives in the CFCAIncentives in the CFCA

If the defendant prevails and the court finds If the defendant prevails and the court finds that the qui tam plaintiff (that the qui tam plaintiff (relatorrelator) was clearly ) was clearly frivolous, clearly vexatious, or took action frivolous, clearly vexatious, or took action for the purposes of harassment, then the for the purposes of harassment, then the court may award to the defendant court may award to the defendant reasonable attorney’s fees and expenses.reasonable attorney’s fees and expenses.

There is no guaranteed minimum recovery There is no guaranteed minimum recovery for actions initiated by:for actions initiated by:• Present or former employees of the State or Present or former employees of the State or

political subdivision who did not initially utilize political subdivision who did not initially utilize internal procedures for reporting.internal procedures for reporting.

• Present or former employees who actively Present or former employees who actively participated in the fraudulent activity.participated in the fraudulent activity.

Whistleblower ProtectionsWhistleblower ProtectionsWhistleblower ProtectionsWhistleblower Protections

The Federal False Claims acts The Federal False Claims acts protectsprotects whistleblowers who initiate, assist whistleblowers who initiate, assist with, or testify for a false claim action. with, or testify for a false claim action. ((31 USC 31 USC §§ 3730(h)) 3730(h))

This section protects employees This section protects employees against discharge, demotion, against discharge, demotion, suspension, threats, harassment, or suspension, threats, harassment, or discriminationdiscrimination by the employer by the employer because of lawful acts done by the because of lawful acts done by the employee in cooperating with the employee in cooperating with the False Claims Act.False Claims Act.

Whistleblower Protections in Whistleblower Protections in the CFCA the CFCA (CA Government Code (CA Government Code

12653)12653)

Whistleblower Protections in Whistleblower Protections in the CFCA the CFCA (CA Government Code (CA Government Code

12653)12653) Prevents employers from making, adopting Prevents employers from making, adopting

and enforcing any rule that would prevent and enforcing any rule that would prevent an employee from acting in furtherance of a an employee from acting in furtherance of a false claims action.false claims action.

No employer shall No employer shall discharge, demote, discharge, demote, suspend, threaten, harass, deny promotionsuspend, threaten, harass, deny promotion to, or in any other manner discriminate to, or in any other manner discriminate against an employee because of lawful acts against an employee because of lawful acts done by the employee in an action filed or to done by the employee in an action filed or to be filed under the CA False Claims Act.be filed under the CA False Claims Act.

Federal Administrative Process for Federal Administrative Process for False Claims and StatementsFalse Claims and Statements

Detailed information regarding the Detailed information regarding the administrative process can be found in:administrative process can be found in:

Government code 31 USC Government code 31 USC § § 3801 to 3808, 3801 to 3808, this code includes information regarding:this code includes information regarding:

Federal Administrative Process for Federal Administrative Process for False Claims and StatementsFalse Claims and Statements

Detailed information regarding the Detailed information regarding the administrative process can be found in:administrative process can be found in:

Government code 31 USC Government code 31 USC § § 3801 to 3808, 3801 to 3808, this code includes information regarding:this code includes information regarding:

Definitions,Definitions, Individual liability (up to $5,000 for Individual liability (up to $5,000 for

each fraudulent claim),each fraudulent claim), Hearings and judicial Review, andHearings and judicial Review, and The right to administrative offset.The right to administrative offset.

What You Can Do to Report What You Can Do to Report Fraud and AbuseFraud and Abuse

What You Can Do to Report What You Can Do to Report Fraud and AbuseFraud and Abuse

Report the Report the suspected incident suspected incident either orally or in either orally or in writing.writing.

Who to ContactWho to ContactWho to ContactWho to Contact

Report any suspected fraud, waste or Report any suspected fraud, waste or abuse to either:abuse to either:

Your supervisor or manager, Your supervisor or manager, the California Department of Public the California Department of Public

Health, Deputy Director of the Center For Health, Deputy Director of the Center For Family Health at (916) 440-7600.Family Health at (916) 440-7600.

What will happen?What will happen?What will happen?What will happen?

The nature and details of the The nature and details of the suspected fraud will be documented suspected fraud will be documented in writing.in writing.

The report will be forwarded to the The report will be forwarded to the Deputy Director of the Center for Deputy Director of the Center for Family Health in the Department of Family Health in the Department of Public Health within 2 days of the Public Health within 2 days of the report.report.

The InvestigationThe InvestigationThe InvestigationThe Investigation

Will be initiated by the Department of Will be initiated by the Department of Public Health.Public Health.

Corrective actions will be taken, if Corrective actions will be taken, if necessary, which may include filing a necessary, which may include filing a claim with the Attorney General’s office.claim with the Attorney General’s office.

All complaints regarding potential fraud, All complaints regarding potential fraud, waste and abuse of program funding waste and abuse of program funding will be taken seriously.will be taken seriously.

Billions of $$$ are lost to Billions of $$$ are lost to FraudFraud

Billions of $$$ are lost to Billions of $$$ are lost to FraudFraud

“During FY 2006, the Federal Government won or negotiated approximately $2.2 billion in judgments and settlements, and it attained additional administrative impositions in health care fraud cases and proceedings. The HCFAC account has returned over $10.4 billion to the Medicare Trust Fund since the inception of the program in 1997”.

Healthcare Fraud and Abuse Control Program 200Healthcare Fraud and Abuse Control Program 20066

It is estimated that 5% of total U.S. health care funds are lost to fraud!

So Now You KnowSo Now You KnowSo Now You KnowSo Now You Know You can help protect You can help protect

government funds by reporting government funds by reporting any suspected fraud, waste, or any suspected fraud, waste, or abuse. abuse.

The False Claims laws are the The False Claims laws are the single biggest weapon for single biggest weapon for combating fraud perpetrated by combating fraud perpetrated by government contractors, government contractors, vendors and others against the vendors and others against the federal and state government. federal and state government.