Section: 4.13
Issued: 12.31.2005
Updated: 8.13.2025
Purpose
The purpose of this policy is to delineate AHRC NYC’s commitment to adhere to all aspects of the False Claims Act including definitions of false claims.
Policy Overview
AHRC NYC is committed to prompt, complete and accurate billing of all services provided to people receiving supports. All supports and services delivered must be medically necessary and of the highest quality. AHRC NYC and its employees, contractors and agents shall not make or submit any false or misleading entries on any bills or claim forms, and no employee, contractor or agent shall engage in any arrangement or participate in such an arrangement at the direction of another person, including any supervisor or manager, that results in such prohibited acts.
AHRC NYC is required to adhere to all relevant Federal, State, and municipal laws and regulations, including but not limited to the NYS Social Services Law (SOS) §363-d, Title 18 of the New York Codes Rules and Regulations (18 NYCRR) Subpart 521-1, and the Deficit Reduction Act of 2005.
Further, it is the policy of AHRC NYC to detect and prevent fraud, waste, and abuse in federal healthcare programs. This Policy pertains to the Federal False Claims Act (31 U.S.C. §§ 3729 – 3733), the Federal Program Fraud Civil Remedies Act (31 USC §§3801-3812), the New York State False Claims Act (State Finance Law §§187-194) and other New York State laws concerning false statements or claims and employee protections against retaliation. This policy also sets forth the procedures we have put into place to prevent any violations of Federal or New York State laws regarding fraud or abuse in its healthcare programs.
Scope
This Policy applies to all employees, including management, and all contractors and agents of AHRC NYC.
Overview of Relevant Laws
Federal False Claims Act (31 U.S.C. §§ 3729 – 3733):
Overview
The False Claims Act is one of the laws the Government uses to prevent and detect fraud, waste, and abuse in federal healthcare programs. The False Claims Act establishes liability for any person who “knowingly” submits a false claim either (1) directly to the Government or (2) to a contractor or grantee of the Government, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest. A violation of the False Claims Act can result in a civil penalty between $14,308 and $28,619 for each false claim submitted, plus up to three times the amount of the damages sustained by the Government due to the violations(s).
The False Claims Act defines “knowingly” to mean that a person:
- Has actual knowledge of the false claim;
- Acts in deliberate ignorance of the truth or falsity of the information; or
- Acts in reckless disregard of the truth or falsity of the information. Specifically, the False Claims Act may be violated by the following acts:
- Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval.
- Knowingly making or using, or causing to be made or used, a false record or statement material to a false claim.
- Conspiring to commit a violation of the False Claims Act.
- Knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money or transmit property to the Government or knowingly concealing or avoiding or decreasing an obligation to pay money or transmit property to the Government.
Applicability
Among other things, the False Claims Act applies to claims submitted for payment by federal healthcare programs, including Medicare and Medicaid.
Examples
A few examples of actions that violate the False Claims Act include knowingly:
- Billing for services that were not actually rendered.
- Charging more than once for the same service.
- Billing for medically unnecessary services.
- Falsifying time records used to bill Medicaid.
Methods of Enforcement
The Government, or an individual citizen acting on behalf of the Government (a “relator”), can bring actions under the False Claims Act. If a relator brings an action under the False Claims Act, the Government has a period of time to investigate the allegations and decide whether to join the lawsuit. If the Government elects to join the lawsuit, the relator is entitled to 15-25% of any recovery. If the Government elects not to join the lawsuit, the relator may still proceed with the action and is entitled up to 30% of any recovery.
Employee Protection
The False Claims Act prohibits discrimination by AHRC NYC against an employee, contractor, or agent for taking lawful actions in furtherance of an action under the False Claims Act. Under the False Claims Act, any employee, contractor, or agent who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts in furtherance of an action under the False Claims Act is entitled to all relief necessary to make the employee, contractor, or agent whole. Such relief may include reinstatement, double back pay, and compensation for any special damages, including litigation costs and attorneys’ fees.
