False Claims

Policy Title:
False Claims

Effective Date:
01/01/2007

Last Reviewed Date:
04/13/2021

Purpose:
To ensure that Company employees, providers, contractors, subcontractors, agents, and vendors comply with federal and state false claims laws and regulations that prohibit the submission of false claims for reimbursement by the government.

Scope and Applicability:
This policy applies to any claim submitted to the state or federal government for reimbursement by the Company, or any of its providers, contractors, subcontractors, agents, and vendors.

Definitions:
A “false claim” is a falsely or fraudulently filed demand for money or property in response to which the government provides any portion of the money or property requested.

An “overpayment” is defined under the PPACA amendment as any funds received or retained under Medicare or Medicaid to which the provider, supplier, or plan is not entitled after an applicable reconciliation.

Policy:

1. General
   Various federal and state laws and regulations, including the federal False Claims Act, have been enacted to recover money that was paid by the government as a result of fraud, waste, or abuse. The Company and its employees, providers, contractors, subcontractors, agents, and vendors are prohibited from knowingly submitting, or causing others to submit, false claims for services that would be reimbursed by the federal or state government, including health care services reimbursed by the Medicare and Medicaid programs. No proof of intent to defraud the government is required to be held liable. All that is required is that the person or organization had actual knowledge, or has acted with deliberate ignorance or reckless disregard of, the truth or falsity of his or her claim.
   
   Violation of this policy may have serious consequences for both the Company and any organization or individual involved, including possible exclusion from participation in Medicare, Medicaid or other government health care programs, as well as substantial fines and criminal penalties.
   
   Examples of false claims include, but are not limited to:
   • Falsifying medical records submitted;
   • Billing for services not rendered or goods not provided;
   • Upcoding;
   • Revenue-maximizing practices;
   • Over-utilization and under-utilization schemes;
   • Duplicate billing to obtain double compensation; and
   • Billing, certifying, or prescribing services that are medically unnecessary.

2. Civil Monetary Penalties
   The Social Security Act, which codified the Deficit Reduction Act, requires that the Company establish written policies for all employees, contractors and agents that provide detailed information regarding the False Claims Act, administrative remedies for false claims, State laws pertaining to civil and criminal penalties for false claims, and whistleblower protections. These laws enlist the Company to assist with the prevention and detection of fraud, waste and abuse through the education of its workforce. The Social Security Act also authorizes the Secretary of the Department of Health and Human Services to seek civil monetary penalties, assessments, and exclusion from participation in all Federal health care programs against any organization or individual who knowingly presents or causes to be presented a claim that is improperly filed.
   
   Under the Federal Program Fraud Civil Remedies Act, in addition to any other remedy that be prescribed by law, a civil penalty for each claim may be applied.
   
   Under the Federal Program Fraud Civil Remedies Act, in addition to any other remedy that be prescribed by law, a civil penalty for each claim may be applied.
   
   These penalties apply to a claim:
   • For a medical service or item that the person knows, or should know, was not provided as claimed, including a claim for an item or service that is based on a code that the persons knows, or should know, will result in greater reimbursement than applicable to the service provided;
   • For a medical service or item and the person knows, or should know, is fraudulent or false;
   • For a service that is not medically necessary;
   • For a medical service or item that was provided when the provider of service was excluded from participation in the Medicare, Medicaid or other federal program to which the claim was made; or
   • Presented for a physician’s service by a person who knows, or should know, that the physician was not licensed as a physician; was licensed, but the license was obtained through misrepresentation; or misrepresented that the physician was certified in a medical specialty.

3. Patient Protection and Affordable Care Act
   The Patient Protection and Affordable Care Act (“PPACA”) provides that overpayments by federal health care programs, such as Medicare and Medicaid, may be considered false claims. PPACA requires providers, suppliers, and health plans to report and refund an overpayment by the later of 60 days after the date on which the overpayment was identified or the date any corresponding cost report is due. The PPACA makes reporting and repaying any overpayment an obligation under the federal False Claims Act, so that failure to report and return an overpayment within the applicable deadline may in itself result in liability under the False Claims Act, including program exclusion.
   
