Subject: Compliance Policy: Compliance Code of Conduct
Approved: April 11, 2023 (Resolution No. 23-101)Effective Date: March 28, 2023Revised: August 26, 2014, December 22, 2020, March 29, 2022, April 11, 2023Assigned to: Government Operations CommitteeResponsible Dept.: Compliance Next Review: June 2024
Madison County is committed to providing services with compassion and integrity. For that reason, Madison County has developed this Compliance Code of Conduct, which establishes the legal and ethical standards that govern our expectations for all Affected Individuals (as defined in the Corporate Compliance Plan and further described in Attachment 1 thereto) as it relates to the provision of health services and the Compliance Program.
Madison County’s goal is to communicate to all Affected Individuals its expectations of ethical and professional conduct and to ensure an understanding of these expectations. By signing the Compliance Code of Conduct, each Affected Individual agrees to the following policy.
Social Service Law § 363-d, Title 18 NYCRR § 521, NYS Labor Law §§ 740/741
A. Code of Conduct
1. Quality of Care
2. Compliance with Laws and Regulations:
3. Conflicts of Interest:
4. Billing and Coding:
5. Business and Financial:
B. Overview of Relevant Laws
1. FEDERAL LAWS
False Claims Act (31 USC, §§ 3729-3733)
The False Claims Act (“FCA”) provides, in pertinent part, that:
(a) Any person who (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; (3) conspires to defraud the Government by getting a false or fraudulent claim paid or approved by the Government; ... or (7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government,
Is liable to the United States Government for a civil penalty or not less than $13,506 and not more than $27,018 , plus three (3) times the amount of damages which the Government sustains because of the act of that person...
(b) For purposes of this section, the terms “knowing” and “knowingly” mean that a person, with respect to information (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required (31 USC § 3729).
While the False Claims Act imposes liability only when the claimant acts “knowingly”, it does not require that the person submitting the claim have actual knowledge that the claim is false. A person who acts in reckless disregard or in deliberate ignorance of the truth or falsity of the information, can also be found under the Act (31 USC § 3729[b]).
In sum, the False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services she knows she has not provided. The False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits a record that he knows (or should know) is false and that indicates compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim” may include a hospital that obtains interim payments from Medicare throughout the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.
In addition to its substantive provisions, the FCA provides that private parties may bring an action on behalf of the United States (31 USC § 3730[b]). These private parties, known as “qui tam relators”, may share in a percentage of the proceeds from an FCA action or settlement.
Section 3730(d)(1) of the FCA provides, with some exceptions, that a qui tam relator, when the Government has intervened in the lawsuit, shall receive at least fifteen (15) percent, but not more than twenty-five (25) percent of the proceeds of the FCA action, depending upon the extent to which the realtor substantially contributed to the prosecution of the action. When the Government does not intervene, § 3730(d)(2) provides that the realtor shall receive an amount that the court decides is reasonable and shall not be less than twenty-five (25) percent and not more than thirty (30) percent.
Administrative Remedies for False Claims (31 USC Chapter 38, §§3801-3812)
This statute allows for administrative recoveries by federal agencies. If a person submits a claim that the person knows is false or contains false information, or omits material information, then the agency receiving the claim may impose a penalty of up to $13,508 for each claim. The agency may also recover twice the amount of the claims.
Unlike the False Claims Act, a violation of this law occurs when a false claim is submitted, not when it is paid. Also unlike the False Claims Act, the determination of whether a claim is false, and the imposition of fines and penalties is made by the administrative agency, not by prosecution in the federal court system.
2. NEW YORK STATE LAWS
New York’s false claims laws fall into two categories: civil and administrative, and criminal laws. Some apply to recipient false claims and some apply to provider false claims, and while most are specific to healthcare or Medicaid, some of the “common law” crimes apply to areas of interaction with the government.
A. Civil and Administrative Laws
New York False Claims Act (State Finance Law, §§187-194)
The New York False Claims Act closely tracks the federal False Claims Act. It imposes penalties and fines on individuals and entities that file false or fraudulent claims for payment from any state or local government, including health care programs such as Medicaid. The penalty for filing a false claim is $6,000 - $12,000 per claim and the recoverable damages are between two (2) and three (3) times the value of the amount falsely received. In addition, the false claim filer may have to pay the government’s legal fees.
Social Services Law, §145(c) – Sanctions
If any person applies for or receives public assistance, including Medicaid, by intentionally making a false or misleading statement, or intending to do so, the person’s and the person’s family’s needs are not taken into account for six (6) months if a first offense, twelve (12) months if a second (or once if benefits received are over $3,900) and five years for four (4) or more offenses.
