False Claims Act

On February 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005 into law. The Deficit Reduction Act contains many provisions reforming Medicare and Medicaid that are designed to reduce program spending. As an entity that offers Medicaid and Medicare coverage, CareSource® is required to comply with certain provisions of the Deficit Reduction Act. One such provision requires us to provide you with information about the Federal False Claims Act, state False Claims Acts and other state laws regarding Medicare and Medicaid Fraud. In addition, the law requires you and your contractors and agents to adopt our policy on fraud, waste and abuse when handling CareSource business.

The Federal False Claims Act 

Using the False Claims Act (the Act), you can help reduce fraud against the federal government. The Act allows everyday people to bring “whistleblower” lawsuits on behalf of the government, known as “qui tam” suits, against groups or other individuals that are defrauding the government through programs, agencies or contracts.

The False Claims Act applies when a company or person:

  • Knowingly presents a false or fraudulent claim for payment, 
  • Knowingly uses a false record or statement to get a claim paid,
  • Conspires with others to get a false or fraudulent claim paid, or
  • Knowingly uses a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property.

“Knowingly” means acting with actual knowledge or with reckless disregard or deliberate indifference to the truth or falsity of information.

An example would be if a health care provider, such as a hospital or a physician, knowingly “upcodes” or overbills; resulting in overpayment of the claim using Medicaid or Medicare dollars.

The time period for a claim to be brought under the False Claims Act is the later of:

  • Within six years from the date of the illegal conduct, or 
  • Within three years after the date the government knows or should have known about the illegal conduct, but in no event later than ten years after the illegal activity.

Indiana State Law

Indiana has enacted a false claims statute that meets the requirements of Section 1909 of the Social Security Act. Section 1909 provides a financial incentive for a state to enact a false claims statute that is at least as effective in rewarding and facilitating qui tam actions for false claims as those described in the federal False Claims Act.

Indiana’s False Claims and Whistleblower Protection Act applies to any individual or entity that knowingly or intentionally:

  • Presents a false claim to the state for payment or approval;
  • Makes or uses a false record or statement to obtain payment or approval of a false claim from the state;
  • With intent to defraud the state, delivers less money or property to the state than the amount recorded on the certificate or receipt the person receives from the state;
  • With intent to defraud the state, authorizes issuance of a receipt without knowing that the information on the receipt is true;
  • Receives public property as a pledge of an obligation on a debt from an employee who is not lawfully authorized to sell or pledge the property;
  • Makes or uses a false record or statement to avoid an obligation to pay or transmit property to the state;
  • Conspires with another person to commit a violation of any other section of the statute; or
  • Causes or induces another person to violate any other section of the statute.

Indiana’s False Claims and Whistleblower Protection Act may be found at Indiana Code 5-11-5.5-1, et seq.

Care Source Policy

It is the policy of CareSource to detect and prevent any activity that may violate the federal False Claims Act or the state Medicaid fraud laws cited in this policy. If any employee, provider, delegated entity, subcontractor or agent has knowledge or information that any such activity may have taken place, he or she should contact the Special Investigations Unit. Information may be reported anonymously.

In addition, federal and state law and CareSource policy prohibits any retaliation or retribution against persons who report suspected violations of these laws to law enforcement officials or who file “whistleblower” lawsuits on behalf of the government. Anyone who believes that he or she has been subject to any such retribution or retaliation should also report this to the Special Investigations Unit.