October 1998 Bulletin

IG says U.S. not treating errors as fraudulent acts

The federal government is not treating the innocent errors of those who bill Medicare as fraudulent acts, June Gibbs Brown, Inspector General of the Department of Health and Human Services, has informed the Academy.

In a letter to Nicholas Cavarocchi, director of the Academy's Washington office, on Aug. 5, 1998 Brown said "health care providers, practitioners and suppliers will not be subject to the civil monetary penalty (CMP) laws or the FCA (False Claims Act) for billing errors, honest mistakes or negligence." When billing errors, honest mistakes or negligence result in improper claims, the provider may be asked to return the funds, but without penalties, Brown said.

"Our law enforcement efforts are focused on improper claims that are made intentionally, or with reckless disregard for the truth, or with deliberate ignorance of the truth," Gibbs said. "Deliberate ignorance is the state of mind of an ostrich who refuses to observe readily obtainable facts when submitting a claim. When claims are filed with this state of mind, violations of the CMP and the FCA may be committed.

"In almost all cases, reckless disregard or intentional filing of false claims is proved by establishing a pattern of conduct. For criminal penalties, the standard is even higher-the intent to defraud must be provided beyond a reasonable doubt. On the other hand, it is important to note that all health care providers have a duty to reasonably ensure that the claims submitted to Medicare and other federal health care programs are true and accurate."

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