Fraud, Waste, and Abuse (FWA) Rules and Regulations

Fraud

Knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program (Title 18 United States Code [USC] Section 1347).

Waste

The overutilization of services or other practices that, directly or indirectly, results in unnecessary costs to the healthcare system.

Abuse

Actions that may, directly or indirectly, result in unnecessary costs to the health care system, improper payment, payment for services that fail to meet professionally recognized standards of care, or services that are medically unnecessary. Abuse involves payment for items or services when there is no legal entitlement to that payment and the provider has not knowingly and/or intentionally misrepresented facts to obtain payment.

Provider Liability

PrimeWest Health shall assume the provider, physician, or supplier should have known about a policy or rule if any of the following are true:

The policy or rule is in the provider, physician, or supplier manual or in Federal regulations;
The Centers for Medicare & Medicaid Services (CMS) or a CMS contractor provided general notice to the medical community concerning the rule;
CMS, a CMS contractor, or the Office of Inspector General (OIG) gave written notice of the policy or rule to the particular provider/physician/supplier;
The provider, physician, or supplier was previously investigated or audited as a result of not following the policy or rule;
The provider, physician, or supplier previously agreed to a Corporate Integrity Agreement as a result of not following the policy or rule;
The provider, physician, or supplier was previously informed that its claims had been reviewed/denied as a result of the claims not meeting certain Medicare requirements which are related to the policy or rule; or
The provider, physician, or supplier previously received documented training/outreach from CMS or one of its contractors related to the same policy rule.

Federal Fraud and Abuse Laws

Federal anti-fraud and abuse provisions prohibit certain types of business transactions or arrangements. Three Federal fraud and abuse laws that apply to providers are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), and the Physician Self-Referral Law (Stark law). Government agencies, including the Department of Justice, the Department of Health & Human Services Office of Inspector General (OIG), and the Centers for Medicare & Medicaid Services (CMS), are charged with enforcing these laws, and the Federal government has broad authority to penalize FTEs who engage in fraud and abuse.

False Claims Act (31 U.S.C. secs. 3729 – 3733)

The FCA provides that it is illegal to submit claims for payment to Medicare or Medicaid that one knows or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs' loss plus $11,000 per claim filed. Each instance of an item or a service billed to Medicare or Medicaid counts as a claim. A violation of the False Claims Act can also create liability under the AKS or Stark law.

The FCA contains civil and criminal components. Under the civil FCA, no specific intent to defraud is required to find a violation. It defines "knowing" to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. Under the criminal FCA (18 U.S.C. § 287), penalties for submitting false claims include imprisonment and criminal fines. The OIG also may impose administrative civil monetary penalties for false or fraudulent claims.

Anti-Kickback Statute (42 U.S.C. sec 1320a-7b[b])

The AKS is a criminal law that prohibits the knowing and willful payment of remuneration to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs. The statute covers the payers and recipients of kickbacks. The AKS has many safe harbor exceptions that protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. To be protected by a safe harbor, an arrangement must satisfy all of its requirements.
An individual who violates the AKS can face criminal penalties of up to $100,000 per violation and up to a 10-year prison term per violation. Administrative sanctions for violating the AKS include fines and exclusion from participation in the Federal health care programs.

Physician Self-Referral Law (Stark Law) (42 U.S.C. sec. 1395nn)

The Stark law prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements. No specific intent to violate the law is required in order to find a violation.

Penalties for those who violate the Stark law can include refund obligation, civil monetary penalties of up to $15,000 for each service and up to three times the amount claimed, and exclusion from participation in the Federal health care programs.

Updated_2/27/20

Policies & Guidelines