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Deficit Reduction Act (DRA) Notice

This Deficit Reduction Act notice applies to employees, associates, vendors, attending physicians, Advanced Practice Providers and any other business partner of Rady Children’s Hospital-San Diego.

Deficit Reduction Act & False Claims Act Deficit Reduction Act (DRA)

Rady Children’s is committed to providing the highest quality of care to our patients and to conducting business with integrity and in compliance with federal and state laws and regulations. As Rady Children’s receives state and federal health care program funds, we have a legal obligation to comply with the terms and requirements of the Deficit Reduction Act of 2005 (DRA).

In accordance with the DRA, this Notice is provided to all staff, Medical Staff, agents and contractors to Rady Children’s Hospital-San Diego, and made publicly available on the Rady Children’s website. Rady Children’s includes in our policies, detailed information regarding the Federal False Claims Act, and applicable state civil and criminal laws intended to prevent and detect fraud, waste, and abuse in federal health care programs. Rady Children’s Code of Conduct prohibits submitting a false claim for payment to any health care program or insurance plan.

False Claims Act (FCA)

As a recipient of federal health care program funds, including Medicare and Medicaid, Rady Children’s is required by law to include in its policies and provide to all employees, associates, agents, and contractors, detailed information regarding the federal False Claims Act and applicable state civil and criminal laws intended to prevent and detect fraud, waste, and abuse in federal health care programs.

What Is the False Claims Act?

The False Claims Act is a federal law that makes it a crime for any person or organization to make a false record or file a false claim to any federal health care program, which includes any plan or program that provides health benefits (whether directly, through insurance, or otherwise) which is funded directly, in whole or in part, by the United States Government or any State health care program. In addition, the law no longer has a specific intent requirement. Receipt of an overpayment that is not refunded is also considered a false claim.

The false claims act was amended by the Fraud Enforcement Recovery Act (FERA) which was signed into law in 2009. In 2010 additional fraud enforcement provisions were enacted as part of the Patient Protection and Affordable Care Act (PPACA).

The three most important elements that these new laws add to the DRA information are:

  1.  Mandatory reporting, repayment and explanation of any overpayments received from government sources;
  2.  Retention of any government overpayment beyond 60 days after identification is now a false claim (invokes penalties and whistleblower provisions); and
  3.  Mandatory Compliance Plans beyond what was previously required for entities such as provider groups and nursing homes.

The False Claims Act also has provisions (called Qui Tam) that allow individuals with original information concerning fraud involving government health care programs to file a lawsuit on behalf of the government and, if the lawsuit is successful, to receive a portion of recoveries received by the government.

State Laws

In most states, it is a crime to obtain something (e.g., such as a Medicaid payment or benefit) based on false information. California’s False Claims Act is similar to the Federal False Claims Act allowing individuals to file a lawsuit in state court for false claims that were filed with the state for payment, such as the Med-Cal program.

Penalties for Violating the False Claims Act

There are significant penalties for violating the federal False Claims Act. Financial penalties to an organization that submits a false claim can total as much as $13,946 to $27,894 plus three times the amount of damages which the Government sustains due to the violation. In addition to fines and penalties, the courts can impose criminal penalties against individuals and organizations for willful violations of the Federal False Claims Act. The California False Claims Act also carry significant fines and penalties of up to $11,000 for each false claim plus triple damages.

Protections Under the False Claims Act

The Federal False Claims Act protects anyone who files a lawsuit under the Act from being fired, demoted, threatened, or harassed by their employer as a result of filing a Federal False Claims Act lawsuit. Similar protections are also provided to individuals under the California False Claims Act laws.

Our Commitment to Integrity

Our Compliance Program includes a Code of Conduct, policies and procedures, training and education, auditing and monitoring, and mechanisms, such as our Compliance Hotline for individuals to raise issues and concerns without fear of retaliation. Information regarding Rady Children’s Compliance Program may be accessed on Rady Children’s  Compliance web page.

What you must do

Whether you are an employee, associate, vendor, attending physician, Advanced Practice Provider, or another business partner of Rady Children’s, you must:

  • Act with honesty and integrity in all of your business activities.
  • Follow all laws and regulations and Rady Children’s policies and procedures that apply to your work activities, including requirements of Medicare, Medi-Cal, and other federal health care programs.
  • Contact one of the following resources available within Rady Children’s if you have knowledge of or concern regarding a potential false claim:
    • Call our Chief Compliance Officer at (858) 966-8541
    • Call our Compliance Hotline at 1(877) 862-4228

All compliance matters will be kept confidential, and your concerns will be treated with seriousness and respect. You may also call anonymously.

Rady Children’s policies strictly prohibit retaliation in any form against an individual reporting an issue or concern in good faith. Retaliation is subject to discipline up to and including dismissal from employment or termination of the business relationship with Rady Children’s.

Please contact the Rady Children’s Hospital Chief Compliance Officer at (858) 966-8541 if you have any questions about the above.

Additional Fraud and Abuse Laws
  • Health Care Fraud, 18 U.S.C. 1347
  • False Statements Relating to Health Care Matters, 18 U.S.C. 1035
  • Medicare-Medicaid Anti-Fraud and Abuse Amendments 42 U.S.C. 1320a-7b(a)
  • Theft or Embezzlement in Connection with Health Care, 18 U.S.C. 669
  • Obstruction of Criminal Investigation of Health Care Offenses, 18 U.S.C. 1518
  • Federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b)
  • Civil Monetary Penalties, 42 U.S.C. 1320a-7a
  • OIG Exclusion Authority, 42 U.S.C. 1320a-7
  • Sarbanes-Oxley Act, 2002