How to defend against false claims allegations

Consider this: From 1987 to 1998, 2,400 qui tam cases were filed in the United States. In 1987, 12% of all qui tam were health care-related. By 1998, that number had ballooned to 61%. The average recovery in 1998 was $8.6 million, and the take for each relator averaged $1.16 million.

Sandy Teplitzky, who heads the health law department at Ober Kaler in Baltimore, says those facts alone should eliminate any doubt that the False Claims Act is driving government’s anti-fraud efforts in the area of health care. "Attorneys in the plaintiffs’ bar are actively soliciting these cases," Teplitzky asserts. In some cases, he says, qui tam relators are even fighting with each other over who uncovered the most valuable evidence.

Because the False Claims Act is an intent-based statute, the three most important things are "documentation, documentation, and documentation," Teplitzky contends. He says even "self-serving documentation" is acceptable as long as it is accurate and contemporaneous rather than after the fact. Teplitzky says there are seven key questions that compliance officers and others should consider to help insulate their facilities from the threat of government actions.

  1. What is the effect of your relationship or your business transaction on costs to the federal health care program? Teplitzky says this is still the first question that should always be asked. "Just because something is more expensive does not mean it is illegal," he argues. Nevertheless, if what you are doing has the effect of increasing costs to the federal health care program, it will be closely scrutinized, warns Teplitzky.
  2. What is the effect on utilization of health care services? Under fee-for-service payment, the government was mainly concerned with overutilization, while under managed care the concern shifted to underutilization. Teplitzky says providers should focus on "accurate utilization," and how to document services effectively.
  3. What is the effect on quality of care? Most people don’t realize that quality assurance programs are an integral part of compliance and part of the defense against fraud and abuse allegations, Teplitzky says. The key is to demonstrate not only that everybody who needed services received them, but also that the services they received met professionally recognized standards of care.
  4. What is the effect on access to care? "If you are making a service available to people who could not afford it or could not get it in the past, that’s a good thing," he says. "If what you are doing is prohibiting access to care, the government is going to view that as potentially bad."
  5. What is the effect on patients’ freedom of choice? "You won’t find this anywhere in the law but it is one of the first questions that the government asks in an investigation," Teplitzky warns. The litmus test is whether you have limited the ability of the patient to make the decision on what services or products to get, and from whom or from where to get those services, he explains.
  6. What is the effect on competition? "You won’t find this anywhere in the legislative history of the statutes, either," Teplitzky asserts. But he points out the OIG considers it one of the four main areas the statute is intended to protect against. "What matters is that we now know the government is going to look at the effect on competition," Teplitzky asserts. "If your intent is to improve competition, that is a good thing," he explains. "If your intent is to drive all of your competitors out of business, I will put you in touch with one of my partners who practices antitrust law."
  7. What is the effect on professional judgement? "Every day of our lives, there are economic issues that influence the decisions of physicians," Teplitzky argues. "The question is whether those issues are influencing physicians inappropriately and whether they are leading physicians to do things that they ought not do."