FCA Enforcement: United States Department of Justice Linda A. - - PowerPoint PPT Presentation

Linda A. Kontos Assistant United States Attorney U.S. Attorney’s Office Civil Fraud Section Central District of California

FCA Enforcement: United States Department of Justice

Overview:

• False Claims Act: 31 U.S.C. §3729 et seq.
• Background Re: Government FCA Investigation
• Fraud Enforcement and Recovery Act of 2009 (“FERA”)
• Affordable Care Act of 2010 & the Anti-Kickback Statute
• The views expressed today, in this oral and PowerPoint

presentation and in conversation with you, are those only of Linda Kontos personally, and are not, and should not be taken as, official positions of either the Office of the United States Attorney or the Department of Justice.

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Our “Mission”

Recover $$$ Taken By False Pretenses and Other Misconduct From Federally Funded Health Insurance Programs (e.g., Medicare & Medicaid) Deter Conduct By Penalizing Those Who Engage In The Wrongdoing

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Our Main Tool: Civil False Claims Act (“FCA”)

Primary Statute Used To Combat Fraud Against the U.S. Liability for TREBLE the amount of damages sustained by the U.S. + Civil penalty per false claim and false statement: $5,500

• $11,000 +

Exclusion/debarment from program (admin. remedy)

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Elements Required to Prove a Case:

• CLAIM FOR PAYMENT TO THE GOVERNMENT
• FALSITY
• MATERIALITY
• REQUIRED STATE OF MIND (“SCIENTER”)

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Examples of Falsity

Services not rendered (the provider claims they were

rendered by submitting a bill for payment)

Upcoding (billing for a more expensive and extensive

service than the one actually rendered)

Services not medically necessary Claim tainted by kickbacks

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Required State of Mind

Required State Of Mind (Scienter) Statute Defines “Knowledge” As:

Actual knowledge OR Deliberate ignorance OR Reckless disregard of the truth or falsity of the information

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Mechanics of a Qui Tam (Whistleblower) Action

Suit is Filed Under Seal (Confidential) Government Investigates Government Intervenes or Declines Intervention Case Either Settles or Proceeds to Trial

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The Investigation - Phase 1 Different Tools - Examples

• Civil

CIDs or subpoenas Documents Interrogatories

• Criminal

Search Warrants AIDs Grand Jury Subpoenas

• Administrative

Suspension

• f Payments

Seizure Warrants and Asset Forfeiture (Civil or Criminal)

The Investigation - Phase 2

Putting the Evidence Together Document Review Witness Interviews CID Depositions Experts/Consultants If Criminal investigation:

Consensual monitoring Undercover operations 10

The Investigation – Phase 3

Settlement Intervention or Declination (Qui Tam)

Gear Up for Trial

Document Requests Interrogatories Requests for Admission Depositions

Motions (dismissal, summary judgment) Trial 11

The Fraud Enforcement and Recovery Act of 2009 (“FERA”)

Became law May 20, 2009 1st significant revision of FCA in > 20 yrs. § 4 contains FCA amendments – “Clarifications to the

FCA to Reflect the Original Intent of the Law”

Primary Purpose –

To overrule judicial decisions with which Congress disagreed

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FERA: Civil Investigative Demands

CIDs: have previously been sparingly issued for

documents, interrogatories, and depositions

FERA allows sharing of information obtained by CIDs

with Relators (whistleblowers) “if the Attorney General or designee determine it is necessary as part of any false claims act investigation.” § 3733(a)(1)

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FERA: “Reverse” False Claims

Former § 3729 (a)(7): New § 3729 (a)(1)(G):

False statement required Not required for clause 2

Liability: “knowingly, makes, uses

• r causes to be made or used, a false

record or statement to conceal, avoid,

• r decrease an obligation to pay or

transmit money or property to the Government” (emphasis added) “[1] knowingly makes, uses or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government,

• r

[2] knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government”

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FERA: “Reverse” False Claims cont’d.

Clause 2 (new): knowingly conceals or knowingly and improperly avoids

• r decreases an obligation to pay or transmit money or property to the

Government

No false statement necessary Liability for retaining federal funds you are not entitled to have

(e.g., Medicare overpayments)

FCA now specifically defines “obligation” to include

“retention of any overpayment. . . .” § 3739(b)(4)

Knowing retention of overpayment: FCA liability if funds

initially improperly paid or if funds legitimately received initially but later required to be returned

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The Patient Protection & Affordable Care Act (“PPACA”): FCA & AKS

FCA actions regularly have been brought based on an

underlying violation of the Anti-Kickback Statute (“AKS”) – 42 U.S.C. § 1320a-7b

The AKS makes it a criminal offense to “knowingly and

willfully” exchange remuneration for a referral for medical items/services that may be paid for by a federal health care program (e.g., Medicare/Medicaid).

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AKS – Ninth Circuit Specific Intent

Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995) Under Hanlester, prosecutors in the Ninth Circuit were

required to show that a defendant “(1) kn[e]w that [the AKS] prohibits offering or paying remuneration to induce referrals, and (2) engage[d] in prohibited conduct with the specific intent to disobey the law.” Id. at 1400 (emphasis added).

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PPACA: No Specific Intent Under AKS

PPACA § 6402(f) expressly provides that any claim

submitted in violation of the AKS “constitutes a false or fraudulent claim” under the FCA

PPACA § 6402(f) adds language to the AKS –

“(h) . . . a person need not have actual knowledge of [the AKS] or specific intent to commit a violation of this section.”

Appears to legislatively overrule Hanlester, as specific

intent is not required

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QUESTIONS???

Linda A. Kontos, AUSA United States Attorney’s Office Civil Fraud Section Healthcare Fraud Coordinator 213.894.3986 Linda.kontos@usdoj.gov

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