(August 15, 2013): The primary civil enforcement tool utilized by the federal government is the civil False Claims Act. As discussed below, the False Claims Act is an extraordinarily useful statute for government prosecutors, both in terms of ease of use and in terms of the damages which may be recovered by the government. Sometimes referred to as “Lincoln’s Law,” the False Claims Act was first passed in 1863 in response to war profiteering. Among its provisions were measures intended to encourage the disclosure of fraud by private persons through the filing of a qui tam suit. The term qui tam is taken from a Latin phrase meaning “he who brings a case on behalf of our lord the King, as well as for himself.” Under the qui tam (also commonly referred to as “whistleblower”) provisions of the statute, a private person (often referred to as a “relator”) can bring a False Claims Act lawsuit on behalf of, and in the name of, the United States, and possibly share in any recovery made by the government.
I. Medicare Dental Services / Medicaid Dental Services:
Generally speaking, most dentistry-related care and treatment services are not covered under the Medicare program. As the Center for Medicare and Medicaid Services’ (CMS’) website reflects, only a narrow scope of dental services qualify for coverage and payment under the Medicare program:
“Currently, Medicare will pay for dental services that are an integral part either of a covered procedure (e.g., reconstruction of the jaw following accidental injury), or for extractions done in preparation for radiation treatment for neoplastic diseases involving the jaw. Medicare will also make payment for oral examinations, but not treatment, preceding kidney transplantation or heart valve replacement, under certain circumstances. Such examination would be covered under Part A if performed by a dentist on the hospital's staff or under Part B if performed by a physician.”
While very few dental services are covered under Medicare, that is not necessarily the case when it comes to Medicaid-covered dental services. State Medicaid programs are required to provide dental benefits to children who qualify for covered by Medicaid and the Children’s Health Insurance Program (CHIP). Medicaid coverage for dental services to be given to adults varies from State to State. As CMS has noted:
"While most states provide at least emergency dental services for adults, less than half of the states currently provide comprehensive dental care. There are no minimum requirements for adult dental coverage." (Emphasis Added).
II. Improper Medicaid Dental Billing Practices Can Result in False Claim Act Liability:
In recent years, we have noted a marked increase in the number of False Claims Act cases brought against dentists and orthodontists for the improper dental billing of claims to the Medicaid program. In most instances, these cases were brought under the provisions of both a State’s False Claims Act and under the Federal False Claims Act. A recent False Claims Act case out of Iowa involving dental services was recently announced by Federal prosecutors. In this particular case, a dentist was alleged to have billed Medicaid for x-rays and exams that were not medically necessary. The defendant dentist was also alleged to have billed for visits that were supposedly performed exclusively by a dental hygienist. In this particular case, the defendant dentist settled the civil allegations presented for $100,000.
Furthermore, there have been a number of False Claims Act cases (brought under both the Federal and State False Claims Act statutes) that have been filed where it was alleged that Medicaid eligible children were given medically unnecessary care and treatment services. In some cases, it was also alleged that the Medicaid program was billed for services that were not provided.
At the present time, Texas appears to be the most active jurisdiction involving False Claims Act filings related to the provision of alleged improper Medicaid dental billing practices. As discussed on the website “Texas Dentists for Medicaid Reform,” one ongoing dental services fraud case brought by a whistleblower reportedly includes 46 pages of defendants, only one of whom are currently known.
III. Damages / Penalties / Whistleblower Provisions Under the False Claims Act:
Under the Federal False Claims Act, a person found to have violated this statute can be liable for civil penalties in an amount between $5,500 and not more than $11,000 per false claim, as well as up to three times the amount of damages sustained by the government.
One of the most unique elements of the False Claims Act (under both Federal and State law) is that it authorizes private parties having direct knowledge of fraudulent conduct to bring a civil suit against the violator on behalf of the government. These civil suits are known as qui tam actions, and the private parties who initiate such actions are called "relators". A relator can share in any monies recovered as a result of their qui tam action. In a Federal case, a qui tam action is initiated when a relator files a complaint – along with supporting documentation – “under seal” in Federal court. When a case is filed under seal, it means that all records associated with the whistleblower are maintained on a non-public docket by the Clerk of the Court. A copy of the complaint is given to the judge assigned to the case. The relator’s attorney also serves a copy of the complaint on the Attorney General in Washington, D.C. and on the U.S. Attorney in the Federal Judicial District in which the case was filed. Once filed and served on the government, they have 60 days to evaluate whether to proceed against the defendant. In almost all cases, the government will seek an extension to allow it an opportunity to investigate the allegations. After showing “good cause” for an extension, most federal courts will readily grant the request for an extension. It is not at all uncommon for a qui tam to remain under seal for over a year (and often much longer) while the government reviews the allegations. The seal is important for several reasons:
- The government can quietly investigate the allegations without the defendant knowing that their company is under investigation.
- The mere existence of a government investigation can be devastating on the public’s view of a company. Moreover, if a company is publicly-traded, the publicity surrounding a government investigation can severely affect the price of a company’s stock—despite the fact that the allegations at issue have not been investigated or proven at this point in the process.
After concluding its evaluation, the government may elect to proceed with the complaint and intervene in the case or it may decline to intervene. If the government decides to intervene in the action, then the relator has the right to remain a party to the action. If the government decides not to intervene in the case, the qui tam relator may elect to proceed on his or her own against the defendant. Notably, the government always retains the ability to intervene in the case at a later time. From a practical standpoint, if the government decides not to intervene in a case, in all likelihood the relator will seek to dismiss the suit. Unlike the government, the relator’s ability to investigate a False Claims Act case is quite limited, both in terms of resources and in terms of investigative tools. As a result, the government’s decision to decline to intervene severely impacts a relator’s ability to move forward with the case.
IV. Improper Medicaid Dental Conduct:
As you can imagine, there are a myriad of ways in which a dentist or orthodontist may be alleged to have violated the False Claims Act when billing for Medicaid. A few examples of problematic conduct include, but is not limited to:
- Billing for Medicaid services provided by a dentist who has been excluded from participation in the Medicare and Medicaid programs.
- Billing for services not rendered. For example, a defendant may allege that a papoose board was needed to restrain a young patient, when in fact, it was not used at all.
- Dental services provided by an unlicensed individual.
- Failure to document the dental services provided.
- Giving something of value to an individual in exchange for the referral of a patient for Medicaid-covered dental services.
Now, more than ever, it is imperative that dentists and orthodontists develop, implement and adhere to all statutory and regulatory requirements set out in an effective Compliance Plan. Do you have questions about the False Claims Act, its coverage or its provisions? Great, give us a call.
Robert W. Liles, MBA, MS, JD, serves as Managing Partner at Liles Parker, a boutique health law firm representing health care providers around the country in connection with audits, investigations, compliance and transactional health care projects. For a free consultation regarding your case, please give Robert a call. He can be reached at: 1 (800) 475-1906.