   The federal Anti-Kickback Statute has been amended through the PPACA to provide that claims which include items or services resulting from a violation of the Anti-Kickback Statute also constitute a false or fraudulent claim for purposes of the False Claims Act. Therefore, a violation of the Anti-Kickback Statute could subject Horizon to the penalties under the False Claims Act discussed above.

4. False Claims Acts
   The New Jersey False Claims Act has a wider statutory application than its federal counterpart. While the New Jersey False Claims Act includes the federal False Claims Act’s language of imposing liability upon people who submit false or fraudulent claims for payment or approval to an employee or officer of the government, the New Jersey False Claims Act also imposes liability on those who submit a false claim to an agent of the State, and to any contractor, grantee or other recipient of State funds. The New Jersey False Claims Act allows private individuals in New Jersey to bring suit against any person who knowingly causes the State to pay a false claim. The bill also includes a whistleblower incentive for those who come forward with any information on false claims.
   
   In addition, while the federal False Claims Act defines “claim” as a request or demand for money or property, the New Jersey False Claims Act’s definition of “claim” also includes a request for services.

5. State Provisions
   The New Jersey Health Care Claims Fraud Act allows for prosecution of criminally culpable persons who knowingly or recklessly make or cause a false, fictitious, fraudulent or misleading statements or omission of material fact, in connection with a record, bill, claim or other document submitted for payment or reimbursement for health care services. Penalties for conviction under this statute, in addition to any other applicable criminal penalties, include fines and the suspension or forfeiture of a practitioner’s license. Further, any practitioner convicted of health care claims fraud under the criminal laws of another state or the United States shall either have their license suspended or forfeited.
   
   Similarly, the New Jersey Insurance Fraud Prevention Act empowers the Commissioner of Banking and Insurance to levy civil monetary penalties against any person who knowingly makes or causes a written or oral statement to be made that contains false or misleading information in a claim for payment or other benefit pursuant to an insurance policy. Insurance companies are also empowered by the Act to sue for compensatory damages from a person who knowingly makes a written or oral statement to the insurance company that contains false or misleading information. Additional penalties under this Act include an insurance surcharge to fund the Department of Banking and Insurance’s insurance fraud prevention programs and activities, and the Insurance Fraud Prosecutor may recommend suspension or revocation of the professional license of any person found guilty of insurance fraud.
   
   The New Jersey Medical Assistance and Health Services Act discusses civil and criminal penalties when the following applies:
   • Any person who willfully obtains benefits under this act to which they are not entitled or in a greater amount than that to which they are entitled.
   • Any provider who willfully receives medical assistance payments to which he is not entitled or in a greater amount than that to which he is entitled is guilty of a crime of the third degree.
   • Any person who knowingly or willfully makes or causes to be made any false statement (written or oral) or representation of a material fact in any cost study, claim form, or any document necessary to determine rights, apply for or receive any benefit or payment.
   • Any person, who solicits, offers, or receives any kickback, rebate or bribe in connection with the furnishing of items or services for which payment is or may be made or whose costs is or may be reported in whole or in part.
   • Any person knowingly or willfully makes or causes to be made or induces or seeks to induce the making of any false statement or representation of a material fact with respect to the conditions or operations of any institution or facility in order that such institution or facility may qualify either upon initial certification or recertification as a hospital, skilled nursing facility, intermediate care facility, or health agency, thereby entitling them to receive payments under this act, shall be guilty of a crime of the fourth degree.
   The Director of the New Jersey Division of Medical Assistance and Health Services, may suspend, debar or disqualify for good cause any provider presently participating or who has applied for participation in the program, or may suspend, debar or disqualify for good cause any person, company, firm, association, corporation or other entity who is participating directly or indirectly in the Medicaid program, or who is an agent, servant, employee or independent contractor of a provider in the Medicaid program.
   
   Civil penalties include the payment of interest on the amount of the excess benefits or payments, payment of an amount not to exceed three-fold the amount of such excess benefits or payments, and payment in the sum of not less than and not more than the civil penalty allowed under the federal False Claims Act, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, for each excessive claim for assistance, benefits or payments.
   
