MODEL FALSE CLAIMS AND

WHISTLEBLOWER PROTECTION

EDUCATION POLICY

To: Wisconsin Association of Homes and Services for the Aging ("WAHSA") Members

From: Reinhart Boerner Van Deuren, s.c.

Re: Model False Claims and Whistleblower Protection Policy

The attached Model False Claims and Whistleblower Protection Policy (the "Model Policy") was developed at WAHSA's request by the Reinhart Boerner Van Deuren, s.c. Long Term Care Practice Group and is intended to be used by WAHSA members as a guide to assist with the development of an employee, contractor and agent education policy that complies with the requirements of section 6032 of the Deficit Reduction Act of 2005 (the "DEFRA"). The DEFRA mandates that each entity that receives five million dollars or more in annual Medicaid payments was required to have a compliant policy in place by January 1, 2007.

For assistance in tailoring the Model Policy to meet the specific or individualized needs of your health care organization or for assistance in developing, reviewing or revising your general corporate compliance plans or polices, contact the Reinhart Boerner Van Deuren, s.c. Long Term Care Practice Group at 1-800-553-6215.

Reinhart Boerner Van Deuren's Long Term Care Practice Group serves health care and long term care providers in a variety of areas, including regulatory compliance, survey and certification, licensing, HIPAA, caregiver misconduct investigations, corporate, labor and employment, criminal and civil investigations by state or federal government agencies, litigation, contracts and daily operational issues.

Reinhart Boerner Van Deuren s.c (referred to herein as "us") presents the Model Policy as a service to WAHSA members. Although the Model Policy and information contained in it describe various legal issues, the information is not legal advice. Such information may not be applicable to your particular legal situation and may not reflect recent developments in the law. You should consult with a lawyer before relying on any of the information you may access from the Model Policy. No attorney-client relationship is created between you and us by your use or viewing of the Model Policy.


[INSERT ORGANIZATION'S NAME]

FALSE CLAIMS AND WHISTLEBLOWER PROTECTION

EDUCATION POLICY

1. Policy Effective Date. January 1, 2007.

2. Scope. This policy applies to all employees (including management), contractors and agents of [Insert Organization's Name].

3. Purpose. The purpose of this policy is to provide information to employees, contractors and agents of [Insert Organization's Name] regarding certain federal and state laws that concern the submission of false and fraudulent claims for payment to the government. These laws play a central role in the government's efforts to prevent and detect fraud, waste and abuse in federal health care programs.

4. Policy. It is the policy of [Insert Organization's Name] to provide health care services in a manner that complies with applicable federal and state laws and that meets the high standards of business and professional ethics. Specifically, it is the policy of [Insert Organization's Name] to detect and eliminate waste, fraud and abuse related to payments to [Insert Organization's Name] from federal or state programs providing payment for patient care and other services. Consequently, [Insert Organization's Name] does not tolerate making or submitting false or misleading billing claims or statements to any government agency, health care program or payer source. To further this policy, and to comply with Section 6032 of the Deficit Reduction Act of 2005, [Insert Organization's Name] provides the following information about its policies and procedures and the role of certain federal and state laws in preventing and detecting waste, fraud and abuse in federal health care programs:

5. Summary of Federal and State False Claims Laws. The following is a summary of the Federal False Claims Act (the "FCA"), the Program Fraud Civil Remedies Act (the "PFCRA"), and the Wisconsin Medicaid Fraud Statute, and their role in preventing and detecting waste, fraud and abuse in federal health care programs.

(a) Federal False Claims Laws.

(i) The FCA, 31 U.S.C. §§ 3729 – 3733; 18 U.S.C. §1035. The FCA was first enacted during the Civil War to fight fraud in supplying goods to the Union Army. The law has undergone a number of changes since then and now applies to any federally funded contract or program, except tax fraud. The FCA was expanded to include Medicare and Medicaid programs in 1986.

The FCA imposes civil liability, pursuant to 31 U.S.C. § 3729, on any person who, with respect to federal health care programs:

· Knowingly files a false or fraudulent claim for payments to Medicare, Medicaid or other federally funded health care program;

· Knowingly makes or uses a false record or statement to obtain payment on a false or fraudulent claim from Medicare, Medicaid or other federally funded health care program;

· Knowingly makes or uses a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money to the government; or

· Conspires to defraud Medicare, Medicaid or other federally funded health care program by attempting to have a false or fraudulent claim paid.

Under 31 U.S.C. section 3729, "knowing" and "knowingly" mean that a person, with respect to the information has:

· Actual knowledge of the information;

· Acts in deliberate ignorance of the truth or falsity of the information; or

· Acts in reckless disregard of the truth or falsity of the information (no specific intent to defraud is required).

A person or entity found liable under the FCA is generally subject to civil monetary penalties of between $5,500 and $11,000 per claim plus three times the amount of damages that the government sustained because of the illegal act. In health care cases, the amount of damages sustained is the amount paid for each claim filed that is determined to be false. The FCA imposes criminal liability, pursuant to 18 U.S.C. § 1035, to persons that knowingly and willfully make any materially false, fictitious or fraudulent statements in connection with the delivery or payment for health benefits. Penalties may include imprisonment for up to five years.

Anyone may bring a qui tam action under the FCA in the name of the United States. The case is initiated by filing the complaint and all available material evidence under seal with a federal court. The complaint remains under seal for at least 60 days and will not be served on the defendant. During this time, the government investigates the complaint. The government may, and often does, obtain additional investigation time by showing good cause. After expiration of the review and investigation period, the government may elect to pursue the case in its own name or decide not to pursue the case. If the government decides not to pursue the case, the person who filed the action has the right to continue with the case on his or her own.

If the government proceeds with the case, the person who filed the action will receive between 15% and 25% of any recovery, depending upon the contribution of that person to the prosecution of the case. If the government does not proceed with the case, the person who filed the action will be entitled to between 25% and 30% of any recovery, plus reasonable expenses and attorneys' fees and costs.

(ii) The PFCRA; 31 U.S.C. §§ 3801- 3812. The PFCRA creates administrative remedies for making false claims and false statements. These penalties are separate from and in addition to any liability that may be imposed under the FCA.

The PFCRA imposes liability on people or entities that file a claim that they know or have reason to know:

· Is false, fictitious, or fraudulent;

· Includes or is supported by any written statement that contains false, fictitious, or fraudulent information;

· Includes or is supported by a written statement that omits a material fact, which causes the statement to be false, fictitious, or fraudulent, and the person or entity submitting the statement has a duty to include the omitted fact; or

· Is for payment for property or services not provided as claimed.

The PFCRA imposes liability for making or submitting a written representation, certification, document, record, accounting or bookkeeping entry with respect to a claim that an individual knows or should know asserts a material fact that is false, fictitious or fraudulent; or omits a materials fact that the individual has a duty to include which causes the statement to be false, fictitious or fraudulent and the statement contained a certificate of accuracy.

A violation of the PFCRA is punishable by a $5,000 civil penalty for each wrongfully filed claim, plus an assessment of twice the amount of any unlawful claim that has been paid.

(iii) Examples of FCA and PFCRA Violations. The following are examples of conduct that could lead to potential liability under the FCA or the PFCRA. The examples listed below are not the only instances in which the FCA or the PFCRA may be violated. Some examples were identified through settlements and corporate integrity agreements reached between providers and the U.S. Department of Justice and Office of the Inspector General. Information on these and other settlements can be accessed at www.oig.hhs.gov or www.usdoj.gov.

· Knowingly making false statements on a cost report.

· Knowingly falsifying records such as treatment plans to maximize payments.

· Falsifying certificates of medical necessity or billing for services not medically necessary.

· Unlawfully giving health care providers inducements in exchange for services or referrals.

· Knowingly submitting bills for services never performed.

(b) The Wisconsin Medicaid Fraud Statute. Section 49.49(1) of Wisconsin's Medicaid Fraud Statute prohibits any person from:

· Knowingly and willfully making or causing to be made a false statement or misrepresentation of a material fact in a claim for Medicaid benefits or payments;

· Knowingly and willfully making or causing to be made a false statement or misrepresentation of a material fact for use in determining rights to Medicaid benefits or payments;

· Having knowledge of an act affecting the initial or continued right to Medicaid benefits or payments or the initial, or continued right to Medicaid benefits or payments of any other individual on whose behalf someone has applied for or is receiving the benefits or payments, concealing or failing to disclose such event with an intent to fraudulently secure Medicaid benefits or payments whether in a greater amount or quantity than is due or when no benefit or payment is authorized; or

· Making a claim for Medicaid benefits or payments for the use or benefit of another, and after receiving the benefit or payment, knowingly and willfully converting it or any part of it to a use other than for the use and benefit of the intended person.

Anyone found guilty of the above may be imprisoned for up to six years, and fined not more than $25,000, plus 3 times the amount of actual damages.

6. [Insert Organization's Name] Policies and Procedures for Detecting and Preventing Fraud. [Drafter's Note: Insert a summary of your organization's policies for detecting and preventing fraud, waste and abuse. These policies should be included in your organization's Compliance Plan (if it has one). The summary should reference the Compliance Plan and/or policies, explain how it/they can be accessed and identify appropriate parties who are available to answer questions. Organizations may want to take this opportunity to update their Compliance Plans if they have not done so recently. Further, if your organization has an Employee Handbook, it should include an outline of the information contained in this policy.]

7. Anti-Retaliation Protections. Individuals within an organization who observe activities or behavior that may violate the law in some manner and who report their observations either to management or to governmental agencies are provided protections under certain laws.

(a) Federal Law Protections. The FCA includes protections for people who file qui tam lawsuits as described above. The FCA states that any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful actions taken in furtherance of a qui tam action is entitled to recover damages. He or she is entitled to "all relief necessary to make the employee whole," including reinstatement with the same seniority status, twice the amount of back pay (plus interest), and compensation for any other damages the employee suffered as a result of the discrimination. The employee also can be awarded litigation costs and reasonable attorneys' fees.

(b) State Law Protections. Wisconsin Statutes section 146.997 protects health care workers who disclose any of the following to an appropriate individual or agency:

· Information that a health care facility or provider has violated any state law or rule or federal law or regulation; or

· A situation in which the quality of care provided by, or by an employee of, the health care facility or provider violates established standards and poses a potential risk to public health or safety.

Specifically, a health care facility or provider can not take disciplinary action against an individual who reports the above in good faith. A health care facility or provider who violates this statute shall be subject to not more than $1,000 for a first violation.