Fraud, Waste and Abuse (FWA)

CareSource is required to prevent, identify, investigate, correct and report (FWA).  As a CareSource FDR, you share these same responsibilities and requirements.  In order for you to be able to carry out these duties, we are providing the following list as examples of Fraud, Waste, and Abuse.  Please note that this list is in no way complete and should not be considered a definitive list of FWA.  If you have any questions or concerns you can contact CareSource for further information at:

    • Fraud Hotline: 1-800-488-0134 (Follow the prompts for reporting Fraud)
    • Written Report: Use the Fraud, Waste and Abuse Reporting Form on www.caresource.com or write a letter and send to:

CareSource
Attn:  Special Investigations Unit
P.O. Box 1940
Dayton, OH 45401-1940

Options for reporting that are not anonymous:

Fraud Waste and Abuse can be witnessed at all levels of an organization.

Below are some examples of fraud, waste and abuse. If you have any questions about these examples or Fraud, Waste and Abuse in general, please send an email to: Fraud@CareSource.com.

Provider:

  • Billing for non-covered, medically unnecessary services and prescription drugs
  • Up-coding CPT, HCPCS and DRG codes to obtain a higher rate of reimbursement
  • Separating and billing the individual components of a medical service rather than correctly billing with an all-inclusive procedure code – also known as “unbundling”
  • Inappropriate use of CPT codes and/or modifiers to seek higher reimbursement
  • Not checking a member’s identification card, resulting in claims submitted for non-covered persons
  • Billing for services not rendered
  • Balance billing of Medicaid members for any balance owed after CareSource has paid the approved state fee for services rendered
  • Retaining payments made in error by CareSource
  • Payments stemming from kickbacks or Federal Stark Law violations
  • Duplicate payments for services

Member:

  • Inappropriate use of Medicaid/Medicare purchased narcotics
  • Forging prescriptions to obtain controlled substances
  • Sharing CareSource ID cards with nonmembers
  • Submitting fraudulent Babies First Coupons for prenatal and well-baby visits (Medicaid Only)
  • Misusing ID card
  • Submitting false information

Pharmacy:

  • Dispensing prescription drugs inconsistent with the order
  • Submitting claims for a more expensive brand drug when a less expensive generic prescription is dispensed
  • Dispensing less than the prescribed quantity without arranging for the additional medication to be received with no additional dispensing fees
  • Splitting prescriptions into two orders to seek higher reimbursement
  • Dispensing expired, fake, diluted, tainted or illegal drugs
  • Billing for prescriptions not filled or picked up

Company/Employee/Delegated Entities:

  • Embezzling CareSource funds
  • Misappropriation of CareSource assets
  • Stealing CareSource property
  • Falsifying CareSource business data and reports
  • Receiving gifts or kickbacks from vendors for goods or services
  • Preventing members from accessing covered services resulting in underutilization of services offered
  • Altering/destroying member materials, medical records, etc.
  • Backdating forms

The Federal False Claims Act:

Using the False Claims Act (the Act), you can help reduce fraud against the federal government. The Act allows everyday people to bring “whistleblower” lawsuits on behalf of the government known as “qui tam” suits against businesses or other individuals that are defrauding the government through programs, agencies, or contracts.

The False Claims Act applies when a company or person:

  • Knowingly presents or causes to be presented, a false or fraudulent claim for payment or approval.
  • Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.
  • Conspires to commit a violation of any other section of the False Claims Act.
  • Has possession, custody, or control of property or money used, or to be used, by the government and knowingly delivers, or causes to be delivered, less than all of that money or property.
  • Is authorized to make or deliver a document certifying a receipt of property used, or to be used by the government, and intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true.
  • Knowingly buys or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, or a member of the Armed Forces, who lawfully may not sell or pledge property; or
  • Knowingly makes, used, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government, or knowingly conceals or improperly avoids or decreases an obligation to pay or transmit money or property to the government.

“Knowingly” means acting with actual knowledge or with reckless disregard or deliberate indifference to the truth or falsity of information.

The time period for a claim to be brought under the False Claims Act is the later of:

  • Within six years from the date of the illegal conduct, or
  • Within three years after the date the Government knows or should have known about the illegal conduct, but in no event later than ten years after the illegal activity.

There are significant penalties for violating the False Claims Act. Civil penalties include fines for each false claim and may be tripled. In addition to civil penalties, courts can also impose criminal penalties.

