By Greg Freeman
Waste, fraud, and abuse have plagued the United States government for more than 150 years, says Richard F. Cahill, JD, vice president and associate general counsel with The Doctors Company, a malpractice insurer based in Napa, CA.
Initially identified during the American Civil War, contractors who supplied Union troops systematically stole resources for their own financial benefit. Egregious examples included providing substandard munitions and rifles, rotten food, sick or impaired horses for cavalry units, and sawdust delivered instead of gunpowder for use in infantry muskets.
Congress responded in 1863 with the False Claims Act (FCA), also known as “the Lincoln Law,” to recover federal resources and help to curb future misappropriations, Cahill explains. The legislation authorized the DOJ to pursue both civil and criminal remedies against individuals and entities who used nefarious methods involving government procurement in a time of national crisis.
Additionally, whistleblowers, denominated as “relators,” were incentivized under the so-called qui tam provisions to report suspected conduct and thereafter permitted to keep a portion of the monies obtained, up to 50% of what federal agencies successfully recouped from entities offering goods or services to the military contrary to statutory mandates.
“In addition to monetary losses, the government was empowered to recover tangible property and profits, identify penalties at the rate of double the amounts lost and impose sanctions for interest for each independent and separate violation,” Cahill says. “The False Claims Act effectively combated fraud and subsequently prompted more than 30 American states as well as the District of Columbia and Puerto Rico to create similar legislative schemes seeking to promote the public good, although the content and scope of the many provisions vary significantly among the jurisdictions. For more than a century, the Department of Defense was the leading government agency targeted for fraud, undoubtedly given the breadth and complexity of public contracts for military and civilian programs.”
Numerous statutes were thereafter enacted, notably the False Claims Amendments Act of 1986, designed to strengthen enforcement of the regulatory scheme, increase the role of whistleblowers, and enhance penalties for individuals and entities found in willful violations, Cahill explains. Additionally, the statute of limitations was revised. Since that time, $78 billion has been recovered.
In its current form, the FCA consists of three principal components:
- a “claim” initiated to recover money or other tangible property or enforce a right to obtain a right by someone willfully withholding access;
- which seeks disbursement to the federal agency; and
- which was intentionally and falsely withheld.
The alleged perpetrator must be shown to have acted “knowingly,” Cahill explains. Furthermore, a violator’s monetary exposure has now increased to treble damages, and the interest penalty is linked to inflation. The Office for Civil Rights, operating under the auspices of the Inspector General, investigates violations of the Privacy and Security Provisions of the Health Insurance Portability and Accountability Act, as amended, which may occur in conjunction with FCA actions, he says.
FCA investigations may result in monetary sanctions as well as reports to the National Practitioner Data Bank, federal and state regulatory oversight and licensing agencies, and Centers for Medicare & Medicaid Services , as well as private third-party payers and medical staff credentialing committees, Cahill says.
Source
- Richard F. Cahill, JD, Vice President and Associate General Counsel, The Doctors Company, Napa, CA. Telephone: (800) 421-2368.
Greg Freeman has worked with Relias Media and its predecessor companies since 1989, moving from assistant staff writer to executive editor before becoming a freelance writer. He has been the editor of Healthcare Risk Management since 1992 and provides research and content for other Relias Media products. In addition to his work with Relias Media, Greg provides other freelance writing services and is the author of seven narrative nonfiction books on wartime experiences and other historical events.
Waste, fraud, and abuse have plagued the United States government for more than 150 years.
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