False Claim: The Amount Falsely Billed or the Amount Reimbursed
By
David Barmak, JD CEO
WHAT IF a skilled nursing facility (SNF) intentionally submits a fictitious claim to Medicare for $1,500 but the real reimbursement to be expected is $300? Is the false claim considered to be $1,500 or $300?
WHAT IF the government conducts a sting operation in which the value of the services intentionally submitted for reimbursement is $300 but the real value of the services rendered is $0? Is the false claim considered to be $300 or $0?
WHAT IF the value of the service intentionally submitted to a liability insurance carrier is inflated to $20,000 but the real value is $2,000? Is the false claim considered to be $20,000 or $2,000?
Under United States Sentencing Guidelines, section 2B1.1, the offense level for defendants convicted of fraud is increased commensurate with the amount of loss involved in the fraud. The commentary to section 2B1.1 indicates that “loss” for purposes of the guideline is “the greater of the actual loss or intended loss.” “Actual loss” is the reasonably foreseeable pecuniary harm resulting from the offense, and “intended loss” is the pecuniary harm that was intended to result from the offense. Intended loss includes “intended pecuniary harm that would have been impossible or unlikely to occur (e.g., as in a government sting operation or an insurance fraud in which the claim exceeded the insured value).”
In other words, if a SNF submits a claim that is known or should have been known to be fictitious or inflated, the amount billed to Medicare, Medicaid, or any other government third party is considered evidence of the amount of the loss that the SNF intended to cause. Courts will consider additional evidence to suggest that the amount billed either exaggerates or understates the billing party’s intent; however, as the defendant in USA v. Allan Hearn, No. 09-60613 (5th Cir. 2010) found, claiming a lack of understanding the amounts that Medicare likely will pay—shifting responsibility for Medicare claims to his staff and claiming that he was generally uninformed about how Medicare reimbursement work—comes across as self-serving and lacks credibility. The trial court found:
“It appears that he indiscriminately submitted false and fictitious bills in an effort to maximize reimbursements. It does not appear that he was focused on the mechanics of the program and, instead, was focused on [the] number of claims. Thus, even if he has some notion about caps and understood that full reimbursement was unlikely or impossible, the defendant [provider] still submitted claims with the intent that they would be paid.”
Unless extraordinary evidence exists, the intended loss of a false claim is calculated to be the amount falsely billed to Medicare or other government third-party payor rather than the amount a SNF is reimbursed. This is a critical determination because the civil penalty for a false claim can be up to three times the amount of the intended loss plus between $14,308 and $28,619 per claim plus attorneys’ fees and costs.