An issue every health care entity that submits claims to the government must frequently confront is when and how to disclose an overpayment to the government. This issue arises when, for example, an employee expresses concern about a claim or an internal audit or review questions a claim, or a Medicare Administrative Contractor inquires into a claim. Under amendments to the Affordable Care Act (ACA), if an overpayment is not reported to the government within 60 days, the entity could be held liable under the FCA for treble damages and substantial civil penalties.1
The FCA is the government’s primary weapon to prevent fraud against the United States. Since Congress substantively amended the FCA in 1986 to facilitate the filing of private whistleblower lawsuits (known as qui tam actions filed by plaintiffs known as “relators”), more than 9,000 qui tam actions have been filed. In fact, over one recent five-year period (2008-2013) alone, more than 3,000 lawsuits were filed, and $20 billion was recovered. These numbers rival or even eclipse securities and antitrust in annual filings and recoveries.1
Last week, a Los Angeles Superior Court held that the relevant date for determining when the statute of limitations begins to run under the Insurance Frauds Prevention Act (IFPA) is the date an insurer forms a reasonable belief that a claim is fraudulent and refers the claim to the California Department of Insurance (DOI), not the date the insurer refers a claim to its Special Investigation Unit (SIU).
After California amended the California False Claims Act (CFCA), effective January 1, 2013, it asked the Office of the Inspector General (OIG) of the U.S. Department of Health and Human services to review the amended CFCA and determine whether it meets the requirements of section 1909 of the Social Security Act (Section 1909), which provides a financial incentive for states to enact false claims acts as robust as the federal FCA. In a letter dated April 3, 2013, the OIG informed California’s Attorney General that the amended CFCA meets the requirements of Section 1909. A copy of the letter may be found here.
For additional information on the California False Claims Act statute, see our previous blog post.
Overview of the State Statute. California enacted its civil False Claims Act (CFCA) in 1987 to establish a cause of action for false claims for payment submitted to the State of California. The state statute was modeled after the 1986 amended version of the federal False Claims Act (FCA). The CFCA provides that the Attorney General, the “prosecuting authority” of a political subdivision or a private citizen may prosecute cases under the Act.
Comparison with FCA. The CFCA is very similar to the federal False Claims Act, and as discussed below, was amended effective January 1, 2013 to match changes to the FCA between 2009 and 2010. However, the CFCA still differs from the FCA in several minor respects. For example: