Employee Handbook Insert

Facility Policies Regarding Identifying and Preventing Fraud and Abuse

This nursing facility is committed to identifying and preventing health care fraud and abuse and complying with applicable state and federal laws governing fraud and abuse. The facility has established policies and procedures as part of its corporate compliance program to detect and prevent fraud and abuse. These policies include: written expectations regarding the accuracy and completeness of medical records; accuracy in billing; employee and contractor obligations to know and comply with federal and state laws governing their job duties; reporting of suspected noncompliance with the law or facility policies and procedures; policies prohibiting accepting gift or gratuities or entering into arrangements which pose a conflict of interest; prohibitions on hiring persons excluded from participating in federal health care programs; and disciplinary sanctions for failure to comply with these policies.

To assure compliance with these laws, the facility trains all employees in these policies and procedures. Copies of these policies and procedures may be found on our website at www.colonialhr.com/DRA-Policy-Procedure. The facility does not retaliate or discriminate against employees who report fraud or abuse.

As required by federal law, listed below are summaries of specific federal and state laws regarding false claims and “whistleblower” protections.

1. Federal False Claims Act

The Civil False Claims Act (31 U.S.C. §3729 et seq.) is a statute that imposes civil liability on any person who:

• knowingly presents, or causes to be presented, a false or fraudulent claim, record or statement for payment or approval,
• conspires to defraud the government by getting a false or fraudulent claim allowed or paid,
• uses a false record or statement to avoid or decrease an obligation to pay the Government, and
• other fraudulent acts enumerated in the statute.

The term “knowingly” as defined in the Civil False Claims Act (“FCA”) includes a person who 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 proof of specific intent to defraud is required.

The term “claim” includes any request or demand for money or property if the United States Government provides any portion of the money requested or demanded.

Potential civil liability under the FCA currently includes penalties of between five thousand five hundred and eleven thousand per claim, treble damages, and the costs of any civil action brought to recovery such penalties or damages.

The Attorney General of the United States is required to diligently investigate violations of the FCA, and may bring a civil action against a person. Before filing suit the Attorney General may issue an investigative demand requiring production of documents and written answers and oral testimony.

The FCA also provides for Actions by Private Persons (qui tam lawsuits) who can bring a civil action in the name of the government for a violation of the Act. Generally, the action may not be brought more than six years after the violation, but in no event more than ten. When the action is filed it remains under seal for at least sixty days. The United States Government may choose to intervene in the lawsuit and assume primary responsibility for prosecuting, dismissing or settling the action. If the Government chooses not to intervene, the private party who initiated the lawsuit has the right to conduct the action.

In the event the government proceeds with the lawsuit, the qui tam plaintiff may receive fifteen to twenty-five per cent of the proceeds of the action or settlement. If the qui tam plaintiff proceeds with the action without the government, the plaintiff may receive twenty-five to thirty per cent of the recovery. In either case, the plaintiff may also receive an amount for reasonable expenses plus reasonable attorneys’ fees and costs.

If the civil action is frivolous, clearly vexatious, or brought primarily for harassment, the plaintiff may have to pay the defendant its fees and costs. If the plaintiff planned or initiated the violation, the share of proceeds may be reduced and, if found guilty of a crime associated with the violation, no share will be awarded the plaintiff.

Whistleblower Protection. The Civil False Claims Act also provides for protection for employees from retaliation. An employee who is discharged, demoted, suspended, threatened, harassed, or discriminated against in terms and conditions of employment because of lawful acts conducted in furtherance of an action under the FCA may bring an action in Federal District Court seeking reinstatement, two times the amount of back pay plus interest, and other enumerated costs, damages, and fees ..

2. Federal Program Fraud Civil Remedies Act of 1986

The Program Fraud Civil Remedies Act of 1986 (“Administrative Remedies for False Claims and Statements” at 38 U.S.C. §3801 et seq.) is a statute that establishes an administrative remedy against any person who presents or causes to be presented a claim or written statement that the person knows or has reason to know is false, fictitious, or fraudulent due to an assertion or omission to certain federal agencies (including the Department of Health and Human Services).

The term “knows or has reason to know” is defined in the Act as a person who 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 proof of specific intent to defraud is required.

The term “claim” includes any request or demand for property or money, e.g., grants, loans, insurance or benefits, when the United States Government provides or will reimburse any portion of the money.

The authority, i.e., federal department, may investigate and with the Attorney General’s approval commence proceedings if the claim is less than one hundred and fifty thousand dollars. A hearing must begin within six years from the submission of the claim. The Act allows for civil monetary sanctions to be imposed in administrative hearings, including penalties of five thousand five hundred dollars per claim and an assessment, in lieu of damages, of not more than twice the amount of the original claim.

Connecticut False Claims, Fraud and Whistleblower Laws

In addition to the Federal laws described above, there are several state laws designed to prevent and detect fraud and abuse. Employees and contractors of the Facility are expected to act in accordance with these laws which are summarized below. Violations of these laws carry the possibility of criminal or monetary penalties as well as exclusion from participation in the Medicaid program.

A. Criminal Statutes
1. Conn. Gen. Stat. § 53a-290 et seq. Vendor Fraud. The facility, employees or contractors will be considered to have committed vendor fraud, when, with intent to defraud, the Facility or the individual:

• Presents for payment any claim for goods or services that is false;
• Accepts payment for goods or services in excess of the amount actually due or the amount allowed by law for those goods or services;
• Attempts to provide services or sell goods to a resident knowing the resident does not need the goods or services;
• Sells goods or services to a resident without prior authorization from the Department of Social Services when a prior authorization is required; or
• Accepts from any person or source additional compensation in excess of the amount allowed under the law.

2. Conn. Gen. Stat. §52-440 et. seq. Health Insurance Fraud. A person is guilty of health insurance fraud when, with the intent to defraud, he/she;

• Makes any written or oral statement as part of (or in support of) an application for health insurance or claim for payment knowing the statement is false, incomplete, deceptive or misleading or omitting material information whether for himself, a family member or third party;
• Assists, solicits or conspires with another to prepare or present any written or oral statement to any insurer or agent in connection with an application or claim for health care benefits knowing that the statement contains false, deceptive or misleading information. Misleading information includes falsely representing that goods or services were medically necessary or that they met professionally recognized standards.

The term “insurer” includes any private or governmental agency that provides medical benefits to Medicare or Medicaid recipients. Health insurance fraud is punishable by imprisonment and/or fines.

3. Conn. Gen. Stat. § 53a-118 et seq. Larceny. Defrauding the Government. A person is guilty of larceny against the government when he/she:

• Authorizes, certifies, attests or files a claim for benefits or reimbursement from a local, state or federal agency knowing it is false; or
• Knowingly accepts the benefits from a claim he knows is false.

4. Conn. Gen. Stat. §53a-155. Tampering with or Fabricating Physical Evidence: Class D felony. A person is guilty of tampering with or fabricating physical evidence if he alters, destroys, conceals or removes any record or document or makes, presents or uses any record or document knowing it is false for the purpose of misleading a public servant.

5. Conn. Gen. Stat. §53a-157b. False Statement in the Second Degree. A person is guilty of false statement in the second degree when he intentionally makes a false written statement under oath, or on a form which states that false statements made therein are punishable, knowing them to be untrue and with the intent to mislead a public servant.

B. Fraud Statutes and Regulations
1. Conn. Gen. Stat. §4-275 et seq. The Connecticut False Claims Act. This Act prohibits companies and individuals from knowingly presenting, or causing to be presented, a false or fraudulent claim to the State for payment or using false records or statements to obtain payment. Individuals who report such violations may receive a percentage of any recovery. False or fraudulent reporting under this Act can result in significant fines, treble damages and the costs of investigating and prosecuting the violation. The Act also provides protection, including reinstatement, double back pay, and other costs if an employer retaliates against any employee for making a report in good faith under this Act.

