False Claims Act Risks for Bundled Services: Exposure Risks and Damages

The healthcare industry is no stranger to liability threats under the federal False Claims Act (FCA), with the number of cases consistently growing as the government clamors to offset losses in its straining healthcare budget. According to Attorney General Eric Holder, the government is “taking [its] fight against health-care fraud to a new level.”1 The classic example of a false claim involves submitting a request for payment for work that was not performed or a product that was not delivered, but in the healthcare industry, government reimbursement programs frequently use fixed payments for a collective bundle of services, e.g., diagnostic related groups, per diem payment rates, bundled services, etc. So what level of exposure does a healthcare provider face when just a small portion of the collective service is allegedly false or fraudulent—is it potentially liable for the value of the whole claim or just the portion that was tainted?

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