North Shore-LIJ Health System is now Northwell Health 

 

 

POLICY TITLE: 

 

Detecting and Preventing Fraud, Waste, 
Abuse and Misconduct 

 

ADMINISTRATIVE POLICY AND 
PROCEDURE MANUAL 

 

 

POLICY #: 800.09 

CATEGORY: Compliance and Ethics 

System Approval Date: . 03/30/2017 

 

Site Implementation Date: . 03/30/2017 

Effective Date: 1/01/07 

 

Last Reviewed/Approved: 03-17-2016 

Prepared by: 

 

Office of Corporate Compliance 

Superseded Policy(s)/#/Notations: 

 

N/A 



 

GENERAL STATEMENT of PURPOSE 

 

It is the obligation of Northwell Health and its affiliated entities (ÒNorthwell HealthÓ) to prevent 
and detect any actions within the organization that are illegal, violative of federal and state health 
care programs (Medicare, Medicaid and other governmental payer programs), fraudulent or in 
violation of any applicable Northwell Health policy. For purposes of this policy, Òany applicable 
Northwell Health policyÓ shall include policies that are designed to prevent financial 
wrongdoing; policies prohibiting fraud, theft, embezzlement, bribery, kickbacks and abuse or 
misuse of corporate assets; conflict of interest policies; policies addressing unethical conduct; 
and harassment and discrimination policies. 

 

To satisfy this obligation, Northwell Health maintains a vigorous Compliance Program and 
strives to educate our work force regarding Northwell Health policies, the requirements, rights 
and remedies of Federal and state laws governing the submission of false claims, including the 
rights of employees to be protected as whistleblowers under such laws and the importance of 
submitting accurate claims and reports to federal and state governments. 

 

POLICY 

 

Northwell Health prohibits the violation of state and federal law, applicable Northwell Health 
policy and the knowing submission of a false claim for payment in relation to a federal or 
state-funded health care program. Such a submission violates the federal False Claims Act as 
well as various state laws, and may result in significant civil and/or criminal penalties. Any 
individual who in good faith reports any action or suspected action taken by or within the 
organization in violation of these laws or that is otherwise illegal, fraudulent or in violation of 
any applicable policy of Northwell Health shall not suffer intimidation, harassment, 
discrimination or other retaliation or, in the case of employees, adverse employment 
consequences. 


 

 

 

 

SCOPE 

 

This policy applies to all Northwell Health employees, as well as medical staff, volunteers, 
students, trainees, physician office staff, contractors, trustees and other persons performing work 
for or at Northwell Health; faculty and students of the Hofstra Northwell School of Medicine 
conducting research on behalf of the School of Medicine on or at any Northwell Health facility; 
and the faculty and students of the Hofstra Northwell School of Graduate Nursing and Physician 
Assistant Studies. 

 

DEFINITIONS 

 

N/A 

 

PROCEDURE/GUIDELINES 

 

A. Northwell Health Fraud, Waste, Abuse and Misconduct Detection, Prevention and 
Employee Protection 


 

To assist Northwell Health in meeting its legal and ethical obligations, Northwell Health 
expects and encourages any employee, contractor or agent who is aware of or reasonably 
suspects conduct that is illegal, against Northwell Health policy or in furtherance of the 
preparation or submission of a false claim or report or any other potential fraud, waste, or 
abuse related to a federal or state-funded health care program, to report such information to 
his/her supervisor, the Compliance Director of the Northwell Health facility where he/she is 
employed, the Chief Corporate Compliance Officer of Northwell Health (516-465-8097), or 
to call the confidential Compliance Help-Line at (800) 894-3226 which is available 24 hours 
a day, 7 days a week or by visiting www.northwell.ethicspoint.com where individuals can 
make reports about compliance issues online. Where appropriate, the Chief Corporate 
Compliance Officer will report the issue to the Board of Trustees Audit and Corporate 
Compliance Committee. A record will be kept of all whistleblower interactions. 

