Federal Laws/Administrative Remedies for False Claims

(31 U.S.C. §§ 3801-3812)/New York State Laws/Civil and Administrative Laws/Criminal Laws/Whistleblower Protection

  • False Claim Act (31 U.S.C. §§ 3729-3733)
  • Administrative Remedies for False Claims (31 U.S.C. §§ 3801-3812)

Administrative Remedies for False Claims (31 U.S.C. §§ 3801-3812)

This statute allows for administrative recoveries by federal agencies. If a person submits a claim that the person knows or has reason to know is false or contains false information, or omits material information, then the agency receiving the claim may impose a penalty of up to $5,000 for each claim. The agency also may recover twice the amount of the claim.

Unlike the FCA, the determination of whether a claim is false, and the imposition of fines and penalties is made by the administrative agency, not by litigation through the federal court system. Also, unlike the FCA, a violation of this law occurs when a false claim is submitted, rather than when it is paid. To view the law in its entirety, see 31 U.S. Code Chapter 38 - Administrative Remedies For False Claims and Statements.

New York State Laws

New York’s false claims laws fall into two categories: civil/administrative laws, and criminal laws. Some apply to recipient false claims and some apply to provider false claims. While most are specific to healthcare or Medicaid, some of the “common law” crimes apply to areas of interaction with the government.

Civil and Administrative Laws

New York False Claim Act (State Finance Law, §§ 187-194)

The New York False Claims Act is similar to the Federal False Claims Act. It imposes penalties and fines on individuals and entities that knowingly file false or fraudulent claims for payment from the State or a local government, including health care programs such as Medicaid. The penalty for filing a false claim is $6,000 - $12,000 per claim plus three times the amount of all damages that the state or local government sustains because of the act of the person. In addition, a person who knowingly files false claims may be required to pay the government’s legal fees.

As in federal False Claim Act cases, the New York False Claims Act allows private individuals to file lawsuits in State court on behalf of the people of the State or a local government. If the suit eventually concludes with payments back to the government, the person who started the case can recover 25 – 30% of the proceeds if the government did not participate in the suit, and 15-25% of the proceeds if the government did participate in the suit.

Social Services Law § 145-b False Statements

It is a violation to knowingly obtain or attempt to obtain payment for items or services furnished under any Social Services program, including Medicaid, by use of a false statement, deliberate concealment or other fraudulent scheme or device. The State or the local Social Services district may recover three times the amount incorrectly paid. In addition, the Department of Health may impose a civil penalty of up to $10,000 per violation. If repeat violations occur within five years, a penalty of up to $30,000 per violation may be imposed if the repeat violations involve more serious violations of Medicaid rules, billing for services not rendered, or providing excessive services.

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 needs or that of his or her family shall not be taken into account for the purpose of determining his or her needs or that of his or her family for six months if a first offense; 12 months if a second offense (or if benefits wrongfully received are at least $1,000, but not more than $3,900); 18 months if a third offense (or if benefits wrongfully received exceed $3,900); and five years for any subsequent occasion of any such offense.

Executive Law § 63 (12)

If a person engages in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in carrying on, conducting or transacting business, the attorney general may apply, in the name of the people of the state of New York, to the supreme court of the state of New York, on notice of five days, for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, and directing restitution and damages, and the court may award the relief applied for or so much thereof as it may deem proper. The word “fraud” or Fraudulent” as used in this statute includes any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions. The term “persistent fraud” or “illegality” as used in this law includes continuance or carrying on of any fraudulent or illegal act or conduct. The term “repeated” as used in this law includes the repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person.

New York State Executive Law [§631(13)]

This law provides for direct reimbursement by OVS to providers of sexual assault forensic examination services. These provisions protect the privacy and safety of sexual assault victims, while reimbursing providers when the victim does not have access to health insurance or chooses not to use health insurance to pay for the forensic examination. It is the responsibility of the provider to distribute the OVS Forensic Rape Examination Direct Reimbursement claim form to every sexual assault victim and to discuss the billing option available to them through this program, as outlined in Section Three of the claim form. When a victim opts for this method of billing, the hospital or licensed health care provider must seek reimbursement from OVS and accept this reimbursement fee as payment in full for FRE services. For more information, please visit the NY State Office of Victim Services.

Civil and Administrative Laws

New York False Claim Act (State Finance Law, §§ 187-194)

The New York False Claims Act is similar to the Federal False Claims Act. It imposes penalties and fines on individuals and entities that knowingly file false or fraudulent claims for payment from the State or a local government, including health care programs such as Medicaid. The penalty for filing a false claim is $6,000 - $12,000 per claim plus three times the amount of all damages that the state or local government sustains because of the act of the person. In addition, a person who knowingly files false claims may be required to pay the government’s legal fees.

