6.2 Fraud and Abuse Laws

The False Claims Act and Qui Tam

The False Claims Act (FCA) is the government's primary civil tool against false billing. It imposes liability on anyone who knowingly submits, or causes the submission of, a false or fraudulent claim to a federal program. Critically, "knowingly" includes actual knowledge, deliberate ignorance, and reckless disregard — so no specific intent to defraud is required. Penalties are severe: treble (3×) damages plus a per-claim civil penalty (inflation-adjusted, exceeding $13,000 per claim).

The FCA's qui tam provision is unique among these laws: a private individual (a relator, typically a whistleblower) may file suit on behalf of the United States. If the case recovers funds, the relator receives a share of the recovery (roughly 15–30%). The FCA also contains anti-retaliation protections for employees who report. For RHITs, systematically upcoded or unsupported claims are classic FCA exposure.

Anti-Kickback Statute and Stark Law

The Anti-Kickback Statute (AKS) is a criminal, intent-based law. It prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration (cash or anything of value) to induce or reward referrals of items or services payable by a federal healthcare program. Because intent is required, prosecutors must show the parties knew the arrangement was improper. The AKS uses voluntary safe harbors that protect specific arrangements meeting all conditions.

The Stark Law (Physician Self-Referral Law) is fundamentally different: it is a strict-liability civil statute. It bars a physician from referring Medicare/Medicaid patients for certain designated health services (DHS) to an entity with which the physician (or an immediate family member) has a financial relationship, unless a specific exception applies. Intent does not matter — even an inadvertent referral that fails to meet an exception is a violation. Stark applies only to physicians and to DHS; AKS is broader, covering all providers and any federally reimbursable item or service.

Civil Monetary Penalties and Exclusion

The Civil Monetary Penalties Law (CMPL) authorizes the OIG to impose administrative fines for a wide range of conduct — false claims, employing excluded individuals, violating the AKS, or improper inducements to beneficiaries. CMPs can reach tens of thousands of dollars per violation plus assessments (often treble the amount claimed).

The Exclusion authority lets the OIG bar individuals and entities from participating in all federal healthcare programs. Mandatory exclusions follow convictions for program-related crimes, patient abuse, and certain felonies; permissive exclusions are discretionary. Excluded parties are listed on the List of Excluded Individuals/Entities (LEIE), which employers must screen against — paying an excluded person for federally reimbursable work triggers CMPs.

How the Laws Interlock

These statutes are not silos — a single arrangement can trigger several at once. A kickback paid to induce referrals violates the AKS; because the Affordable Care Act made an AKS violation a per se false claim, the resulting Medicare bills also become False Claims Act liabilities; and the OIG may layer on Civil Monetary Penalties and pursue exclusion. This stacking is why even a modest improper financial relationship can produce enormous combined exposure.

The Stark Law and AKS are frequently confused on the exam. Memorize the contrasts: Stark is civil, strict-liability, physician-only, DHS-only, and uses mandatory exceptions (the arrangement either fits an exception or it is a violation). AKS is criminal, intent-based, applies to anyone, covers any federally reimbursable item or service, and uses voluntary safe harbors (missing a safe harbor is not automatically illegal — intent is still analyzed).

The RHIT's Role and Self-Disclosure

RHITs rarely litigate these cases, but they are often the first to detect the underlying problem — a pattern of unsupported claims, services billed but not documented, or a coder pressured to upcode. The compliant response is to escalate through the compliance program, not to ignore it. Organizations that find a violation can use the OIG Self-Disclosure Protocol or the CMS Voluntary Self-Referral Disclosure Protocol (SRDP) for Stark issues; voluntary, timely disclosure typically reduces penalties and demonstrates an effective compliance program.

Conversely, ignoring a known overpayment past the 60-day rule can itself create a reverse false claim under the FCA.

Penalties, Liability, and Why Intent Matters

The intent spectrum drives both which law applies and how severe the consequence is. Strict-liability Stark violations bring civil repayment and CMPs but no prison. Intent-based AKS violations are felonies carrying potential imprisonment, large criminal fines, and mandatory exclusion on conviction. The FCA sits in between for the civil track — no specific intent to defraud, yet treble damages and per-claim penalties make it the costliest in aggregate, which is exactly why qui tam relators and the DOJ pursue it so aggressively.

For the RHIT exam, anchor each fact pattern to a single discriminating cue: self-referral by a physician for designated health services points to Stark; paying or receiving value to induce referrals points to AKS; submitting false or upcoded claims points to the FCA; employing a person on the LEIE points to CMPs/exclusion. Matching the cue to the right law — and recalling whether intent is required — is the skill these questions test.