| David S. Barmak, Esq. |
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Licensed to practice law in the States of New Jersey, New York and Connecticut.
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| Attention Administrators:
New Jersey False Claims Act has passed! |
On January 13, 2008, the NJ Legislature passed, and Gov. Corzine signed, the New Jersey False Claims Act modeled on the federal False Claims Act, including the latter's whistleblower provisions. The passage of this bill, which has an effective date of 60 days from the date of its passage, has significant ramifications for all healthcare facilities that receive Medicaid funds as well as those healthcare providers / suppliers that receive any New Jersey funds such as reimbursement for services provided to New Jersey employees. Last year alone, the Department of Justice recovered $20 billion under the federal act.
Awareness of this new law should make every healthcare facility and professional practice consider instituting or reviewing its compliance program since the law opens the door to whistleblowers who may be any of these:
- Employees
- Residents
- Family members of residents
- Vendors
- Contract agencies (e.g.; therapists, nurses, etc.)
- Anyone else with information regarding reimbursement from the State of New Jersey that is based upon misrepresentations
The most typical false-claim suit involves Medicaid and Medicare overcharges and/or substandard quality of care. Typical "Qui Tam" (i.e.; whistleblower) plaintiffs are employees of the health care facility.
- A suit under the law can seek treble damages and penalties of up to $10,000 per violation, plus legal fees.
- Liability is based on knowingly submitting a false claim, conspiring or participating in the false claim, issuing or delivering false receipts for state property and other dishonest dealings.
- Specific intent to defraud is not required. Acting with deliberate ignorance or reckless disregard of truth or falsity suffices. Innocent mistake and mere negligence are defenses.
- A whistleblower must serve a copy of the complaint on the attorney general and allow the state 60 days to decide whether to intervene and take on primary responsibility, allow the whistleblower to pursue it alone or move to dismiss it.
- With the attorney general in the case, the court can allocate 15 percent to 25 percent of the proceeds to the whistleblower, rising to 25 percent to 30 percent when the plaintiff acts alone.
- Defendants can recover legal fees from whistleblowers for frivolous claims.
- The limitations period is six years, or three years after the material facts should reasonably have been known, with a 10-year absolute cutoff.
- Protection from retaliation is available for employees who file false-claims actions or assist with them.
For skilled nursing facilities, the stakes are very high to develop and implement a fraud and abuse compliance program, given the number of Medicaid claims submitted by these facilities. An effective compliance program shows a good faith intent to adhere to laws and regulations thereby maximizing a facility's ability to persuade state authorities that a mistake is just that, a mistake, and not evidence of an intent to do wrong. As a minimal call to action, I would urge you to contact my office so that I can help you evaluate the status of your compliance program and suggest any remediation that may be necessary to avoid the potential effect of this new law.▪ |
| Violence Prevention in Health Care Facilities Act |
On January 3, 2008, Governor Corzine signed into law the Violence Prevention in Health Care Facilities Act ("Act"). The law directs nursing homes, among other health care facilities in New Jersey, to create programs to address physical violence or credible threats of violence against employees. Every nursing home, within six (6) months, must establish a violence prevention committee. At least 50% of the members must be direct patient care workers. Within eighteen (18) months, each nursing home must have developed and maintained a written violence prevention plan. Workplace risks must be identified and addressed. In addition, the violence prevention plan must specifically identify methods to reduce the risks of violence against employees. If you need assistance in complying with this new law, please contact my office. |
| Accounts Receivable Risk Management |
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Healthcare providers must be scrupulous about fully complying with a myriad of consumer and collection laws that affect billing and collections. A healthcare provider's policies and procedures must be in conformity with such laws and the provider must ensure that all third parties acting on its behalf, e.g., collection agencies or collection law firms, comply with such laws.Ultimately the healthcare provider is responsible for all billing and collection efforts made on its behalf. The following is a sampling of the most important laws affecting billing and collections:
Fair Debt Collection Act
The Act governs the do's and don'ts that pertain to collection activities of third parties that collect outstanding accounts receivable for a healthcare provider.
Truth In Lending Consumer Credit Cost Disclosure or Federal Reserve Regulation Z
The basic purpose of this regulation is to require disclosure of all direct and indirect costs, terms and conditions relating to the granting of credit. This consumer protection law requires credit granters (e.g.; healthcare providers) to notify borrowers (e.g.; patients) up front how much credit will cost them.
Fair Credit Reporting Act
The basic purpose of this law is to protect consumers from those businesses that issue or use reports on consumers in connection with the approval of credit. This law provides protection of consumers' rights to privacy and limits the use of credit reports.
Fair Credit Billing Act
The basic purpose of this law is to protect consumers from erroneous billing. For example, if a healthcare provider sends a bill to a patient, this law governs the time during which a patient has to dispute the bill, the time during which the healthcare provider must respond to the patient's dispute and the time during which the error, if it exists, must be corrected or the accuracy of the bill explained to the patient.
The Uniform Unclaimed Property Act
This law governs the obligations of a healthcare provider to report and remit aged credit balances or other unclaimed property of a patient.
Healthcare providers must monitor the collection activities of their employees and third parties(collection agencies, collection law firms) in order to reduce the risk of penalties and fines that may be imposed for non-compliance with laws affecting collections. My firm stands ready to assist you. | |
| Law Offices of David S. Barmak, LLC |
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David Barmak established his health care law firm in 1984 to deliver legal services, both in transactions and litigation, to organizations and professional practitioners in the health care field, as well as supplemental services that improve the operations delivered through Barmak Mediation & Risk Management Services, Inc. We call this approach "Enterprise-Wide Risk Management" because it includes three important facets:
- Counsel and advisement on all aspects of legal risk, from setting up the entity to corporate governance;
- Protection of your practice or business through litigation prosecution or defense in the Courets; as well as regulatory compliance and licensure issues before government agencies; and
- Operations improvement through the implementation of enterprise-wise onsite audits, programs and training seminars in the areas of, but not limited to, Fraud and Abuse, HIPAA Privacy and Data Security, Employment, A/R Management, Emergency Preparedness, and Workplace Violence.
David S. Barmak, Esq. received his JD from Cornell University and BA from Duke University. He is licensed to practice and serves clients in the States of New Jersey, New York and Connecticut. Before making your choice of attorney, you should give this matter careful thought. The selection of an attorney is an important decision. The recipient may, if the newsletter is inaccurate or misleading, report the same to the Committee on Attorney Advertising.
For more information, please contact us:
Telephone (609) 688-0055
Fax (609) 688-1199
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