Deficit Reduction Act (DRA, 42 U.S.C § 1396-a(a)(68))
The Deficit Reduction Act (DRA) requires that any entity, as a condition of receiving Medicaid payments shall “(A) establish written policies for all [affected individuals], that provide detailed information about the False Claims Act established under sections 3729 through 3733 of title 31, administrative remedies for false claims and statements established under chapter 38 of title 31, any State laws pertaining to civil or criminal penalties for false claims and statements, and whistleblower protections under such laws, with respect to the role of such laws in preventing and detecting fraud, waste, and abuse in Federal healthcare programs (as defined in section 1320a–7b(f) of the DRA); (B) include as part of such written policies, detailed provisions regarding the entity’s policies and procedures for detecting and preventing fraud, waste, and abuse; and (C) include in any employee handbook for the entity, a specific discussion of the laws described in subparagraph (A), the rights of employees to be protected as whistleblowers, and the entity’s policies and procedures for detecting and preventing fraud, waste, and abuse.”
Federal Program Fraud Civil Remedies Act (31 USC §§3801-3812):
The Program Fraud Civil Remedies Act of 1986 is a federal law that provides for administrative recoveries by federal agencies including the Department of Health and Human Services, which operates the Medicare and Medicaid Programs. The law prohibits the submission of a claim or written statement that the person knows or has reason to know is false, contains false information or omits material information. Violations of this law are investigated by the Department of Health and Human Services and monetary sanctions may be imposed in an administrative hearing setting. Monetary sanctions may include penalties of up to $14,308 per claim and damages of twice the amount of the original claim.
New York State False Claims Act (State Finance Law §§187-194):
New York State False Claims Act was modeled after the Federal False Claims Act and its provisions are very similar. This Act provides that anyone who “knowingly” submits false claims to the Government is liable for damages up to three times the amount of the erroneous payment plus mandatory penalties between $6,000 and $12,000 for each false claim submitted.
The False Claims Act defines “knowingly” to mean that a person:
- Has actual knowledge of the false claim.
- Acts in deliberate ignorance of the truth or falsity of the information.
- Acts in reckless disregard of the truth or falsity of the information.
The City, or an individual citizen acting on behalf of the City (a “relator”), can bring actions under the New York City False Claims Act. In addition, the New York City False Claims Act prohibits discrimination against an employee for taking lawful actions in furtherance of an action under the Act. Any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the False Claims Act is entitled to all relief necessary to make the employee whole.
New York City False Claims Act (New York City Administrative Code §§ 7-801-7-810):
New York City False Claims Act was modeled after the State False Claims Act and its provisions are similar. This Act provides that anyone who “knowingly” submits false claims to the Government is liable for damages up to three times the amount of the erroneous payment plus mandatory penalties between $5,000 and $15,000 for each false claim submitted.
The False Claims Act defines “knowingly” to mean that a person:
- Has actual knowledge of the false claim.
- Acts in deliberate ignorance of the truth or falsity of the information.
- Acts in reckless disregard of the truth or falsity of the information.
The City, or an individual citizen acting on behalf of the City (a “relator”), can bring actions under the New York City False Claims Act. In addition, the New York City False Claims Act prohibits discrimination against an employee for taking lawful actions in furtherance of an action under the Act. Any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the False Claims Act is entitled to all relief necessary to make the employee whole.
Social Service Law §145-b:
Under this section it is unlawful to knowingly make a false statement or representation, or to deliberately conceal any material fact, or engage in any other fraudulent scheme or device, to obtain or attempt to obtain payments under the New York State Medicaid program. In the event of a violation of this law, the local Social Services district or the State has a right to recover civil damages equal to three times the amount of the incorrectly paid claim. Under Section 145-b the New York State Department of Health may impose a civil monetary penalty, ranging from $10,000 to $30,000 per item depending on prior violations, as restitution to the Medical Assistance Program.