B. Criminal Laws
Social Services Law, §145 – Penalties
Any person, who submits false statements or deliberately conceals material information in order to receive public assistance, including Medicaid, is guilty of a misdemeanor.
Social Services Law, §366(b) – Penalties for Fraudulent Practices
Penal Law, Article 155 – Larceny
The crime of larceny applies to a person who, with intent to deprive another of his property, obtains, takes or withholds the property by means of trick, embezzlement, false pretense, false promise, including a scheme to defraud, or other similar behavior. It has been applied to Medicaid fraud cases.
Penal Law, Article 175 – False Written Statements
Four crimes in this Article relate to filing false information or claims and have been applied in Medicaid fraud prosecutions:
Penal Law, Article 176 – Insurance Fraud
Applies to claims for insurance payment, including Medicaid or other health insurance and contains six crimes:
Penal Law, Article 177 – Health Care Fraud
3. WHISTLEBLOWER OR “QUI TAM” PROVISIONS
Federal False Claims Act – 31 USC, § 3730(h)
The FCA provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the FCA (31 USC § 3730[h]). Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.
New York False Claim Act – State Finance Law, § 191
The False Claim Act also provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the Act. Remedies included reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.
New York Labor Law, § 740
An employer may not take any retaliatory action against an employee if the employee, whether or not within the scope of the employee’s job duties, discloses information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official.
This law offers protection to an employee who:
The employee’s disclosure is protected under this law only if the employee has made a good faith effort to notify his or her employer by bringing the activity, policy or practice to the attention of a supervisor and has afforded the employer a reasonable opportunity to correct such activity, policy or practice. Such employer notification shall not be required where: (a) there is an imminent and serious danger to the public health or safety; (b) the employee reasonably believes that reporting to the supervisor would result in a destruction of evidence or other concealment of the activity, policy or practice; (c) such activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor; (d) the employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person; or (e) the employee reasonably believes that the supervisor is already aware of the activity, policy or practice and will not correct such activity, policy or practice.
The law allows employees who are the subject of a retaliatory action to bring a suit in state court within two years after the alleged retaliatory action for (a) an injunction to restrain continued violation of this section; (b) reinstatement to the same, or an equivalent position, or front pay in lieu thereof; (c) the reinstatement of full fringe benefits and seniority rights; (d) the compensation for lost wages, benefits and other remuneration; (e) the payment by the employer of reasonable costs, disbursements, and attorney’s fees; (f) a civil penalty of an amount not to exceed $10,000.00; and/or (g) the payment by the employer of punitive damages, if the violation was willful, malicious or wanton
New York Labor Law, § 741
Under this law, an employer may not take any retaliatory action against an employee if the employee discloses or threatens to disclose to a supervisor, to a public body, to a news media outlet, or to a social media forum available to the public at large, an activity, policy or practice of the employer or agent information about the employer’s policies, practices or activities that the employee, in good faith, reasonably believes constitutes improper quality of patient care or improper quality of workplace safety; or objects to, or refuses to participate in any activity, policy or practice of the employer or agent that the employee, in good faith, reasonably believes constitutes improper quality of patient care or improper quality of workplace safety.
The employee’s disclosure is protected under this law only if the employee has brought the improper quality of patient care or improper quality of workplace safety to the attention of a supervisor and has afforded the employer a reasonable opportunity to correct such activity, policy or practice, unless the improper quality of patient care or improper quality of workplace safety described therein presents an imminent threat to the public health or safety or to the health of a specific patient or specific health care employee and the employee reasonably believes in good faith that reporting to a supervisor would not result in corrective action. If the employer takes a retaliatory action against the employee, the employee may seek enforcement as outlined in New York Labor Law § 740, as set forth above.
4. ANTI-KICKBACK LAW
Federal Anti-Kickback Statute (42 USC, §§ 41320a-7b)
The Medicare/Medicaid Anti-Kickback Statute makes it a felony for any person or entity to knowingly and willfully solicit, receive, offer or pay any remuneration in exchange for referring, furnishing, purchasing, leasing or ordering (or recommending the furnishing, purchasing, leasing, or ordering of) any good, facility, service or item that is paid in whole or in part by the Medicare or Medicaid programs, or other federal health care programs. Both the recipient and the offer or of the remuneration are subject to the Anti-Kickback Statute. Violators are subject to fines up to $25,000 per violation, up to five (5) years in prison, as well as administrative penalties, including exclusion from participation in the Medicare and/or Medicaid programs.