 

Any individual who reports such information in good faith will have the right and opportunity 
to do so anonymously and will be protected against intimidation, harassment, discrimination 
or other retaliation or, in the case of employees, adverse employment consequences. 
Northwell Health also prohibits anyone from intimidating an individual into not disclosing 
compliance concerns. 

 

A good faith report is a report that a whistleblower reasonably believes to be true regarding 
conduct that he or she reasonably believes to constitute illegal conduct, fraud or a violation of 
Northwell Health policy. Northwell Health will immediately investigate and take appropriate 
action with respect to all suspected acts of retaliation or intimidation. Reports will be kept 
confidential to the extent permitted by law. 

 


Northwell Health obligates itself to swiftly and thoroughly investigate any reasonable 
credible report of fraud, waste, abuse or misconduct or any reasonable suspicion thereof 
through Northwell HealthÕs Compliance Program. 

 

Northwell Health has the right to take appropriate action against an employee who has 
participated in a violation of law or hospital or Northwell Health policy. The failure to comply 
with the laws and/or to report suspected violations of state or federal law can have very 
serious consequences for Northwell Health and for any affiliated individual who fails to 
comply or report a suspected violation. As a Northwell Health employee or affiliated 
individual, you have an obligation to report concerns using the internal methods listed above 
and to understand the options available should your concerns not be resolved. 

 

Northwell Health educates its trustees, officers, employees, contractors, agents and volunteers 
who provide substantial services to Northwell Health on the importance of this policy on a 
periodic basis through written or oral communications and by distributing a copy of this 
policy via the Northwell Health public website. 

 

Any person who is the subject of a whistleblower complaint may not be present at or 
participate in Northwell Health Board of Trustees, or its committee, deliberations or voting 
on the matter relating to the complaint. The Northwell Health Board of Trustees or its 
committee can request that person present background information or answer questions prior 
to the commencement of deliberations or voting. 

 

Any employee who also holds a position on the Northwell Health Board of Trustees shall not 
take part in any deliberations concerning the administration of this policy. 

 

The following list of relevant state and federal laws is illustrative but non-exhaustive. 

 

B. State and Federal Fraud and Abuse Detection, Prevention and Employee Protection 

 

I. FEDERAL LAWS 




 

 False Claims Act (31 U.S.C. ¤¤ 3729-3733) 

The False Claims Act (ÒFCAÓ) provides, in pertinent part, that: 

 

Any person who (1) knowingly presents, or causes to be presented, to an officer or 
employee of the United States Government or a member of the Armed Forces of the United 
States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses or 
causes to be made or used, a false record or statement to get a false or fraudulent claim paid 
or approved by the Government; (3) conspires to defraud the Government by getting a false 
or fraudulent claim paid or approved by the Government; Éor (7) knowingly makes, uses 
or causes to be made or used, a false record or statement to conceal, avoid, or decrease an 
obligation to pay or transmit money or property to the Government, is liable to the United 
States Government for a civil penalty of not less than $10,781 and not more than $21,563, 
plus 3 times the amount of damages which the Government sustains because of the act of 
that personÉ 


 

(a) For purposes of this section, the terms ÒknowingÓ and ÒknowinglyÓ mean that 
a person, with respect to information (1) has actual knowledge of the 
information; (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, and no proof of specific intent to defraud is required. 






 

While the FCA imposes liability only when the claimant acts Òknowingly,Ó it does not 
require that the person submitting the claim have actual knowledge that the claim is false. A 
person who acts in reckless disregard or in deliberate ignorance of the truth or falsity of the 
information also can be found liable under the Act. 

 

In sum, the FCA imposes liability on any person who submits a claim to the federal 
government that he or she knows (or should know) is false. An example may be a physician 
who submits a bill to Medicare for medical services she knows she has not provided. The 
FCA also imposes liability on an individual who may knowingly submit a false record in 
order to obtain payment from the government. An example of this may include a 
government contractor who submits records that he knows (or should know) are false and 
that indicate compliance with certain contractual or regulatory requirements. 