Ohio Law:

While Ohio has not passed its own false claims statute, there may nevertheless be liability under various Ohio laws regarding false or fraudulent claims with respect to Medicaid/Medicare program expenditures, including:

  • Medicaid Fraud (Ohio Revised Code Section 2913.40)
  • Medicaid Eligibility Fraud (Ohio Revised Code Section 2913.401)
  • Falsification (Ohio Revised Code Section 2921.13)
  • Offenses by Medicaid Providers (Ohio Revised Code Section 5164.35)

Kentucky Law:

Kentucky has not enacted a false claims statute with a qui tam provision comparable to the federal False Claims Act. However, Kentucky law does permit the Kentucky Attorney General to prosecute any individual or entity that:

  • knowingly or wantonly devises a scheme or plan a scheme or artifice, or enters into an agreement, combination, or conspiracy to obtain or aid another in obtaining payments from any medical assistance program by means of any fictitious, false, or fraudulent application, claim, report, or document submitted to the Cabinet for Health and Family Services, or intentionally engages in conduct which advances the scheme or artifice;
  • intentionally, knowingly, or wantonly makes, presents, or causes to be made or presented to an employee or officer of the Cabinet for Health and Family Services any false, fictitious, or fraudulent statement, representation, or entry in any application, claim, report, or document used in determining rights to any benefit or payment;
  • with intent to defraud, knowingly makes, or induces, or seeks to induce the making of a false statement or false representation of a material fact with respect to the conditions or operations of an institution or facility in order that the institution or facility may qualify, upon initial certification or upon recertification, as a hospital, skilled-nursing facility, intermediate-care facility, home-health agency, or other provider of services to the Medical Assistance Program; or
  • knowingly falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious, or fraudulent statement or representation, or makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry.

The complete set of Kentucky laws governing Medicaid fraud and abuse may be found at Kentucky Revised Statutes §§ 205.8451-205.8483.

Indiana Law:

Indiana has enacted a false claims statute that meets the requirements of Section 1909 of the Social Security Act. Section 1909 provides a financial incentive for a State to enact a false claims statute that is at least as effective in rewarding and facilitating qui tam actions for false claims as those described in the Federal False Claims Act.

Indiana’s False Claims and Whistleblower Protection Act applies to any individual or entity that knowingly or intentionally:

  • presents a false claim to the state for payment or approval;
  • makes or uses a false record or statement to obtain payment or approval of a false claim from the state;
  • with intent to defraud the state, delivers less money or property to the state than the amount recorded on the certificate or receipt the person receives from the state;
  • with intent to defraud the state, authorizes issuance of a receipt without knowing that the information on the receipt is true;
  • receives public property as a pledge of an obligation on a debt from an employee who is not lawfully authorized to sell or pledge the property;
  • makes or uses a false record or statement to avoid an obligation to pay or transmit property to the state;
  • conspires with another person to commit a violation of any other section of the statute; or
  • causes or induces another person to violate any other section of the statute.

Indiana’s False Claims and Whistleblower Protection Act may be found at Indiana Code 5-11- 5.5-1, et seq.

Georgia Law:

Georgia has enacted a false claims statute that meets the requirements of Section 1909 of the Social Security Act. Section 1909 provides a financial incentive for a State to enact a false claims statute that is at least as effective in rewarding and facilitating qui tam actions for false claims as those described in the Federal False Claims Act.

Georgia’s Taxpayer Protection Against False Claims statute applies to any individual or entity that:

  • Knowingly presents or causes to be presented to the Georgia Medicaid Program a false or fraudulent claim for payment or approval;
  • Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim;
  • Conspires to commit a violation of any other section of the statute;
  • Has possession, custody, or control of property or money used, or to be used, by the Georgia Medicaid Program and knowingly delivers, or causes to be delivered, less than all of that money or property;
  • Is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Georgia Medicaid Program and, intending to defraud the state or local government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
  • Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Georgia Medicaid Program who lawfully may not sell or pledge the property; or
  • Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state or local government, or knowingly conceals, knowingly and improperly avoids, or decreases an obligation to pay or transmit money or property to the Georgia Medicaid Program Georgia’s Taxpayer Protection Against False Claims statute may be found at Georgia Code 23-3-120, et seq.

West Virginia Law:

West Virginia has not enacted a false claims statute with a qui tam provision comparable to the federal False Claims Act. However, West Virginia law does permit the West Virginia Attorney General to prosecute any individual or entity that:

  • Solicits, offers, pays or receives any unlawful remuneration, including any kickback, rebate or bribe, directly or indirectly, with the intent of causing an expenditure of moneys from the medical services fund;
  • Makes or presents or causes to be made or presented to the Department of Health and Human Resources a claim under the medical programs of the Department of Health and Human Resources knowing the claim to be false, fraudulent or fictitious; or;
  • Enters into an agreement, combination or conspiracy to obtain or aid another to obtain the payment or allowance of a false, fraudulent or fictitious claim under the medical programs of the Department of Health and Human Resources.

