122 Unit 2 The Healthcare Environment Copyright Goodheart-Willcox Co., Inc. standard practice and may result in over- utilization of overpayment. The following laws seek to reduce the amount of fraud and abuse that occurs in the healthcare field. The False Claims Act imposes liability on people and companies (typically federal contractors who sell goods to or perform services for the government) who defraud governmental programs. Because the federal government pays such large amounts of money to healthcare institutions, this act has been increasingly applied to the wider health- care field. Examples of actions that fall under this act include filing false expense reports to a government agency, giving or receiving kickbacks, overstating charity cases, and knowingly selling defective products to the government. Under the False Claims Act, healthcare providers who knowingly make fraudulent or false claims to the government are fined $5,500 to $11,000 per claim. They also must pay three times the amount of the damages caused to the federal program. To violate the False Claims Act, actual intent to defraud the government is not required. The False Claims Act includes a provision that allows people who are not affiliated with the government to file a lawsuit on behalf of the government (also known as whistle blowing). In legal terms, whistle blowing is referred to as a qui tam. The whistleblower does not need to be personally harmed by the alleged false claim, yet persons fil- ing under this provision stand to receive a portion of any recovered damages. Once the qui tam is filed, the government has the option to join the action as a plaintiff. If the government joins, the whistleblower is entitled to 15 to 25 percent of any award or settlement. If the govern- ment decides not to join, the whistleblower can receive between 25 and 30 percent of the award or settlement. This payment acts as an incentive for individuals to assist the government with identifying fraud. Whistleblowers are protected from retaliation when they file their lawsuits. The Anti-Kickback Statute and Stark Anti-Referral Law are two laws that are particularly important to the creation of business part- nerships between healthcare facilities. Violations of these laws may result in monetary penalties, Medicare claims not being paid, liabil- ity under the Federal Claims Act, and exclusion from the Medicare program. The Anti-Kickback Statute prohibits the offering, paying, soliciting, or receiving of anything of value in return for rewards or referrals, or to generate federal healthcare program business. For example, pharmaceu- tical companies are not permitted to offer products, services, or money to physicians in return for promoting their products or drugs (Figure 7.4). Other examples include offering discounted medical goods or services for providing referrals. The penalties for violating this law are both civil and criminal. False Claims Act law that prohibits any individual or business from submitting, or causing someone else to submit, a false or fraudulent claim for payment to the government allows individuals to sue on behalf of the government on knowledge of past or present fraud against the federal government Anti-Kickback Statute a criminal statute that prohibits the exchange (or offer to exchange) of anything of value in an effort to receive the reward of federal healthcare program business Stark Anti-Referral Law law that prohibits physician referrals of designated health services for Medicare and Medicaid patients if the physician (or an immediate family member) has a financial relationship with that entity