FCA Ruling Reiterates the Importance of Compliance
A recent U.S. Supreme Court ruling re-affirms liability under the federal False Claims Act (FCA) regardless of whether the person causing the submission of false claims to the government financially benefitted from their actions. The ruling denied a petition requesting the review of an appeal’s court decision to allow a Qui Tam suit against state officials involved in federal-state programs such as Medicaid under the federal False Claims Act (FCA) (Wilcox v. United States ex rel. Stoner, U.S., No. 07-1336, review denied 10/6/08).
The U.S. Court of Appeals argued three officials for the Santa Clara County Office of Education and the East Side Union High School District in California may be subject to liability for submitting a false claim to the United States. The appeals court determined that whistleblower John David Stoner did not have to allege that the state officials personally profited from the conduct after finding nothing in 31 U.S.C. §3729(a)(1) requiring a person knowingly making a false submission to obtain a personal benefit from the wrongful act.
Michael D. Miscoe JD, CPC, CHCC, an adamant compliance advocate, said, “This case demonstrates that a person need not benefit personally from an alleged misrepresentation to be liable under the FCA. Since coders are in many cases responsible for code selection as a means of representing the services performed, where the coder makes choices that are incorrect and designed to ‘get paid,’ liability can arise if the representations made resulting in payment are knowingly inaccurate. As certified coders, the standard of knowledge is not that they actually knew the code was wrong, but should have known by virtue of their training and credential. Because of a certified coder’s training and credential, the standard for what such a person “should know” could potentially be higher.”
While the FCA only applies to federal claims, it often provides persuasive guidance in cases where conduct is evaluated under state statutes or common law fraud standards. “There have been a number of cases where state false claims statutes or common law (judge made law) fraud causes of action have been interpreted using case law pertaining to the federal FCA,” said Miscoe.
Many coders submit claims according to what gets their physician paid and this can create liability. This case shows that the doctor (who is the primary financial beneficiary) is not the only target for false claim allegations. The standard for who is liable under the FCA are persons who actually submit a false claim or cause a false claim to be submitted—regardless of whether there was any financial benefit in doing so.
According to Miscoe, “To safeguard against FCA liability, a coder’s best defense is to research the coding rules applicable to the carrier being billed; don’t continue to bill a service just because that is what has always been done or that is what has traditionally gotten you paid.”