Week 3 Discussion: The False Claims Act

Some of the ways that healthcare organizations can violate the False Claims Act are listed above.  Keeping this information in mind, as well as information from the text, read the following case summary and response to the question afterward. 

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Lily Petals was thrilled to start her new job at the Loving, Kisses, and Profit Hospital.  She had just graduated with a degree in healthcare administration and was hired as a supervisor in the hospital’s Compliance Department.

Having completed her orientation and training, Lily reported to her office in the hospital.  The next morning, shortly after she arrived at work, Lily’s assistant greeted her and explained that Dr. Timmy, the Chief Medical Officer for the hospital, wanted to meet with her and then take her on a tour of the hospital.  Lily picked up a tablet and pen and started off for Dr. Timmy’s office.
As Lily waited for the elevator in the hallway, there were four other people waiting.  Two of the other people appeared to be doctors, the other two were dressed in plain  clothes.  The two persons dressed in plain clothes began talking to each other in tones that were loud enough to be overheard:
Person 1:  “Do you have her Medicare card?”
Person 2:  “Yep.  Do you think my hair looks okay?  I added a little grey coloring to it last night, just in case.”
Person 1:  “Oh, wow, that was a great idea! Yeah, it looks terrific.  You totally look like you’re older than 65!”
Person 2:  “I sure hope so.  I need this surgery and since I lost my job this is my only hope.”
The two doctors looked at each other, and one rolled their eyes.  The elevator arrived and all four people, plus Lily, got on.  One of the doctors asked the other how his new associate was doing.  “Great, he replied.  She is going to be great – really good rapport with the patients.  She’ll make a great primary care doctor.”  The other replied “Terrific – it’s good to hear it.  I just hope that her paperwork with Medicaid comes through faster than we’ve experienced at our practice.  My new associate had to submit bills using my provider number for a full 6 months until he was credentialed and had his own.” 
Just then, the elevator arrived at Lily’s floor.  The doors opened and she walked out of the elevator and headed down the hallway to the Medical Staff Office.  As she walked down the hallway, she passed the Physical Therapy Department.  Those patients are working hard to get better, she thought, as she peeked in and saw many of the patients using crutches and walkers.  She then heard one of the therapists coaching a patient, saying “Five more minutes of walking, Bob!  I already billed for these services so you can’t make a liar out of me.”  Bob and the therapist both laughed.  “I got your back”, he said.
Finally, Lily arrived at the door to the Medical Staff Office.  She was about to knock on the door when it abruptly opened.  Immediately facing her was a man wearing a business suit, with his head turned toward the Chief Medical Officer’s office (his back was facing Lily).  “Thanks so much, Timmy,” the man said.  I’m glad my daughter was able to get you what you needed from ABC Pharmaceuticals.  Ever since she started working there I get to see her a lot more here in the hospital!”  The man then turned around and, much to Lily’s surprise, she was looking straight into the face of the hospital’s Chief Executive Officer.
Just then, Dr. Timmy noticed Lily and said “Welcome to Loving, Kisses, and Profit, Lily!  I’m so glad you’re here.”  Here walked with her back to his office.  As he passed by the kitchen, he said, “Would you like some doughnuts, coffee, or an egg sandwich?  Our representative from ABC Pharmaceuticals has a special soft spot for the Medical Staff here;  she brings us a full hot and cold breakfast at least twice per week!  It’s great – we could never afford to do this by ourselves.”
Lily declined the offer, took a deep breath, and walked into Dr. Timmy’s office.

Questions: 

(1) Identify at least three potential violations of the False Claims Act.  Be sure to support your assertion with facts from the case and what you’ve learned.

(2) Select one of the violations and tell us what actions you would recommend to Dr. Timmy to identify and correct it.