Perhaps the biggest federal tool used in the battle against health care fraud is a federal civil statute entitled the False Claims Act (FCA). It has been described as the single most important tool taxpayers have to combat fraud committed against the federal government. To give you an idea regarding its effectiveness, in fiscal year 2010 the U.S. Justice Department secured $3 billion in civil settlements and judgments in cases involving fraud against the government. Of this amount, approximately $ 2.4 billion was recovered through the FCA. It is also worthy to note that of the $3billion in government recoveries, approximately $2.5 billion, or 83%, was attributable to health care fraud.
As its moniker-Lincoln’s Law- reflects, the FCA dates back to the Civil War and was originally focused on preventing fraud perpetrated against the government by suppliers. Armed with 1986 revisions and now amendments brought about by the enactment of the Fraud Enforcement Recovery Act of 2009 (FERA), it is no wonder why the FCA has been so instrumental in the battle against fraud. It applies to fraud involving any federally funded program or contract except tax fraud. As the statistics above reveal, the focus of the FCA use has now shifted from defense contracting to health care fraud.
Federal efforts did not stop with enhancements to the FCA. Seeking to encourage states to upgrade their own anti-fraud efforts, Congress enacted the Deficit Recovery Act of 2005 (DRA). In the Medicaid fraud provisions of the DRA, states were provided monetary incentives, in the form of enhanced Medicaid monies, to enact state false claims acts that match or exceed the federal counterpart.
Responding to this “federal persuasion”, in 2008 New Jersey enacted its own false claims act, entitled “The New Jersey False Claims Act”, (NJFCA), N.J.S.A. 2A:32C-1, to combat fraud against the state’s Medicaid program.. Upon review of the NJFCA by the Office of Inspector General, U.S. Department of Health and Human Services (OIG), it was found that the NFCA did not fully comport with federal guidelines, that is, it was not at least as effective as its federal counterpart. Thus corrective amendments of the NJFCA, that now pass OIG scrutiny, were signed into law shortly before our last change of gubernatorial administrations.
The NJFCA, which essentially mirrors the FCA, establishes civil liability for false or fraudulent claims made against all state funded programs, including Medicaid. It authorizes any person to bring a civil action in the Superior Court of New Jersey against any other person who knowingly causes the State to pay a false or fraudulent claim and imposes onerous financial penalties on the offender. Thus it can be expected that the NJFCA will be utilized extensively to combat fraudulent schemes employed against such a tempting target as our state Medicaid program.
NJFCA prohibits a person or entity from doing the following:
- knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval;
- knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;
- conspiring to defraud the State by getting a false or fraudulent claim allowed or paid by the State;
- having possession, custody, or control of property or money used, or to be used, by the State and
knowingly deliver, or cause to be delivered, less than all of that money or property;
- being authorized to make or deliver a document certifying receipt of property used, or to be used, by the State and, intending to defraud the State, make or deliver the receipt without completely
knowing that the information on the receipt is true;