When most dentists think about ways that legal liability can arise, usually it involves malpractice law suits. This mindset is technically correct; however, it is not a complete picture. There are other ways in which legal liability can arise. Among the possibilities is the False Claims Act (FCA). The FCA, 31 U.S.C.A. § 3729, prohibits the submission of false claims to the federal government. Liability under the FCA can take many forms and in some situations, can be triggered by the actions of dental support staff.


The statute lays out the penalty for submissions of false claims. Currently the penalty is between $5,500 and $11,000, plus up to 3 times the damage suffered by the federal government. What makes the FCA so interesting is the qui tam provision that allows a citizen to bring a claim on behalf of the federal government, 31 U.S.C.A. § 3730(b). A qui tam suit brought by a citizen permits that citizen to recover between 15 and 25 percent of the amount recovered by the federal government, when the federal government proceeds with the lawsuit. The amount recoverable by the citizen can be as much as 30 percent of the amount recovered if the federal government declines to pursue the claim and the citizen prevails, on the government’s behalf, at trial.


FCA liability can be extended to any dental practices that participates in a federally funded program. One of the most common federal programs in which dentists participate is Medicare. Any dental practice that accepts and bills Medicare for services has potential FCA liability. FCA claims can arise two different ways under the FCA, factually false claims and legally false claims.


First, factually false claims. This is the most common type of FCA violation. A factually false claim occurs when the description of a good or service is false, or incorrect. Specifically, over reporting for services rendered, claiming to have rendered services that were never provided, or billing for services individually when they should have been bundled, are all examples of factually false claims. The last example is one that can easily be overlooked. A dentist that bills Medicare for separate services or procedures when they would otherwise bundle those same service or procedures under a single line item could trigger FCA liability. Generally, factually false claims result in some monetary damage suffered by the federal government, usually in the form of overpayment to the provider.


Second, legally false claims. Legally false claims are less common than factually false claims, but should be addressed nonetheless. A legally false claim occurs where a business makes misrepresentations regarding compliance with a federal statute, regulation, or contractual term. An example of a legally false claim is when a business attests to the federal government that they comply with regulations necessary to qualify for a government program, or contract, and do not actually comply. The falsity of the assertion of compliance is enough to constitute a legally false claim. A dental practice that reports compliance with Medicare regulations, when they do not actually meet the necessary standards, could be liable under the FCA for a legally false claim. Under legally false claims, no funds need to have been distributed to the provider for liability under the FCA.


The FCA can be applied to a variety of everyday activities executed in a dental office. The key is understanding what actions can trigger liability and avoiding them. The difficulty with the FCA is liability for your practice can be triggered by the actions of your practice manager or the person responsible for billing. The good news is, there are measures and safe guards a dentist can implement to help reduce the likelihood of triggering FCA liability. In Part 2 I will discuss some of the safeguards that can be implemented to protect your practice. If you have any questions regarding the FCA and protecting your dental practice, we can help. Contact us today to learn how you can protect your practice from FCA liability.