   Any person other than an individual recipient of medical services reimbursable by the Division of Medical Assistance and Health Services, who, without intent to violate this act, obtains medical assistance or other benefits or payments under this act in excess of the amount to which he is entitled, shall be liable to a civil penalty of payment of interest on the amount of the excess benefits or payments at the maximum legal rate in effect on the date the benefit or payment was made.

6. Obligation to Report Violation
   The Horizon BCBSNJ Code of Business Conduct and Ethics and the Horizon BCBSNJ Vendor Code of Business Conduct and Ethics require every employee and vendor to be vigilant in monitoring for fraudulent activities and to immediately report any suspected fraud, waste or abuse by hospitals, physicians, other healthcare professionals, members, subcontractors, agents, vendors and/or employees.
   
   Any employee, provider, contractor, subcontractor, agent, or vendor who knows of an actual or suspected violation of this policy or an instance of fraud, waste or abuse must immediately report the activity by contacting:
   • The Compliance and Ethics Office at 1-973-466-7100; or
   • The Company’s Special Investigations Department at 1-973-466-8723.
   
   Suspected insurance fraud can be reported to the New Jersey Insurance Fraud Prosecutor Hotline at 1-877-55-FRAUD (3-7283) or at this link. Suspected Medicaid fraud, waste or abuse can be reported to the New Jersey Medicaid Fraud Division at 1-888-937-2835 or at this link.
   
   Anonymous reports of violations can be made to:
   • The Compliance Integrity Help Line at 1-800-658-6781;
   • The Medicare Advantage Fraud Hotline at 1-800-624-2048
   • The Part D Fraud Hotline at 1-888-889-2231
   • The Medicaid Fraud Hotline at 1-855-372-8320
   • The Fraud Hotline at 1-800-624-2048; or
   • In writing to:
     • The Chief Security Officer or the Compliance and Ethics Office
     • Riverfront Plaza, P.O. Box 200145,
     • Newark, New Jersey 07102

7. Non-Retaliation
   False claims laws, as well as the New Jersey Conscientious Employee Protection Act, protect employees who come forward to report suspected fraud from retaliation by their employers. In addition, Horizon BCBSNJ’s Code of Business Conduct and Ethics prohibits retaliation against any employee who reports, in good faith, any violation or suspected violation of the Code of Business Conduct and Ethics or applicable laws and regulations. Similarly, Horizon BCBSNJ Vendor Code of Business Conduct and Ethics prohibits retaliation against any Vendor who, in good faith, reports a violation, or potential compliance violation.

Sanctions:
Any employee, provider, contractor, subcontractor, agent, or vendor who violates this policy will be subject to either disciplinary action, up to and including termination of employment, or termination of contract.

Exceptions:
There are no exceptions to this Policy. Any questions regarding this policy should be directed to the Compliance and Ethics Office, the Special Investigations Department or Legal Affairs.

Regulatory, Legal, Accreditation and Policy Index:
Regulatory References

• Federal Program Fraud Civil Remedies Act, 31U.S.C. 3802 (as amended by 28 C.F.R 85.3 (a) (10-11))
• 42 C.F.R. 1001.901
• New Jersey Medicaid Managed Care Contract

Legal References

• The Federal False Claims Act, 31 U.S.C. 3729-3733
• PPACA, 42 U.S.C. 1320a-7a
• Social Security Act 1128A(a)
• New Jersey False Claims Act 2A:32C-1
• New Jersey Health Care Claims Fraud Act, N.J.S.. 2C:21-4.2 and 4.3; N.J.S. 2C:51-5
• New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 et seq.
• New Jersey Medical Assistance and Health Services Act – Criminal Penalties and Civil Remedies, N.J.S.. 30:4D-17 (a)-(i); N.J.S. 30:4D-17.1.a; N.J.S. 30:4D-17.h.
• New York False Claims Act (State Finance Law, §§187-194)

Policy References

• Code of Business Conduct and Ethics
• CO-002, Interested Party Complaint Procedures for Accounting, Auditing and Other Compliance Matters Policy
• CO-004_04132021