False Claims Act (FCA)

The False Claims Act outlines provisions and penalties intended to prevent the Government from being charged inappropriately for health care goods and services. This act makes it illegal for individuals or entities to submit false or fraudulent claims to Medicare or Medicaid programs or cause a false or fraudulent claim to be submitted. There can be financial and criminal penalties for being involved in improper claim submission.

On this page:  

• False Claims Act Overview
• Reporting False Claims  
• State False Claims Acts  
• Resources

False Claims Act Overview

The False Claims Act [31 U.S.C. § § 3729-3733] prohibits individuals or entities from submitting inaccurate claims to a government payer (i.e., Medicare, Medicaid). Entities can violate this law by knowingly presenting a false or fraudulent claim to one of these programs or causing a false claim to be presented. Knowingly being involved in false records or statements that are ultimately presented to one of these programs resulting in a paid claim also violates the FCA. This means that a provider can violate this law by concealing or presenting false or fraudulent claims, documentation, or information on a claim. Providing false or fraudulent information on claims to be submitted by another entity also violates this act. In the FCA the term ‘knowingly’ means that the individual has direct knowledge of the inaccuracy or should have known. If the entity should have been aware that the information was false or fraudulent, they can still be convicted under this legislation. Government payers publish their policies, fee schedules, and billing manuals publicly so it is difficult to argue that knowledge of claims requirements was unattainable. Providers and other health care entities are required to do their due diligence to ensure that they are presenting accurate and appropriate claims to payers. If you are unsure about the correct way to file a claim, take the time to do research and reach out to the payer directly for more information.

It is important to get to know common coding practices and individual payer policies to ensure you reduce the chances of committing fraud, waste, or abuse. ASHA can provide some general guidance on payment considerations (See Billing and Reimbursement); however, we are not directly involved with any payers so it is always best to check directly with the source. Medicare offers a host of resources on billing and payment on their website. Clinicians can also reach out directly to their Medicare Administrative Contractor (MAC) for additional information and Local Coverage Determinations (LCD). While the federal government provides some funding and basic guidelines, Medicaid programs are managed independently in each state and maintain their own policies, websites, and resources. There is no central database of Medicaid websites but you can search for your state’s Medicaid program name in the Healthcare Medicaid Program Directory and do a web search for your state program’s website. It is important to follow the guidelines of your state Medicaid program as policies vary between states and individual programs within the state (school, outpatient, early intervention, etc.).

Fraud, waste, and abuse all violate the FCA but can have different levels of penalties. Penalties can include fines, exclusion from government insurance programs, and criminal penalties. Fines can be as high as three times the mis-billed amount plus up to $11,000 per mis-billed service or device. Broadly defined fraud is intentional deception to seek inappropriate reimbursement. Waste includes inefficiencies like ordering or performing unnecessary tests which result in overpayment and exposing beneficiaries to unnecessary services. Abuse can be defined as bending the rules. Determining between fraud and abuse depends on the facts of the case including the circumstances, intent, and knowledge of the parties involved. Learn more on the CMS website: Medicare Fraud & Abuse: Prevent, Detect, Report [PDF].

Inappropriate billing examples include but are not limited to:

• Altering diagnosis coding to reflect a more severe illness than actually existed.
• Misusing codes on a claim, such as upcoding or unbundling codes. Upcoding is when an inaccurate procedure code is billed with the purpose of receiving a higher rate of reimbursement. Unbundling is billing for aspects of a service already included in the procedure code.   
• Billing services that would not be considered medically necessary.  
• Billing services that were not truly provided to the patient.  
• Billing services provided by an improperly supervised or unqualified individual; payers determine qualifications and supervision requirements for services billed to their program.  
• Billing services performed by a provider that are excluded from participation in the Federal health care programs.

If you are concerned that you have been involved in fraud waste or abuse it is best to work with a lawyer specializing in health law who can analyze the facts of your situation and help determine your level of risk. ASHA cannot provide legal advice or help assess risk, but we can provide general information on healthcare policies.

Instead of altering coding inappropriately to secure coverage, consider other ways to expand coverage. If the plan is through an employer, they probably manage the benefits (coverage limitations) in each of the company plans. Patients can work with their employers to determine whether another plan they made available has the coverage the family needs. They can also talk with their employers or insurance company about expanding or  Adding Speech and Language Benefits to the plan.  

Given the nature and complexity of a patient's diagnosis, they may also qualify for state Medicaid benefits. This can serve as additional coverage for services beyond what a private insurance plan might offer. See more on Medicaid Eligibility, including application and contact information.

Individuals are also not required to enroll with their employer’s insurance options if they are not adequate for the family's needs. The Affordable Care Act’s healthcare marketplace is available to all citizens. Next open enrollment season, individuals can shop around their state's healthcare marketplace for a plan that meets their needs. The premium may be different so be sure to carefully review plan information before selecting one.

Reporting False Claims

If you are aware of inappropriate billing, you have the option to report it to the Office of the Inspector General (OIG). OIG has a helpful video explaining the process of Reporting Fraud to OIG. Along with AOTA and APTA, ASHA has created a resource on the basics of Compliance Reporting [PDF] that can also provide some guidance. Individuals who report fraud to OIG are known as whistleblowers and receive some protection under the FCA. The FCA protects whistleblowers from retaliation and awards them a portion of the monies recuperated by the government in a false claims case. They do not receive total anonymity but there are specific consequences if an employer retaliates against a whistleblower. If you are considering reporting, consult with a healthcare lawyer barred in your state for guidance and review of your case. For more on whistleblower protections see OIG Whistleblower Protection Coordinator.

If you discover that you have been mis-billing a government insurance program (intentionally or unintentionally) you have the option to self-report. Self-reporting will still require returning improper payments to the government program, but it greatly reduces your risk of additional penalties (such as fines or criminal penalties). OIG has a helpful video explaining the Updated Self-Disclosure Protocol and a document explaining self-reporting (self-disclosure) OIG Self-Disclosure Program [PDF]. If you are considering self-reporting consult with a lawyer barred in your state for guidance on your case and level of risk. ASHA cannot provide legal guidance, only general information on policies and considerations.

State False Claims Acts

States have the option of developing their own False Claims Act regulations that apply locally. According to section 1909 of the Social Security Act if a state’s FCA regulation meets certain criteria and is approved by the federal OIG then they are subject to a 10% higher share of the recovered funds. To qualify for the financial incentive, a State's false claims act must:

• establish liability to the State for false or fraudulent claims, as described in the Federal False Claims Act (FCA), with respect to Medicaid spending;
• contain provisions that are at least as effective in rewarding and facilitating qui tam actions for false or fraudulent claims as those described in the FCA;
• contain a requirement for filing an action under seal for 60 days with review by the State Attorney General; and
• contain a civil penalty that is not less than the amount of the civil penalty authorized under the FCA.

As of 2023, the following States’ FCA regulations have been approved: California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Minnesota, Montana, Nevada, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington. See more.  

State false claims regulations can be broader than the FCA to include more plans or more clinical situations. To learn more about your state’s regulations around false claims, contact your state licensing board or state association. If you are enrolled with private insurance plans, it is also important to review your credentialing contract with the insurer. While private insurance plans do not fall under the FCA, most have their own rules and penalties for the submission of false claims. These are often outlined in your credentialing contract and/or their internal policies. Review your contract or contact the payer directly for information on false claims, contractual regulations, and penalties.  

Resources

False Claims Act

OIG: Fraud and Abuse Laws Overview

OIG: State False Claims Act Information

ASHA, AOTA, APTA compliance reporting [PDF]