News & Insights

What is a False Claim?

July 20, 2018

What is a False Claim?

The False Claims Act (FCA) is the government's most powerful and effective tool used to combat fraud.  Notably, more than half of the payments determined to be fraudulent in 2015 under the FCA came from payments related to healthcare.

There are many things that healthcare providers or their office staff do that could potentially result in a False Claims audit or investigation. Not surprisingly, ignorance of the law is no excuse. Practice managers need to understand how the FCA affects their organizations to avoid a violation.

Examples of FCA Violations

  • Upcoding
  • Providing substandard care
  • Failing to return credit balances
  • Inappropriate use of modifiers (25/59)
  • Billing for services performed by an excluded individual
  • Billing for medically unnecessary services
  • Unbundling
  • Waiving copayments and deductibles
  • Billing for a new patient when you should bill for an established patient
  • Charging Medicare patients more than non-Medicare patients for the same service
  • Falsifying medical records to increase payment

What You Can Do

  • Develop and follow a comprehensive compliance plan in your practice
  • Develop and follow a financial policy that addresses coding, billing and adjustments
  • Audit claim forms and medical record documentation proactively and often
  • Work your credit balances regularly
  • Educate and train staff on compliance
  • Ensure staff are comfortable reporting concerns
  • Respond appropriately to potential offenses and develop a robust corrective action plan

Consistently enforced internal controls together with a comprehensive patient financial policy can minimize a practice's risk of violating the FCA. Detailed policies and procedures addressing Revenue Cycle processes are also a key to fraud prevention and a valuable risk-mitigating factor in case of an audit.

To assist our insureds and their practice managers, LAMMICO Practice Solutions provides education, resources and personalized consultation on Revenue Cycle Management. LAMMICO insureds can log in as a Member at to access these complimentary resources. In addition to helping mitigate the risk of false claims, these resources can help optimize your Revenue Cycle.

What if You Have a Problem?

If you or your organization is audited by Medicare or Medicaid, the MeDefense™ Plus/Cyber Liability endorsement on your LAMMICO policy may provide coverage to assist with regulatory fines, penalties and audit expenses (subject to the terms and conditions of your policy). For more information, please contact the LAMMICO Risk Management and Patient Safety Department at 504.841.5211.

This is not legal or financial advice, and is not intended to substitute for individualized business or financial judgment. It does not dictate exclusive methods, and is not applicable to all circumstances.

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