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Compliance | Staten Island, NY

Federal and State Claims Act Information


Richmond University Medical Center (RUMC) shall comply with all applicable federal and New York State False Claims Act laws and regulations. RUMC has developed policy and procedures to prevent fraud, waste and abuse in federal health care programs. All hospital personnel shall receive education regarding these laws, which are summarized below. The entire list of laws described in the policy is:

      State Finance Law 187-194, False Claims Act (including whistleblower protections.

      Social Services Law 145-b, False Statements

      Social Services Law 145-c, Sanctions

      Social Services Law 145, Penalties

      Social Services Law 366-b, Penalties for Fraudulent Practices

      Penal Law, Article 155, Larceny

      Renal Law, Article 175, False Written Statements

      Renal Law, Article 176, Insurance Fraud

      Renal Law, Article 177, Health Care Fraud

      Labor Law 740

      Labor Law 741


  A. The Federal False Claims Act

The Federal False Claims Act is a law that prohibits a person or entity, such as the Hospital from “knowingly” presenting or causing to be presented a false or fraudulent claim for payment or approval to the Federal government, and “knowingly” making, using or causing to be made a false record or statement to get a false or fraudulent claim paid or approved by the Federal government. The Federal False Claims Act also prohibits a person or entity from conspiring to defraud the government by getting a false or fraudulent claim allowed or paid. The term “knowingly” means that a person: 1) has actual knowledge; 2) acts in deliberate ignorance of the truth or falsity of the information; or 3) acts in reckless disregard of the truth or falsity of the information.  The law specifically provides that a specific intent to defraud is not required in order to prove that the law has been violated.

  B. Federal Program Fraud Civil Remedies Act (“PFCRA”)

This federal law is similar in structure to the False Claims Act, but provides administrative remedies against persons or entities that make or cause to be made a false claim for money, property or services to certain federal agencies including the Department of Health and Human Services, which operates the Medicare and Medicaid programs.  The law provides that any person making, presenting, submitting or causing to submit a claim that the person knows or has reason to know is false, fictitious or fraudulent is subject to civil monetary penalties of up to $5000 per false claim and up to twice the amount of the fraudulent claim.  The PFCRA uses the same definition of “knows or has reason to know” as used in the False Claims Act and explained above. Violations are investigated by the Department of Health and Human Services and enforcement actions must be approved by the Attorney General.


A. Civil Penalties (NY Social Services Law 145-b).

New York State makes it unlawful to knowingly make a false statement or representation (or by deliberate concealment of any material fact or other fraudulent scheme or device) to attempt to obtain, or to obtain, Medicaid payments for services or supplies furnished under the New York State Medical Assistance Program. A violation of this law can subject a person or entity, to civil damages equal to three times the amount falsely overstated (or in the case of non-monetary false statements or representations, three times the amount of damages sustained as a result of the violation or $5,000, whichever is greater.) In addition, the person or entity may be required to pay a civil monetary penalty of up to $2,000 for each item or services as restitution to the Medical Assistance Program if the person or entity knew, or had reason to know that:

  The payment involved the providing or ordering of care, services, or supplies that were medically improper, unnecessary or in excess of the documented medical needs of the person to whom they were furnished;

  The care, services or supplies were not provided as claimed;

  The person who ordered or prescribed care, services or supplies which were medically improper, unnecessary or in excess of the documented medical need of the person to whom they were furnished was suspended or excluded from the Medical Assistance Program at the time the care, services or supplies were furnished; or

  The services or supplies for which payment was received were not, in fact, provided.

B. Health Care Fraud (Penal Law 177).

The New York State Penal Law has a specific set of provisions entitled “health care fraud” that impose a range of criminal fines and jail terms depending on the amount of money involved in the fraudulent action.  A person or entity may be prosecuted under these laws if they are acting with intent to defraud a private or public health plan (including, e.g., Medicaid or an HMO), they knowingly and willfully provide materially false information or omit material information for the purpose of receiving payment for health care items or services that they are not otherwise entitled to receive. Since this is a specific intent crime, the prosecutor must prove beyond a reasonable doubt that the individual had specific intent to commit the crime. The severity of the penalty for committing this crime corresponds to the amount of payment wrongfully received from a single health plan in a one-year payment. For example:

  Payments under $3,000 constitute a class “A” misdemeanor;

  Payments between $3,001 to $10,000 constitute a class “E” felony;

  Payments between $10,001 to $50,000 constitute a class “D” felony;

  Payments between $50,0001 to $1,000,000 constitute a class “C” felony; and

  Payments that exceed $1,000,000 constitute a class “B” felony.