Social Service Law §145-c:
Under this section, if any person individually or as a member of a family applies for or receives public assistance, including Medicaid, by intentionally making a false or misleading statement, or intending to do so, then the needs of that person shall not be taken into account for determining the needs of that person or those of their family: (1) for a period of 6 months if a first offense; (2) for a period of 12 months if a second offense, or upon an offense which resulted in the wrongful receipt of benefits in an amount of between $1000 and $3900 and (3) for a period of 18 months if a third offense or upon an offense which resulted in the wrongful receipt of benefits in excess of $3900 and five years for any subsequent occasion of any offense.
Social Service Law §145:
Under this section, any person who submits false statements or deliberately conceals material information in order to receive public assistance, including Medicaid, is guilty of a misdemeanor. That crime is punishable by fines and by imprisonment up to one year.
Social Service Law § 366-b:
Under this section any person who, with intent to defraud, presents for payment any false or fraudulent claim for services or merchandise, or knowingly submits false information for the purpose of obtaining compensation greater than that to which they are legally entitled to shall be guilty of a Class A misdemeanor.
Penal Law Article 155:
Under this Article, 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 similar behavior. This Article has been applied to Medicaid fraud cases. This crime is punishable by fines and imprisonment up to twenty-five years.
Penal Law Article 175:
Under this Article, four crimes relating to falsifying business records or filing a false instrument have been applied in Medicaid fraud prosecutions. These crimes are punishable by fines and imprisonment up to four years.
Penal Law Article 176:
This Article establishes the crime of insurance fraud. A person commits such a crime when they intentionally file a health insurance claim, including Medicaid, knowing that it is false. This crime is punishable by fines and imprisonment up to twenty-five years.
Penal Law Article 177:
This Article establishes the crime of healthcare fraud. A person commits such a crime when, with the intent to defraud Medicaid (or other health plans, including non-governmental plans), they knowingly and willfully provide false information or omit material information for the purpose of requesting payment for a healthcare item or service and, as a result of the false information or omission, receives such a payment in an amount to which they are not entitled. Healthcare fraud is punished with fines and jail time based on the amount of payment inappropriately received due to the commission of the crime.
Procedure
General Principles
AHRC NYC has an established compliance program in which the Chief Compliance Officer/VP Corporate Compliance is responsible for the day to day operation as documented in the Corporate Compliance section of the Policy Manual.
AHRC NYC must provide training to all its employees regarding this Policy and will share this Policy with all contractors and agents.
Billing activities must be performed in a manner consistent with Medicare, Medicaid and other payer regulations and requirements and in accordance with AHRC NYC’s documentation/billing policies.
To assist in its efforts to detect and prevent fraud, waste, and abuse, AHRC NYC conducts regular audit and monitoring procedures.
Reporting Non-Compliance
If an AHRC NYC employee, contractor or agent has any reason to believe that anyone is engaging in false billing practices, that person must immediately report the practice in accordance with our policy on reporting potential compliance concerns. Concerns should be brought to AHRC NYC’s Chief Compliance Officer/VP Corporate Compliance by calling AHRC NYC’s Compliance Hotline at 212-780-4485 or by submitting an online Compliance Violation Report (https://www.ahrcnyc.org/compliance-practices/submit-a-compliance-violation-report/).
AHRC NYC will respond appropriately to investigate and remedy any possible violations of law, regulations, and the agency’s Corporate Compliance policies to protect the interest of the agency and the individuals we are dedicated to supporting and serving.
Non-Retaliation & Non-intimidation
AHRC NYC will not intimidate any employee into not reporting any compliance related concern to any government entity nor will it retaliate against any employee for taking any lawful action under the False Claims Act. Moreover, we will not retaliate against any employee, volunteer, contractor, or agent for reporting in good faith any potential compliance concern, as described in our anti-retaliation and anti-intimidation policy.
Employee Handbooks and Contractor Agreements
The tenets of this policy will be included in employee handbooks and attached to all contracts with outside contractors or agents.