 

The third area of liability includes those instances in which someone may obtain money 
from the federal government to which he may not be entitled and then uses the false 
statements or records in order to retain the money. An example of this so-called Òreverse 
false claimÓ may include a hospital that obtains interim payments from Medicare 
throughout the year and then knowingly files a false cost report at the end of the year in 
order to avoid making a refund to the Medicare program. 

 

In addition to its substantive provisions, the FCA provides that private parties may bring an 
action on behalf of the United States, 31 U.S.C. ¤ 3730 (b). These private parties, known as 
Òqui tam relators,Ó may share in a percentage of the proceeds from an FCA action or 
settlement. 

 

Section 3730(d)(1) of the FCA provides, with some exceptions, that a qui tam relator, when 
the Government has intervened in the lawsuit, shall receive at least 15 percent but not more 
than 25 percent of the proceeds of the FCA action depending upon the extent to which the 
relator substantially contributed to the prosecution of the action. When the Government 
does not intervene, section 3730(d) (2) provides that the relator shall receive an amount that 
the court decides is reasonable and shall not be less than 25 percent and not more than 30 
percent. 

 

Administrative Remedies for False Claims (31 U.S.C. ¤¤ 3801-3812) 

This statute allows for administrative recoveries by federal agencies. If a person submits a 
claim that the person knows is false or contains false information, or omits material 
information, then the agency receiving the claim may impose a penalty of up to $10,781 for 
each claim. The agency may also recover twice the amount of the claim. 

 


Unlike the FCA, a violation of this law occurs when it is submitted, not when it is paid. 
Also, unlike the FCA, the determination of whether a claim is false, and the imposition of 
fines and penalties are made by the administrative agency, not by prosecution in the federal 
court system. 

 

II. NEW YORK STATE LAWS 

 

New York False Claims Act (State Finance Law, ¤¤ 187-194) 

The New York False Claims Act closely tracks the Federal FCA. 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 governmentÕs 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. 

 

Social Services Law ¤ 145-b False Statements 

It is a violation to knowingly obtain or attempt to obtain payment for items or services 
furnished under any Social Services program, including Medicaid, by use of a false 
statement, deliberate concealment or other fraudulent scheme or device. The State or the 
local Social Services district may recover three times the amount incorrectly paid. In 
addition, the Department of Health may impose a civil penalty of up to $2,000 per 
violation. If repeat violations occur within 5 years, a penalty of up to $7,500 per violation 
may be imposed for more serious violations of Medicaid rules, billing for services not 
rendered or providing excessive services. 

 

Social Services Law ¤ 145-c Sanctions 

If any person applies for or receives public assistance, including Medicaid, and is found to 
have intentionally made a false or misleading statement for the purpose of establishing or 
maintaining the eligibility of the individual or of the individualÕs family for aid or of 
increasing (or preventing a reduction in) the amount of such aid, then the needs of such 
individual shall not be taken into account in determining his or her need or that of his or her 
family (i) for a period of six months upon the first occasion of any such offense, (ii) for a 
period of twelve months upon the second occasion of any such offense or upon an offense 
which resulted in the wrongful receipt of benefits in an amount of between at least one 
thousand dollars and no more than three thousand nine hundred dollars, (iii) for a period of 
eighteen months upon the third occasion of any such offense or upon an offense which 
results in the wrongful receipt of benefits in an amount in excess of three thousand nine 
hundred dollars, and (iv) five years for any subsequent occasion of any such offense. 

 


CRIMINAL LAWS 

 

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. 

 

Social Services Law ¤ 366-b Penalties for Fraudulent Practices 

a. 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. 


 

b. Any person who, with intent to defraud, presents for payment a 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. 


 

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. This 
crime has been applied to Medicaid fraud cases. 

 

a. Fourth degree grand larceny involves property valued over $1,000. It is a Class E 
felony. 


 

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


 

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


 

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


 

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: 

 

a. ¤ 175.05, Falsifying business records, involves entering false information, 
omitting material information or altering an enterpriseÕs business records with 
the intent to defraud. It is a Class A misdemeanor. 


 

b. ¤ 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. 



 

c. ¤ 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. 


