Notice of Deficit Reduction Act

This Deficit Reduction Act Notice applies to employees, associates, vendors, providers and any other business partner of Anne Arundel Dermatology, P.A. and/or Anne Arundel Dermatology Management, L.L.C. (“AAD”).

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

The 2005 Deficit Reduction Act (DRA) established a new Medicaid Integrity Program that is very similar to the Medicare Integrity Program. The 2005 DRA funded this new Fraud and Abuse detection program with an increased level of funding up to $75 billion by 2009. Since then, funding has increased and dedicated program integrity audit resources are being coordinated across agencies. We recognize that it is now even more important to always do the right thing. When an organization comes under the scrutiny of the Medicaid Integrity Program, one of the items that will be reviewed is whether the organization did an adequate job of communicating the details of the False Claims Act (FCA) and the whistleblower protections throughout the organization and to agents and contractors. This notice outlines the False Claims Act and related new laws and Anne Arundel Dermatology’s role in assuring effective compliance.

False Claims Act (FCA)

As a recipient of federal health care program funds, including Medicare and Medicaid, Anne Arundel Dermatology 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.

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

The three most important elements of these laws 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. The states in which AAD has dermatology practice sites have similar false claims acts. These laws apply not only to healthcare benefits paid through a state Medicaid program, but to a broad range of other state funded programs. These laws allow individuals to file a lawsuit in state court for false healthcare and other claims that were filed with the state for payment.

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 three times the amount of the claim plus fines of $5,000 – $22,000 per claim. In addition to fines and penalties, the courts can impose criminal penalties against individuals and organizations for willful violations of the False Claims Act. The false claims laws adopted in the states in which AAD has practice sites may also carry significant fines and penalties of up to $10,000 for each false claim plus, in some states, triple damages. See the attached state summary for more information.

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 False Claims Act lawsuit. Similar protections are also provided to individuals under the False Claims Act laws adopted in the states in which AAD maintains medical and/or surgical practice sites.

Our Commitment to Integrity

Anne Arundel Dermatology is committed to fully complying with all laws and regulations that apply to our organization. We have established a Compliance Program as evidence of our strong commitment to operating with the highest degree of 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 AAD’s Compliance Program may be accessed by contacting the Compliance Officer by phone or email. See contact information at our website,

What you must do

Whether you are an employee, associate, vendor, provider, or another business partner of AAD’s practice, you must:

  • Act with honesty and integrity in all of your business activities.
  • Follow all laws and regulations and Anne Arundel Dermatology policies and procedures that apply to your work activities, including requirements of Medicare, Medicaid, and other federal health care programs.
  • Contact one of the following resources available within AAD if you have knowledge of or concern regarding a potential false claim:
    • Call the Compliance Officer at 443.906.1853 or dial extension 2830 internally.
    • Call our Compliance Hotline at 1.866.874.2453

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

Anne Arundel Dermatology 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 Anne Arundel Dermatology.

Please contact the Anne Arundel Dermatology Compliance Officer directly at 443.906.1853 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