C. NY False Claims Act (State Finance Law §187-194).

 The NY False Claims Act closely tracts the federal False Claims Act. It imposes penalties and fines on individuals and entities that file false or fraudulent claims for payment from any state or local government, including health care programs such as Medicaid. The penalty for filing a false claim is $6,000 -$12,000 per claim and the recoverable damages are between two and three times the value of the amount falsely received. In addition, the false claim filer may have to pay the government’s legal fees. The Act allows private individuals to file lawsuits in state court, just as if they were state or local government parties. If the suit eventually concludes with payments back to the government, the person who started the case can recover 25-30% of the proceeds if the government did not participate in the suit or 15-25% if the government did participate in the suit.

D. Social Services Law §145-c Sanctions.

If any person applies for or receives public assistance, including Medicaid, by intentionally making a false or misleading statement, or intending to do so, the person’s, the person’s family’s needs are not taken into account for 6 months if a first offense, 12 months if a second (or once if benefits received are over $3,900) and live years for 4 or more offenses.

  E. Social Services Law §145 Penalties.

Any person who submits false statements or deliberately conceals material information in order to receive public assistance, including Medicaid, is guilty of a misdemeanor.

F. Social Services Law § 366-b. Penalties for Fraudulent Practices.

Any person who obtains or attempts to obtain, for himself or others, medical assistance by means of a false statement, concealment of material facts, impersonation or other fraudulent means is guilty of a Class A misdemeanor. Any person who, with intent to defraud, presents for payment and false or fraudulent claim for furnishing services, knowingly submits false information to obtain greater Medicaid compensation or knowingly submits false information in order to obtain authorization to provide items or services is guilty of a Class A misdemeanor.

  G. Penal Law Article 155. Larceny.

 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 other similar behavior. It has been applied to Medicaid fraud cases. Fourth degree grand larceny involves property valued over $1,000. It is a Class E felony.

  Third degree grand larceny involves property valued over $3,000. It is a Class D felony.

  Second degree grand larceny involves property valued over $50,000. It is a Class C felony.

  First degree grand larceny involves property valued over $1 million. It is a Class B felony.

H. Penal Law Article 175. False Written Statements.

Four crimes in this Article relate to filing false information or claims and have been applied in Medicaid fraud prosecutions:

·   §175.05, Falsifying business records involves entering false information, omitting material information or altering an enterprise’s business records with the intent to defraud. It is a Class A misdemeanor.

  § 175.10, Falsifying business records in the first degree includes the elements of the §175.05 offense and includes the intent to commit another crime or conceal its commission. It is a Class E felony.

  § 175 .30, Offering a false instrument for filing in the second degree involves presenting a written instrument (including a claim for payment) to a public office knowing that it contains false information. It is a Class A misdemeanor.

  §175.35, Offering a false instrument for filing in the first degree includes the elements of the second degree offense and must include an intent to defraud the state or a political subdivision. It is a Class E felony.

I. Penal Law Article 176. Insurance Fraud.

Applies to claims for insurance payment, including Medicaid or other health insurance and contains six crimes.

  Insurance Fraud in the 5th degree involves intentionally filing a health insurance claim knowing that it is false. It is a Class A misdemeanor.

  Insurance fraud in the 4th degree is filing a false insurance claim for over $1,000. It is a Class E felony.

  Insurance fraud in the 3rd degree is filing a false insurance claim for over $3,000. It is a Class D felony.

  Insurance fraud in the 2nd degree is filing a false insurance claim for over $50,000. It is a Class C felony.

  Insurance fraud in the 1st degree is filing a false insurance claim for over $1 million. It is a Class B felony.

  Aggravated insurance fraud is committing insurance fraud more than once. It is a Class D felony.

