New Mexico False Claims Statutes

SCOPE:

All Company-affiliated facilities in the State of New Mexico including, but not limited to, hospitals, ambulatory surgery centers, home health agencies, physician practices, and all Corporate Departments and Divisions.

PURPOSE:

To comply with certain requirements set forth in the Deficit Reduction Act of 2005 (the "DRA") with regard to federal and state false claims laws.

DEFINITIONS: 

Contractor or agent includes any contractor, subcontractor, agent, or other person which or who, on behalf of the facility, furnishes or otherwise authorizes the furnishing of Medicare or Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the facility.

POLICY:

Company-affiliated facilities in New Mexico must ensure that all employees, including management and any contractors or agents, are educated regarding the federal and state false claims statutes and the role of such laws in preventing and detecting fraud, waste and abuse in federal health care programs.

FALSE CLAIMS LAWS

One of the primary purposes of false claims laws is to combat fraud and abuse in government health care programs. False claims laws do this by making it possible for the government to bring civil actions to recover damages and penalties when healthcare providers submit false claims. These laws often permit qui tam suits as well, which are lawsuits brought by lay people, typically employees or former employees of healthcare facilities that submit false claims. There is a federal False Claims Act. New Mexico has adopted a similar false claims act that contains qui tam and whistleblower protection provisions that are similar to those found in the federal False Claims Act. Additionally, New Mexico has adopted a generally applicable Medicaid antifraud statute that is intended to prevent the submission of false and fraudulent claims to the New Mexico Medicaid program.

FEDERAL FALSE CLAIMS LAWS

Under the federal False Claims Act, any person or entity that knowingly submits a false or fraudulent claim for payment of United States Government funds is liable for significant penalties and fines. The fines include a penalty of up to three times the Government's damages, civil penalties ranging from $14,308 to $28,619 per false claim, subject to annual inflation adjustments, and the costs of the civil action against the entity that submitted the false claims. Generally, the federal False Claims Act applies to any federally funded program. The federal False Claims Act applies, for example, to claims submitted by healthcare providers to Medicare or Medicaid.

One of the unique aspects of the federal False Claims Act is the "qui tam" provision, commonly referred to as the "whistleblower" provision.  This provision allows a private person with knowledge of a false claim to bring a civil action on behalf of the United States Government.  The purpose of bringing the qui tam suit is to recover the funds paid by the Government as a result of the false claims.  If the suit is ultimately successful, the whistleblower who initially brought the suit may be awarded a percentage of the funds recovered.  In addition, the United States Government may elect to join the qui tam suit.  In this case, if the suit is successful, the percentage of the funds awarded to the whistleblower is lower because the Government will take over the expenses of the suit.  However, regardless of whether the Government participates in the lawsuit, the court may reduce the whistleblower's share of the proceeds if the court finds that the whistleblower planned and initiated the false claims violation.  Further, if the whistleblower is convicted of criminal conduct related to his role in the false claims, the whistleblower will be dismissed from the civil action without receiving any portion of the proceeds.

The federal False Claims Act also contains a provision that protects a whistleblower from retaliation by his employer.  This applies to any employee who is discharged, demoted, suspended, threatened, harassed, or discriminated against in his employment as a result of the employee's lawful acts in furtherance of a false claims action.  The whistleblower may bring an action in the appropriate federal district court and is entitled to reinstatement with the same seniority status, two times the amount of back pay, interest on the back pay, and compensation for any special damages as a result of the discrimination, such as litigation costs and reasonable attorneys fees.

A similar federal law is the Administrative False Claims Act (the "AFCA"). It provides administrative remedies for knowingly submitting false claims and statements in the amount of $1 million or less, subject to annual inflation adjustments. A false claim or statement includes submitting a claim or making a written statement that is for services that were not provided, or that asserts a material fact that is false, or that omits a material fact. A violation of the AFCA results in a maximum civil penalty of $14,308 per claim, subject to annual inflation adjustments, plus an assessment of up to twice the amount of each claim.

The New Mexico Medicaid False Claims Act (the “NMFCA”) makes it unlawful for any person to (1) present, or cause to be presented for payment under the Medicaid program, a claim that is known to be false or fraudulent, (2) present, or cause to be presented, a claim for payment under the Medicaid program knowing that the person receiving a Medicaid benefit or payment is not authorized or is not eligible for such benefit or payment under the program, (3) knowingly make, use, or cause to be made or used a record or statement to obtain a false or fraudulent claim under the Medicaid program; (4) conspire to get a claim allowed or paid under the Medicaid program knowing that such claim is false or fraudulent, (5) make, use, or cause to be made or used a record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the state, relative to the Medicaid program, knowing that such record or statement is false, (6) knowingly apply for and receive a benefit or payment on behalf of another person, except pursuant to a lawful assignment of benefits, under the Medicaid program and convert that benefit or payment to his or her own personal use, (7) knowingly make a false statement or misrepresentation of material fact concerning the conditions or operation of a health care facility so that the facility may qualify for certification or recertification required by the Medicaid program, or (8) knowingly make a claim under the Medicaid program for a service or product that was not provided. See N.M. Stat. Ann. § 27-14-4.

