(March 6, 2015): As we have seen in recent years, Medicaid audits resulting in dental claims False Claims Act liability are increasing around the country. Earlier this week, the U.S. Attorney’s Office, the U.S. Department of Health and Human Services. Office of Inspector General (HHS-OIG), and the Maine Attorney General’s Office announced the settlement of a civil lawsuit filed against a Maine dentist for violations of the federal False Claims Act. According to the government, the dentist paid $484,744.80 to settle allegations that he had improperly billed MaineCare (Maine’s Medicaid program) for dental services that were not medically necessary and lacked the proper documentation to support the claim. The government also alleged that the dentist billed the MaineCare program for “unsubstantiated tooth extractions” and for “narcotics prescribed without proper justification.” This case is merely the latest case brought by federal and state prosecutors against dentists and other dental professionals for violations of the federal False Claims Act. The purpose of this article is to briefly examine the background of the federal False Claims Act and to discuss a number of risks currently facing dental practices and dental professionals participating in Medicaid and other federal health care programs.
I. Background of the False Claims Act:
Sometimes referred to as “Lincoln’s Law,” the federal 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.
II. Damages Under the False Claims Act:
A person found to have violated this statute is 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.
The issue of how false claims are to be counted has resulted in considerable litigation over the years. While decisions vary, most courts have held that each submission constitutes a separate claim. Prior to the emergence of electronic filing, it was not uncommon for providers to bundle a set of claims together and send them in to their state Medicaid contractor for processing and payment. This “bundle” would likely constitute a single “claim” for purposes of the False Claims Act. Today, most dentists send in individual claims as they are entered into the dental practice’s electronic billing system. As a result, each time that a dentist (in most instances, an administrative staff member working for, or on behalf of, the dentist) hits “ENTER” to transmit a single claim to the Medicaid contractor for processing and payment, this action would constitute a single claim for purposes of the statute. As one can easily imagine, even a small number of false claims could result in extensive civil penalties and damages.
III. Recoveries Under the False Claims Act:
In Fiscal Year 2014 (FY 2014), the U.S. Department of Justice (DOJ) recovered an all-time high record $5.69 billion in settlements and judgments from civil cases brought under the federal False Claims Act (31 U.S.C. §3729 et seq.). Notably, FY 2014 was the first time that False Claims Act recoveries in a single year have exceeded $5 billion. From January 2009 through the end of the FY 2014, the government has recovered more than $22.75 billion. While most False Claims Act cases brought in connection with health care have focused on hospitals and other medical providers, a growing number of dental claims False Claims Act cases have been brought against dental practices and dental professionals.
As in previous years, much of this success has been due (in large part) to the coordinated efforts of the DOJ, HHS-OIG and their state law enforcement counterparts through the Health Care Fraud Prevention & Enforcement Action Team (HEAT). The HEAT program was created in 2009 and was designed to “prevent fraud, waste, and abuse in the Medicare and Medicaid programs, and to crack down on the fraud perpetrators who are abusing the system.” Importantly, dentists and dental practices participating in the Medicaid program should expect both federal and state law enforcements’ efforts to increase, not decrease or remain stable. Notably, the discretionary funding for program integrity activities has continued to rise. The ongoing solvency of the Medicaid program depends on the ability of law enforcement agencies to successfully address the improper, and sometimes fraudulent, conduct committed by individuals and entities participating in this joint federal and state funded programs.
IV. Statute of Limitations Under the False Claims Act:
The federal False Claims Act’s statute of limitation provisions have been extensively litigated. As a result, it is important that you work with your legal counsel to determine if the dental claims at issue in your case are likely to fall outside of the actionable period. Generally, the False Claims Act has a 6-year statute of limitations. However, this 6-year period can be tolled (under certain circumstances) up to a maximum of 10 years from when the government knew, or reasonably should have known, that the violation occurred. The statute of limitations provisions are found in 31 U.S.C. § 3731(b).
A civil action under section 3730 may not be brought —
- more than 6 years after the date on which the violation of section 3729 is committed, or
- more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.
In assessing when the period of limitations runs, a court will look at the time at which either the relator or the government became aware or knew of the violation. In light of the long statute of limitations associated with the False Claims Act, dental practices and other health care providers responding a False Claims Act case have sometimes faced the difficult prospect of locating supporting documentation, x-rays and molds in an effort to defend claims billed to the Medicaid program over a 10-year period.
V. Final Remarks:
What steps can you take to reduce your potential liability for dental False Claims Act violations, you should ensure that Compliance Plan (tailored to address your dental practice’s specific risks and needs) has been put into place. A Compliance Plan can greatly assist your dental practice in meeting its statutory and regulatory obligations under federal and state law. Developing and implementing an effective Compliance Plan can greatly reduce the likelihood of a False Claims Act violation taking place. Using an effective Compliance Plan as a road map can assist in streamlining your dental practice’s business operations, reduce the possibility of a statutory violation and help to mitigate any damages that might result from a problem you were previously unaware of. Finally, a Compliance Plan can serve as evidence that your dental practice is doing its best to fully comply with applicable laws, rules and regulations. Ultimately, regulatory compliance should be an essential element of your dental office’s corporate culture.
- False Claims Act Cases: Government Intervention in Qui Tam (Whistleblower) Suits, U.S. Department of Justice, available at www.justice.gov/usao/pae/Documents/fcaprocess2.pdf (last accessed March 2015).
-  For example, if a dentist improperly submits a false claim to Medicaid for payment in the amount of $100 and is subsequently paid $100, the dentist would be liable under the False Claims Act for both damages and penalties. Under the False Claims Act, the government may recover up to three times the amount of damages it suffers, which in this example would be $300, plus penalties of between $5,500 and $11,000 per false claim. Collectively, the dentist’s liability would range from $5,800 to $11,300 for a $100 claim.
-  News Release, Dep’t. of Health & Human Servs., Health Care Fraud Prevention and Enforcement Efforts Result in Record-Breaking Recoveries Totaling Nearly $4.1 Billion (Feb. 14, 2012), available at http://