Remuneration. The term “remuneration” is broadly defined and includes any kickback, bribe, discount, rebate, in case or in kind, whether paid directly or indirectly. The government has taken the position that conferring of any benefit by one party on another constitutes “remuneration” for the purpose of the Anti-Kickback Statute. Because the prohibition applies to direct as well as indirect remuneration, the entire chain of financial transactions must be analyzed under this law, where at least one of the parties receives reimbursement from federal health programs and at least one other party is in a position to make referrals, order goods or services, or generate businesses for the first. Such common business practices as the provision of discounts for volume, or the offer of preferential pricing on prepackaged or bundled goods and services, are subject to the scrutiny as unlawful remuneration.
One Purpose Rule. The Anti-Kickback Statute has been construed by court decision to prohibit any otherwise legitimate remuneration for goods or services rendered if “one purpose” of the payment is to induce the referral, furnishing, leasing, etc., of goods or services paid by the Medicare or Medicaid programs.
Fair Market Value. When the remuneration between the parties is not fair market value, the government suspects that one purpose of the reimbursement is to compensate referrals between the parties.
Fair market value under the Anti-Kickback Statute is generally defined as that remuneration in the arms’ length transaction that is not determined in a manner that takes into account the volume or value of Medicare or Medicaid services generated between the parties. Although no compensation methodology is per se prohibited, the government in various public statements has indicated that it views per procedure, per order, per purchase and percentage of revenue compensation methodologies as susceptible to abuse under the Anti-Kickback Statute because they inherently vary with volume or value.
Safe Harbors. The government has promulgated by regulation certain “safe harbors”, which are payment practices that are excluded from the definition of “remuneration”. However, the failure of an activity to comply with a safe harbor does not mean it violates the law, only that it is subject to case-by-case scrutiny under the Anti-Kickback Statute. The safe harbors cover a limited number of payment practices and are narrowly drawn. In addition, the safe harbors generally require that the entire transaction be “commercially reasonable” and have a reasonable commercial purpose other than the exchange of referrals. The risk of an enforcement action is mitigated the closer a transaction comes to meeting the various standards of a safe harbor.
Fraud Alerts. The Office of Inspector General (OIG) of the Department of Health and Human Services in fraud alerts, Advisory Opinions and other public statements has identified practices and arrangements that it considers potentially violative of the Anti-Kickback Statute. These fraud alerts should be regarded as the government’s enforcement position with respect to a particular subject matter. The fraud alerts are examples and the naming of specific types of providers in a fraud alert does not limit the application of its meaning.
The OIG considers improper under the Anti-Kickback Statute any payment, prize, reward, including any gift, or any offer of free goods or services if it is:
Because of the central role of physicians under Medicare reimbursement rules, the OIG has also issued fraud alerts on the paying of incentives to physicians, and has identified several arrangements it considers potentially improper, such as providing physicians with:
5. FEDERAL STARK LAW, 42 USC, § 1395NN
Under the federal physician self-referral prohibition (known as the Stark Law), a physician is prohibited from referring to an entity for certain “designated health services” if he or she has an ownership interest or a compensation arrangement with the entity. In addition, the referral recipient is prohibited from submitting a claim or receiving services provided pursuant to a prohibited referral. Because a “compensation arrangement” is defined as one which involves any form of remuneration, direct and indirect, the Stark Law will apply to every financial relationship between an entity and a physician, and likely, such intermediaries and Internet-based service providers who facilitate transactions between the physician and the provider of designated health services. “Designated health services” include outpatient prescriptions and radiology services.
The Stark Law differs from the federal Anti-Kickback Statute in that where the Anti-Kickback Statute is intent-based (i.e., it requires knowing and willful behavior); the Stark Law creates an absolute prohibition on referral regardless of intent, unless the financial relationship or the referral falls within a stated exception. Hence, the failure to find an exception to the Stark Law is general fatal to a transaction. One of the exceptions provided under Stark is for the purchase of services (other than designated health services) by a physician at fair market value. This exception would apply to the financial relationship between an Internet-based services provider and a physician.
By checking the "I agree" box below, I, the undersigned, hereby certify that I have received the Madison County Compliance Code of Conduct. Furthermore, I acknowledge that I have read and understood the Compliance Code of Conduct and agree to abide by it. I further agree to conduct myself in an ethical, legal and responsible manner at all times. I understand that I am expected to promptly report any issues, concerns, violations or suspected violations to my supervisors, the Corporate Compliance Officer, the Compliance hotline (1-855-833-7283) or any other identified reporting method.
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