New York State Whistleblower Protections:

J. NY False Claim Act (State Finance Law §191).

The False Claim Act also provides protection to qui tam relators who are discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of their employment as a result of their furtherance of an action under the Act. Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.

  K. New York Labor Law §740.

Under New York’s Labor Law, employers are prevented from taking any retaliatory actions against an employee who in good faith discloses (or threatens to disclose) to a supervisor or to a public body that the employer is violating the law and the violation presents a substantial and specific danger to the public health and safety or constitutes the crime of health care fraud. To bring an action under this provision, the employee must first bring the alleged violation to the attention of the employer and give the employer a reasonable opportunity to correct the allegedly unlawful practice. The law allows employees who are the subject of a retaliatory action to bring a civil action in court and seek relief such as injunctive relief to restrain continued retaliation; reinstatement, back-pay and compensation of reasonable costs. The Act also provides that employees who bring an action without basis in law or fact may be held liable to the employer for its attorney’s fees and costs.

L. New York Labor Law §741.

A health care employer may not take any retaliatory action against an employee if the employee discloses certain information about the employer’s policies, practices or activities to a regulatory, law enforcement or other similar agency or public official. Protected disclosures are those that assert that, in good faith, the employee believes constitute improper quality of patient care. The employee’s disclosure is protected only if the employee first brought up the matter with a supervisor and gave the employer a reasonable opportunity to correct the alleged violation, unless the danger is imminent to the public or patient and the employee believes in good faith that reporting to a supervisor would not result in corrective action. If an employer takes a retaliatory action against the employee, the employee may sue in state court for reinstatement to the same, or an equivalent position, any lost back wages and benefits and attorneys’ fees. If the employer is a health provider and the court finds that the employer’s retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the employer.

Vendor Letter – The Deficit Reduction Act of 2005  

To:    All Contractors and Agents

Re:    The Deficit Reduction Act of 2005

Richmond University Medical Center is committed to providing the highest quality care to our patients and conducting our business with integrity and in compliance with applicable federal and state laws and regulations. To this end, we have an extensive Compliance Program in place that we expect all employees and all persons and entities with which we contract to comply.

As a participant in the Medicaid Program, we are obligated to comply with the terms and requirements of the Deficit Reduction Act of 2005 (the “DRA”). In accordance with the DRA, we have adopted written polices for all employees that provide detailed information about the False Claims Act, the Program Fraud Civil Remedies Act, the relevant state laws, the whistleblower protections under such laws and Richmond University Medical Center’s policies for detecting and preventing waste, fraud and abuse.

The DRA also requires that we provide this information to all contractors and agents for your adoption. Accordingly we are attaching our policy to this memo for your distribution to your employees.

Richmond University Medical Center has a no tolerance policy for employees, agents, or vendors who are involved in any unlawful activity. To that end, we expect that you share our goals of eradicating fraud and abuse and, therefore, will comply with your obligations under the DRA. If you have any questions regarding these materials, feel free to contact Administration at (718)-818-1234 or visit our website at


Richard Salhany, MBA

Disciplinary Actions – Compliance Violations           

Click the link bellow to download form

9.21 Disciplinary Actions – compliance RUMC.doc

Reporting a Compliance Concern  

If you suspect any incident or activity to be illegal or unethical you should speak with your supervisor or contact a member of the compliance department so the issue can be investigated and if necessary, corrected.

If you would like to make an anonymous report, you can use the compliance department’s toll-free, 24-hour Anonymous Hotline at 800-826-6762. National Hotline Services, an external communications firm answers the Hotline, so you are not speaking directly with an RUMC employee. A report is then sent to the compliance department for review and investigation. You can call the hotline at a later date to discover the results of your complaint.

You should place a compliance report if you know or suspect any of the following behaviors:

•  Medicare/Medicaid fraud and abuse

•  Fraudulent billing

•  Inappropriate medical record documentation

•  Violations of patient confidentiality

•  Environmental, health and safety issues

•  Conflict of Interest

•  Harassment/Discrimination

Compliance is the responsibility of each and every employed individual at RUMC. It is up to you to maintain RUMC’s integrity and reputation. If you know of or suspect a compliance issue, please place a report – either directly or through the Anonymous Hotline – so that it can be discreetly but properly investigated.

Remember that compliance begins with you.