The complete set of West Virginia laws governing Medicaid fraud and abuse may be found at West Virginia code § 9-7-1, et seq.

Iowa Law:

Under the Iowa False Claims Act (IFCA), IA Code §§ 685.1 et seq., it is a crime to submit false claims for payment to a government program. The IFCA enables private citizens with knowledge of fraud to file a claim on behalf of the government, protects whistleblowers from employer retaliation in response to reporting fraud, and pays significant cash whistleblower awards for information leading to successful recovery.

Under the IFCA, it is a crime to:

  • Knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval.
  • Knowingly make, use, or cause to be made or used, a false record or statement material to a false or fraudulent claim.
  • Conspire to commit a violation of the IFCA
  • Have 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.
  • Intending to defraud the state, make or deliver a receipt without completely knowing that the information on the receipt is true.
  • Knowingly buy, or receive as a pledge of an obligation or debt, public property from an officer or employee of the state, or a member of the Iowa national guard, who lawfully may not sell or pledge property.
  • Knowingly make, use, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the state, or knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the state.

“Knowing” or “knowingly” means that a person:

  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.

“Knowing” or “knowingly” does not require proof of specific intent to defraud.

North Carolina Law:

The North Carolina False Claims Act–N.C.G.S §§1-605 through 617 states that any party shall be liable to the State for up to three times the amount of damages that the State sustains from any person who:

  1. Knowingly presents or causes to be presented 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 material to a false or fraudulent claim.
  3. Conspires to commit a violation of subdivision
  4. Has possession, custody, or control of property or money used or to be used by the State and knowingly delivers or causes to be delivered less than all of that money or property.
  5. Is 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, makes or delivers the receipt without completely knowing that the information on the receipt is true.
  6. Knowingly buys, or receives as a pledge of an obligation or debt, public property from any officer or employee of the State who lawfully may not sell or pledge the property.
  7. Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the State, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the State.

Mississippi Law:

The State of Mississippi does not have a state False Claims Act (FCA), but the activity that constitutes fraud against Mississippi Medicaid often is in violation of the federal FCA. This activity may include:

  • Presenting false or fraudulent claims to Medicaid for payment
  • Making or using a false statement regarding a false claim
  • Conspiring to violate the federal FCA
  • Knowingly misusing, wasting or abusing government funds
  • Billing for services never provided, substandard quality care or upcoding
  • Making inappropriate payment arrangements or providing kickbacks in exchange for patient referrals
  • Withholding, misrepresenting or altering medical, expense or other records in an attempt for financial gain

The State of Mississippi utilizes the federal False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, to govern Mississippi Medicaid fraud.

Arkansas Law:

Arkansas has enacted a false claims statute via 20-77-9 of the Arkansas code. Arkansas state law does not contain provisions that allow qui tam actions to bring a false claims lawsuit on behalf of the state, however individuals who report fraud to the Arkansas Attorney General are eligible receive up to 10% of the total amount recovered up to $100,000. The Arkansas Medicaid Fraud False Claims Act and the Arkansas Medicaid Fraud Act protect individuals who provide records to the state from civil or criminal liability.

Arkansas Medicaid Fraud False Claims Act applies to any individual who knowingly or intentionally:

