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Medicare fraud: 3 federal laws you should know

The federal government looks on Medicare fraud rather severely because the offense involves defrauding the government of money. There are many ways to commit Medicare fraud.

For example, it could include any of the following:

  • Misrepresenting the facts of a case or making a false claim to the federal government to receive Medicare funds
  • Soliciting, offering or receiving kickbacks for providing services covered by Medicare
  • Rewarding referrals and making illegal referrals

Here are three federal laws that govern Medicare fraud.

1. Federal False Claims Act

One key element identified by this law is intent. The physician has to know about the submission of a fraudulent claim to Medicare. Many physicians rely on an employee to submit claims, but if there is proof a physician knew about the claim, he or she may face charges.

A physician who violates this law may face civil and criminal penalties, including repayment of the claims as high as three times the original amount received, fines and/or a prison sentence.

2. Physician Self-Referral Law

Self-referral does not mean the physician refers a patient to him or herself, but that the physician or a family member benefits from the referral. For example, say the physician refers the patient to a laboratory for tests covered by Medicare and the physician has stock in that company. The law is likely to consider that a self-referral.

Violation of this law does not result in criminal penalties, but as with the false claims law, the repayment may be three times as high. There is also a $15,000 fine for each violation, and the physician may no longer be able to participate in the Medicare program.

3. Anti-Kickback Statute

The AKS and the Physician Self-Referral Law are similar, but while the self-referral law prohibits a referral from a doctor for certain health services, the AKS prohibits referrals from anyone for any service or item. The goal of a physician may be to generate business that results in payment from the Medicare system, or it could be to induce referrals or provide a reward for referrals. 

Criminal penalties for AKS convictions include fines as high as $25,000 for each violation and a prison sentence up to five years. The civil penalties may be repayment three times the amount the original kickback received, a $50,000 fine for each violation and exclusion from the Medicare program. So, the fines alone for a single violation could be as much as $75,000 before adding the repayment penalties.

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