2. Conn. Gen. Stat. §17b-25a. Toll Free Vendor Fraud Telephone Line. This statute requires the Department of Social Services to provide toll-free telephone access for a person to report vendor fraud.

3. Conn. Gen. Stat. §17b-99. Vendor Fraud. This statute sets forth penalties for vendor fraud and provides for the issuance of regulations and audits as follows:

• Any vendor found guilty of vendor fraud under §53a-290 et seq. shall be subject to forfeiture or suspension of any license or franchise from the state after hearing.
• No vendor is eligible for reimbursement for any goods provided or services performed by a person convicted of a crime involving fraud in federal or state programs;
• Vendors must notify the Department within 30 days after the date of employment or conviction of the identify and extent of services performed by any person convicted of a crime involving fraud in Medicare, Medicaid or other federal health care program
• Prior to acceptance of a provider agreement or at any time upon request of the Department, a vendor must furnish the Department with the identity of any person convicted of crime involving fraud in these programs who has an ownership or control interest in the vendor or who is an agent or managing employee.
• The Department shall distribute to all vendors a copy of rules, regulations, standards and laws governing the program.
• The Department shall conduct any audit in accordance with the statute.

4. Conn. Gen. Stat. §17b-102. Regs. Conn. State Agencies 17b-102-01 et. seq. Financial Incentive for Reporting Vendor Fraud. Under these statutes and regulations, the Department of Social Services may offer up to 15% of any amounts recovered by the state as a result of a person’s report of vendor fraud.

5. Reg. Conn. State Agencies §17-83k-1 et seq. (Administrative Sanctions). These regulations set forth administrative sanctions against vendors who violate state or federal laws, rules or regulations governing the programs in which they participate. Sanctions include suspension, limitation and termination from participation in state programs. Examples of violations that may lead to such sanctions include:

• Failure to comply with any provision of a contract or agreement in effect between the vendor and the Department;
• Furnishing or ordering services in excess of a recipient’s needs or that fail to meet professionally recognized standards;
• Making a false statement or misrepresentation of fact for purpose of claiming or determining payment;
• Accepting compensation in excess of the amount authorized by law for goods or services;
• Providing unnecessary services.

C. Whistleblower Protections
The Facility encourages persons who believe that a violation of law or Facility policy has occurred to communicate their concerns to Facility management. Employees and contractors who become aware of any violation of these laws are required as part of their job responsibilities to bring such violations to the attention of Facility management.

It is the right of all persons under Connecticut law to be protected against retaliation for reporting violations of these laws. The Facility will not discriminate or retaliate in any manner against employees or contractors who disclose information about suspected violations. The following laws prohibit discrimination and/or retaliation:

1. Conn. Gen. Stat. §31-51m. Protection of Employee Who Discloses Employer’s Illegal Activities or Unethical Practices. Civil Action. No employer may discharge, discipline or otherwise penalize any employee because that person reports a violation or suspected violation of any state or federal law or regulation or because the employee is requested by a public body to participate in an investigation, hearing or inquiry.

2. Conn. Gen. Stat. §4-61dd. Whistleblowing. Large state contractors. No employee or officer of a large state contractor may take or threaten to take any personnel action against an employee in retaliation for disclosing information of any matter involving corruption or violation of state or federal laws or regulations.

3. Conn. Gen. Stat. §31-51q. Liability of Employer for Discipline or Discharge of Employee on Account of Employee’s Exercise of Certain Constitutional Rights. Any employer who disciplines or discharges and employee for exercising his/her constitutional rights shall be liable to the employee for damages, including punitive damages, and for reasonable attorney fees as part of the costs of any action for damages. If the action for damages is brought without substantial justification, the court may award costs and attorney’s fees to the employer.

4. Regs. Conn. State Agencies §4-61dd et seq. Rules of Practice for Contested Case Proceedings under the Whistleblower Protection Act. These regulations set forth the rules of practice for conducting a contested case proceeding under the Whistleblower Protection Act.