  1. Knowingly make false statements or conceal relevant knowledge related to any benefit for payment under the Arkansas Medicaid Program
  2. Submit a claim to receive any benefit or payment for the use and benefit of another person and having received it, knowingly coverts the benefit or payment for use and benefit of the other person
  3. Knowingly presents a claim for a physician’s service for which payment may be made under the AR Medicaid program and knows that the individual who furnished the services was not licensed as a physician
  4. Knowingly charging at a rate in excess of the rates established by the state or as a precondition of admission or continued stay; or Charges, solicits, accepts, or receives, in addition to any amount otherwise required to be paid under the Arkansas Medicaid Program, any gift, money, donation, or other consideration other than a charitable, religious, or philanthropic contribution from an organization or from a person unrelated to the patient: (i) As a precondition of admitting a patient to a hospital, nursing facility, or intermediate care facility for individuals with intellectual disabilities; or (ii) As a requirement for the patient’s continued stay in a hospital, nursing facility, or intermediate care facility for individuals with intellectual disabilities when the cost of the services provided in the hospital, nursing facility, or intermediate care facility for individuals with intellectual disabilities to the patient is paid for in whole or in part under the Arkansas Medicaid Program;
  5. Knowingly participating in the state Medicaid program after having pleading guilty or found guilty of a charge of Medicaid fraud, theft of public benefits, or abuse of adults as defined in the AR Criminal Code 5-1-101 et seq
  6. Knowingly forges the signature of a doctor or nurse on a prescription or referral for healthcare goods or services or submits a forged prescription or referral in support of a claim for payment under the program
  7. Knowingly places a false entry in a medical chart or medical record that indicates that healthcare goods or services were provided to a Medicaid recipient knowing that the healthcare goods or services were not provided.
  8. Purposely makes or causes to be made any omission or false statement or representation of a material fact in any claim, request for payment, or application for any benefit or payment under the Arkansas Medicaid Program;
  9. Purposely presents or causes to be presented a claim for a service required to be provided by a person with a particular type of license or credential while knowing that the individual who furnished the service was not licensed or credentialed;
  10. Purposely solicits or receives any remuneration, including any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind:

(i) In return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under the Arkansas Medicaid Program; or

(ii) In return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under the Arkansas Medicaid Program;

  1. Purposely offers or pays any remuneration, including any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, to any person to induce that person to:

(i) Refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under the Arkansas Medicaid Program; or

(ii) Purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under the Arkansas Medicaid Program;

  1. Purposely makes or causes to be made, or induces or seeks to induce, any omission or false statement or representation of a material fact with respect to the conditions or operation of any institution, facility, or Medicaid provider in order that the institution, facility, or Medicaid provider may qualify to obtain or maintain any licensure or certification when the licensure or certification is required to be enrolled or eligible to deliver any healthcare goods or services to Medicaid recipients by state law, federal law, or the rules of the Arkansas Medicaid Program;
  2. Knowingly submits false documentation or makes or causes to be made or induces or seeks to induce any material false statement to the Office of Medicaid Inspector General or the Medicaid Fraud Control Unit within the office of the Attorney General during an audit or in response to a request for information or a subpoena;

Fraud, Waste and Abuse Reporting Process:

It is CareSource’s policy to detect and prevent any activity that may constitute fraud, waste or abuse, including violations of the Federal False Claims Act or any other federal or state fraud laws.  If you have knowledge or information that any such activity may be or has taken place, please contact our Special Investigations Unit using the contact information in this letter.  Information may be reported anonymously.

Your organization must emphasize non-retaliation and non-intimidation for good-faith reporting of allegations of noncompliance and potential fraud, waste and abuse.  You must have one or more methods to anonymously report noncompliance and fraud, waste and abuse to CareSource, and these methods must be widely publicized and available to employees 24 hours per day, seven days per week.  Your organization should have a system in place to receive, record, respond and track issues of this nature.

Options for reporting anonymously:

    • Fraud Hotline: 1-800-488-0134 (Follow the prompts for reporting Fraud)
    • Written Report: Use the Fraud, Waste and Abuse Reporting Form on www.caresource.com or write a letter and send to:

CareSource
Attn:  Special Investigations Unit
P.O. Box 1940
Dayton, OH 45401-1940

Options for reporting that are not anonymous:

Protections for Reporters of Fraud, Waste and Abuse:  

Federal and state law and CareSource’s policy prohibit any retaliation or retribution against persons who report suspected violations of these laws to law enforcement officials or who file “whistleblower” lawsuits on behalf of the government.  Anyone who believes that he or she has been subject to any such retribution or retaliation should also report this to the Special Investigations Unit using the contact information in this letter.

Federal and State False Claims Acts and our Fraud, Waste and Abuse reporting mechanisms can also be found on our website, www.caresource.com.

Other Fraud, Waste and Abuse Laws:

  • Under the Federal Anti-Kickback Statute, and subject to certain exceptions, it is a crime for anyone to knowingly and willfully solicit or receive, or pay anything of value, including a kickback, bribe or rebate in return for referring an individual to a person for any item or service for which payment may be made in whole or in part under a federal health care program. 42 U.S.C §1320a-7b.
  • Under the Federal Stark Law, and subject to certain exceptions, physicians are prohibited from referring federal health care program patients for certain designated health services to an entity with which the physician or an immediate family member has a financial relationship. The Stark Law imposes specific reporting requirements on entities that receive payment for services covered by federal health care programs. 42 U.S.C §1395(a) and 1903(s).