 

d. ¤ 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. 


 

Penal Law Article 176 Insurance Fraud 

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

 

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


 

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


 

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


 

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


 

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


 

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


 

Penal Law Article 177 Health Care Fraud 

This statute applies to claims for health insurance payment, including Medicaid, and 
contains five crimes. 

 

a. Health care fraud in the fifth degree is knowingly filing, with intent to defraud, a 
claim for payment that intentionally has false information or omissions. It is a Class 
A misdemeanor. 


 

b. Health care fraud in the fourth degree is filing false claims and annually receiving 
over $3,000 in aggregate. It is a Class E felony. 


 

c. Health care fraud in the third degree is filing false claims and annually receiving 
over $10,000 in aggregate. It is a Class D felony. 


 

d. Health care fraud in the second degree is filing false claims and annually receiving 



over $50,000 in aggregate. It is a Class C felony, 


 

e. Health care fraud in the first degree is filing false claims and annually receiving 
over $1 million in the aggregate. It is a Class B felony. 


 

III. WHISTLEBLOWER PROTECTION 

 

Federal False Claims Act (31 U.S.C. ¤ 3730(h) 

The FCA 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 FCA. 
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 attorneysÕ fees. 

 

New York False Claims Act (State Finance Law ¤ 191) 

The New York False Claims 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 attorneysÕ fees. 

 

New York Labor Law ¤ 740 

An employer may not take any retaliatory action against an employee if the employee 
discloses information about the employerÕs policies, practices or activities to a regulatory, 
law enforcement or similar agency or public official. Protected disclosures are those that 
assert that the employerÕs policy, practice or activity violates the law and creates a 
substantial and specific danger to the public health and safety or which constitutes health 
care fraud under Penal Law ¤ 177 (knowingly filing, with intent to defraud, a claim for 
payment that intentionally has false information or omissions). 

 

The employeeÕs disclosure is protected only if (a) the employee first brought up the matter 
with a supervisor and gave the employer a reasonable opportunity to correct the alleged 
violation, and (b) the policy, practice or activity actually violates the law. If an employer 
takes a retaliatory action against the employee, the employee may sue for reinstatement to 
the same, or an equivalent position, any lost back wages and benefits and attorneysÕ fees. If 
the employer is a health provider and the court finds that the employerÕs retaliatory action 
was in bad faith, it may impose a civil penalty of $10,000 on the employer. 

 

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 employerÕs policies, practices or activities 


to a regulatory, law enforcement or other similar agency or public official. Protected 
disclosures are those that are asserted by employees in good faith and with the reasonable 
belief that the policy, practice or activity constitutes improper quality of patient care. 

 

The employeeÕs 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 for 
reinstatement to the same or an equivalent position, any lost back wages and benefits and 
attorneysÕ fees. If the employer is a health provider and the court finds that the employerÕs 
retaliatory action was in bad faith, it may impose a civil penalty of $10,000 on the 
employer. 

 

 

REFERENCES to REGULATIONS and/or OTHER RELATED POLICIES 

 

42 U.S.C. ¤1396a(a)(68) 

Non-profit Revitalization Act of 2013 (S5845/A8072/10365B) 

 

CLINICAL REFERENCES/PROFESSIONAL SOCIETY GUIDELINES 

N/A 

ATTACHMENTS 

N/A 

 

FORMS 

N/A 

 

APPROVAL: 

 

System Administrative P&P Committee 

 

 . 03/30/2017 

 

System PICG/Clinical Operations Committee 

 

. 03/30/2017 



 

Standardized Versioning History: 

*=Policy Committee Approval; ** =PICG/Clinical Operations Committee Approval 

 

*05/12/09; **05/28/09 

*11/9/10; **11/18/10 

*04/12/11; **04/28/11 

*05/28/14 **06/23/14 

*02/25/16 **03/17/16 (e-vote) 

 

. Expedited Approval Granted by: 


Winnie Mack, Chair Ð System Administrative P&P Committee 

Morris Rabinowicz, Co-Chair, - System PICG/Clinical Operations Committee