As in federal False Claim Act cases, the New York False Claims Act allows private individuals to file lawsuits in State court on behalf of the people of the State or a local government. If the suit eventually concludes with payments back to the government, the person who started the case can recover 25 – 30% of the proceeds if the government did not participate in the suit, and 15-25% of the proceeds if the government did participate in the suit.

Social Services Law § 145-b False Statements

It is a violation to knowingly obtain or attempt to obtain payment for items or services furnished under any Social Services program, including Medicaid, by use of a false statement, deliberate concealment or other fraudulent scheme or device. The State or the local Social Services district may recover three times the amount incorrectly paid. In addition, the Department of Health may impose a civil penalty of up to $10,000 per violation. If repeat violations occur within five years, a penalty of up to $30,000 per violation may be imposed if the repeat violations involve more serious violations of Medicaid rules, billing for services not rendered, or providing excessive services.

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 needs or that of his or her family shall not be taken into account for the purpose of determining his or her needs or that of his or her family for six months if a first offense; 12 months if a second offense (or if benefits wrongfully received are at least $1,000, but not more than $3,900); 18 months if a third offense (or if benefits wrongfully received exceed $3,900); and five years for any subsequent occasion of any such offense.

Executive Law § 63 (12)

If a person engages in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in carrying on, conducting or transacting business, the attorney general may apply, in the name of the people of the state of New York, to the supreme court of the state of New York, on notice of five days, for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, and directing restitution and damages, and the court may award the relief applied for or so much thereof as it may deem proper. The word “fraud” or Fraudulent” as used in this statute includes any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions. The term “persistent fraud” or “illegality” as used in this law includes continuance or carrying on of any fraudulent or illegal act or conduct. The term “repeated” as used in this law includes the repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person.

New York State Executive Law [§631(13)]

This law provides for direct reimbursement by OVS to providers of sexual assault forensic examination services. These provisions protect the privacy and safety of sexual assault victims, while reimbursing providers when the victim does not have access to health insurance or chooses not to use health insurance to pay for the forensic examination. It is the responsibility of the provider to distribute the OVS Forensic Rape Examination Direct Reimbursement claim form to every sexual assault victim and to discuss the billing option available to them through this program, as outlined in Section Three of the claim form. When a victim opts for this method of billing, the hospital or licensed health care provider must seek reimbursement from OVS and accept this reimbursement fee as payment in full for FRE services. For more information, please visit the NY State Office of Victim Services.

Whistleblower Protection

Federal False Claims Act (31 U.S.C. § 3730(h))

The Federal False Claims Act 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 employment by their employers because of lawful acts in furtherance of an action under the FCA or efforts to stop violations of the FCA. Remedies include reinstatement with the same seniority status the employee 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 New York False Claims 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, or otherwise harmed or penalized by their employers because of lawful acts in furtherance of an action under the Act. Remedies include an injunction to restrain continued discrimination; reinstatement to the position the employee would have held but for the discrimination or to an equivalent position; reinstatement of full fringe benefits and seniority rights; payment of two times any back pay, plus interest; 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
(Prohibition against retaliatory action by employers)

An employer may not take any retaliatory personnel action against an employee because the employee discloses or threatens to disclose certain information about the employer’s policies, practices, or activities to a regulatory, law enforcement or other similar agency or public official. Protected disclosures are those that assert that the employer is in violation of a law, rule or regulation, and that the violation creates a substantial and specific danger to the public health and safety or constitutes health care fraud under Penal Law § 177 (see above). The employee’s disclosure is protected only if the employee first brought the policy, practice, or activity to the attention of a supervisor and gave the employer a reasonable opportunity to correct the activity, policy, or practice. If an employer takes a retaliatory action against the employee, the employee may sue in State court for reinstatement to the same or an equivalent position, any lost back wages and benefits and attorneys’ fees. If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, the court may impose a civil penalty of $10,000 on the employer.

New York Labor Law § 741
(Prohibition; health care employer who penalizes employees because of complaints of employer violations)

A health care employer may not take any retaliatory action against an employee because the employee discloses or threatens to disclose certain information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official. Protected disclosures are those concerning an employer policy, practice, or activity that the employee, in good faith, reasonably believes constitutes improper quality of patient care. The employee’s disclosure is protected only if the employee first brought the alleged improper quality of patient care to the attention of a supervisor and gave the employer a reasonable opportunity to correct the activity, policy, or practice, unless there is an imminent threat to public health or safety or to the health of a specific patient and the employee reasonably believes in good faith that reporting to a supervisor would not result in corrective action. If an employer takes a retaliatory action against the employee, the employee may sue in State court for reinstatement to the same or an equivalent position, any lost back wages and benefits and attorneys’ fees. If the court finds that a health care employer’s retaliatory action was in bad faith, the court may impose a civil penalty of $10,000 on the employer.

 

Office for Billing Compliance
Policy#: 10041
Original Date of Issue: 1996
Revised: 3/22/2023
Reviewed: 3/1/2024