New Meaning of "Fraud"

Did the definition of healthcare fraud change?

Question: Did the definition of healthcare fraud change?

Answer: The short answer is yes. The Federal Enforcement Recovery Act (FERA) was signed into law last year and removes the requirement of intent from the definition of fraud. Under the False Claims Act (FCA) it has always been illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Under the civil FCA, no specific intent to defraud is required. The civil FCA defines "knowing" to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information.

And it's not just about your knowledge of coding and billing. The FCA contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any recoveries. Whistleblowers could be current or ex-business partners, hospital or office staff, patients, or competitors.

There also is a criminal FCA. Criminal penalties for submitting false claims can include imprisonment and criminal fines. Physicians have gone to prison for submitting false healthcare claims. The Office of the Inspector General (OIG) also may impose administrative civil monetary penalties for false or fraudulent claims.

Bill Dacey, CPC, MBA, MHA, is principal in the Dacey Group, a consulting firm dedicated to coding, billing, documentation, and compliance concerns. Dacey is a PMCC-certified instructor and has been active in physician training for more than 20 years. He can be reached at or

This article originally appeared in the February 2011 issue of Physicians Practice.