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What is the False Claims Act?

The False Claims Act (31 U.S.C. §§ 3729-3733) prohibits anyone from “knowingly” submitting false or fraudulent claims for payment, or engage in misconduct involving federal government money or property. The FCA in healthcare context imposes civil liability on persons who knowingly submit a false or fraudulent claim, which may include billing for services not rendered, billing for unnecessary medical services, double billing for the same service or equipment, or billing for services at a higher rate than provided (“up-coding”). A mere mistake, which can be remedied by returning overpayments, does not result in violations of these laws.

The Office of Inspector General (OIG) oversees reviewing state FCA laws to ensure compliance with federal financial incentive standards to encourage and facilitate qui tam actions. The qui tam provision allows people who are not affiliated with the government (i.e., relators, whistleblowers), to file actions on behalf of the government. Persons filing under the Act may receive a portion (usually about 15–25 percent) of any recovered damages.

Penalties for violation of FCA law are calculated through the Civil Monetary Penalty (CMP) law and range between $10,957 to $21,916 for each false claim submitted, plus three times the amount of damages (the amount of the claim).

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