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Nov. 10, 2022

Comparison of Three Federal Fraud and Abuse Laws

By Courtney G. Tito

In the post-COVID era, health care fraud and abuse issues will be aggressively and swiftly enforced by the government. The legal framework and regulations in the health care space can be intimidating. Below is a comparison of three of the big federal fraud and abuse laws that the government actively enforces; but they are not an exclusive list.  The summary below is a primer on the three main federal fraud and abuse laws and is intended to increase your basic understanding of these laws.


False Claims Act (FCA)

PROHIBITIONS:

  • Prohibits the submission of false or fraudulent claims, false statements material to a false claim, and conspiracy to commit violation
  • Prohibits concealing or avoiding obligation to repay money to government (failure to return overpayments)
  • Claims that violate AKS or Stark can also be considered false claims
  • Common false claims include lack of medical necessity; quality of care; billing/coding issues; off-labeled marketing; retention of overpayments

EXCEPTIONS:

  • n/a

PENALTIES:

  • Treble damages and as of May 9, 2022 per claim penalties between $12,537 and $25,076
  • Regulated by the DOJ

Physician Self-Referral (Stark)

PROHIBITIONS:

  • Prohibits referrals of designated health services by a physician (or an immediate family member) if the physician has a financial relationship with the entity performing the designated health service
  • Regulates financial relationships with physicians (and physician's immediate family members) only

EXCEPTIONS:

  • The arrangement must completely satisfy an exception or it violates the Stark law

PENALTIES:

  • No criminal enforcement; CMP enforcement for knowing violations: per violation penalties– 3x claims and/or per circumvention scheme penalties; Nonpayment of claims arising from prohibited arrangement; Recoupment of amounts received; Exclusion from federal health programs; FCA liability
  • Regulated by CMS

Anti-Kickback Statute (AKS)

PROHIBITIONS:

  • Prohibits offers of, solicitation of, or payment or receipt of remuneration intended to induce referrals for health care services covered by a government program
  • Covers provision of anything of value to a person who refers, orders/purchases or recommends

EXCEPTIONS:

  • Voluntary safe harbors exist, but arrangements are not required to fit within a safe harbors

PENALTIES:

  • Applies to either party involved in an arrangement that violates AKS; Criminal penalties $100,000 /violation, up to 10 years imprisonment); Civil penalties (CMP3x unlawful remuneration and $100,000/violation); Exclusion from federal health programs; FCA liability
  • Regulated by the OIG

Providers should also be aware of other enforcement statutes such as the Eliminating Kickbacks in Recovery (“EKRA”), the Civil Monetary Penalties Act (“CMP”), and the Travel Act, to name a few, in addition to being well versed in the relevant state health care fraud and abuse frameworks.