The Human Services Department investigates suspected violations of the NMFCA and may bring a civil action against a person who has violated the NMFCA. Prior to bringing the civil action, the Department notifies the Attorney General who may also proceed with a civil action. Under the NMFCA, a civil action for a false or fraudulent claim must be filed within four years. See N.M. Stat. Ann. § 27-14-7. An affected individual may also bring a private civil action on behalf of the individual and the State. In the event that the Department proceeds with an action brought by a person pursuant to the NMFCA, the private plaintiff may receive a percentage of the funds recovered. See N.M. Stat. Ann. § 27-14-9, N.M. Stat. Ann. § 27-14-7.

The NMFCA contains an employee protection provision that prohibits an employer from discharging, demoting, suspending, threatening, harassing, or otherwise discriminating against an employee for lawfully disclosing information regarding or furthering a false claims action against the employer. An employer who violates the employee protection provision is liable to the affected employee for all relief necessary to make the employee whole, including reinstatement with the same seniority status as if the discrimination had not occurred, twice the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees. See N.M. Stat. Ann. § 27-14-12.

The New Mexico Medicaid Fraud Act prohibits a person from: (1) knowingly making or causing to be made a misrepresentation of a material fact required to be furnished under the Medicaid program or knowingly failing or causing the failure to include a material fact required to be furnished under the Medicaid program in any record required to be retained in connection with the Medicaid program, or (2) knowingly submitting or causing to be submitted false or incomplete information for the purpose of receiving benefits or qualifying as a Medicaid provider; or (3) presenting or causing to be presented for allowance or payment any false, fraudulent, excessive, multiple, or incomplete claim for furnishing treatment, services, or goods. Medicaid fraud is a fourth degree felony punishable by fine or imprisonment. See N.M. Stat. Ann. §§ 30-44-1, 30-44-4, 30-44-7. Medicaid fraud also includes executing or conspiring to execute a plan or action to (1) defraud a state or federally funded or mandated managed health care plan in connection with the delivery of or payment for health care benefits, including engaging in any intentionally deceptive marketing practice in connection with proposing, offering, selling, soliciting, or providing any health care service in a state or federally funded or mandated managed health care plan, or (2) obtain by means of false or fraudulent representation of anything of value in connection with the delivery of or payment for health care benefits that are in whole or in part paid for or subsidized by a state or federally funded or mandated managed health care plan, including representations or statements of financial information, enrollment claims, demographic statistics, encounter data, health services available or rendered, or the qualifications of persons rendering health care or ancillary services. Depending upon the value of the benefit, treatment, services, or goods improperly provided, such Medicaid fraud may be a petty misdemeanor, misdemeanor, fourth degree felony, third degree felony, or second degree felony. Such Medicaid fraud is punishable by fine or imprisonment. See N.M. Stat. Ann. § 30-44-7.

The Company takes issues regarding false claims and fraud and abuse seriously.  The Company encourages all employees, management, and contractors or agents of the Company's affiliated facilities to be aware of the laws regarding fraud and abuse and false claims, and to identify and resolve any issues immediately.  Issues are resolved fastest and most effectively when given prompt attention at the local level.  Therefore, the Company encourages its affiliated facilities' employees, managers, and contractors to report concerns to their immediate supervisor, when appropriate.  If the supervisor is not deemed to be the appropriate contact or if the supervisor fails to respond quickly and appropriately to the concern, then the individual with the concern should be encouraged to discuss the situation with the facility's human resources manager, the facility's Ethics and Compliance Officer, another member of management, or with the Ethics Hotline (1-877-508-LIFE).

Employees, including management, and any contractors or agents of Company-affiliated facilities, should be aware of related facility policies regarding detection and prevention of health care fraud and abuse. Information about our policies regarding detection and prevention of fraud and abuse can be accessed on the Company website at https://www.lifepointhealth.net/our-responsibility-to-our-communities and by employees on the intranet at https://lifepoint.policystat.com. In particular, all such employees and contractors should be aware of the contents of the "Code of Conduct" and "Ethics and Compliance" policies and procedures.

PROCEDURE:

Facility responsibilities include, but are not limited, to:

• Ensuring that all employees, including management, and any contractors or agents of the facility, are provided with this policy within 30 days of commencing employment or contractor status. 
  
• Ensuring that this policy is incorporated into employee handbooks distributed to employees.
• Making revisions to this policy as necessary to comply with changes in the law.  Changes must be documented and implemented.

REFERENCES:

N.M. Stat. Ann. §§ 27-14-1, et seq.

N.M. Stat. Ann. §§ 30-44-1, et seq

31 U.S.C. §§ 3801-3812

31 U.S.C. §§ 3729-3733

Deficit Reduction Act of 2005, §§ 6031, 6032

Lifepoint Health Code of Conduct