2.5.6 False Claims, Fraud, Waste, Abuse, and Other Misconduct
A. Purpose
To establish and maintain a fair, ethical and honest business environment for all employees, students, volunteers, customers, vendors and anyone else with whom the University has a relationship and identify roles and responsibilities of the University regarding suspected misconduct and dishonesty. The University of Texas System (UTS) Fraud policy, UTS 118, specifies individual responsibilities and actions regarding the prevention and reporting of fraud.
B. Persons Affected
All employees, students, volunteers, customers, vendors and anyone else with whom the University of Texas at Tyler (the "University") has a relationship.
C. Definitions
- Fraud – Fraud encompasses an array of irregularities and illegal acts characterized by internal or external deception. It can be perpetrated for the benefit of, or to the detriment of, the University; and by persons outside as well as inside the University. Examples of fraud include, but are not limited to the following:
- Stealing, misappropriation of funds, supplies, etc.
- Forgery or unauthorized alteration of any document
- Intentional misrepresentation by University personnel regarding payroll records or the payroll records of others
- Knowingly making a false entry in, or false alteration of a University record
- Making, presenting, or using any record, document, or thing with the knowledge that it is false
- Intentional destruction, concealment, removal or other impairment to the verity, legibility, or availability of a University record
- Processing, selling, or offering to sell a University record or a blank University record form with the intent that it be used unlawfully, or with the knowledge that it was obtained unlawfully
- Using or claiming to hold an educational degree that is fraudulent, fictitious, or has been revoked, with the intent to obtain employment, promotion, or other benefit
- Credit card abuse or falsification of transaction
- Making a false statement to obtain money, property, credit, or services
- Securing execution of a document by deception
- Fraudulent destruction, removal, or concealment of a document
- Fraudulent use or possession of identifying information without that person's consent
- Stealing an unsigned check or receiving an unsigned check with the intent to use it or sell it
- Waste – Waste is defined as intentional or negligent harmful or destructive use of property under one's control. Waste may also be referred as the unnecessary incurring of costs as a result of inefficient practices, systems or controls. Examples of waste include, but are not limited to the following:
- Damaging, destroying, or ruining materials or equipment
- Improper maintenance or intentional mistreatment of equipment
- Purchase of unneeded supplies or equipment
- Purchase of goods at inflated prices
- Failure to reuse or recycle major resources or reduce waste generation
- Abuse – Abuse refers to violations and circumventions of departmental or other applicable regulations which impair the effective and efficient execution of operations. Some examples of abuse are as follows:
- Unauthorized use of University equipment or supplies for non-University purposes, including but not limited to, computers, vehicles, software, databases, etc.
- An employee using University information to obtain new customers for his/her outside business
- Improper handling or reporting of money or a financial transaction
- Profiting by self or others as a result of inside knowledge
- Destruction or intentional disappearance of University records, furniture, fixtures or equipment
- Accepting or seeking anything of material value from vendors or persons providing services or material to the University for personal benefit
- Abuse of purchase order authority, such as false travel or expense reports
- Misconduct & Dishonesty – For purposes of this policy, misconduct and dishonesty are defined as but not limited to:
- Acts which violate the University's Standards of Conduct;
- Theft or other misappropriation of assets, including assets of the University, its customers, students, suppliers or others with whom the University has a business relationship;
- Misstatements and other irregularities in the University's records, including the intentional misstatement of the results of operations;
- Wrongdoing;
- Forgery or other alteration of documents;
- Fraud and other unlawful acts; and
- Any similar act.
D. Policy and Procedures
1. Deterrence
Deterrence consists of those actions taken to discourage the perpetration of fraud and limit the exposure if fraud does occur. Department heads are responsible for the implementation and maintenance of effective internal controls. The Internal Audit Department is responsible for assisting in the deterrence of fraud by examining and evaluating the adequacy and effectiveness of internal controls.
Fraud often occurs for the following reasons:
- Poor internal controls, especially disregard for University policies and procedures
- Management override of internal controls
- Collusion between employees and/or third parties
- Poor or non-existing ethical standards
- Lack of control over staff by their supervisors
2. "Red Flags"
The most frequently cited "red flags" of fraud are:
- Changes in an employee's lifestyle, spending habits or behavior
- Poorly written or poorly enforced internal controls, procedures, policies or security
- Irregular/unexplained variances in financial information
- Inventory shortages
- Failure to take action on results of internal/external audits or reviews
- Unusually high expenses or purchases
- Frequent complaints from customers
- Missing files
- Ignored employee comments concerning possible fraud
- Refusal to leave custody of records during the day by the employee
- Working excessive overtime and refusing to take vacation time off
3. Fraud Prevention
The following internal controls should minimize the risks and help prevent fraud:
- Detailed written policies and procedures and adherence to all policies and procedures, especially those concerning documentation and authorization of transactions
- Physical security and controlled access over assets such as locking doors and restricting access to certain areas
- Proper training of employees
- Independent review and monitoring of tasks by the department supervisor, such as approval processing of select items
- Separation of duties so that no one employee is responsible for a transaction from start to finish
- Clear lines of authority
- Conflict of interest and/or conflict of commitment statements which are enforced
- Rotation of duties in positions more susceptible to fraud
- Ensuring that employees take regular vacations
- Regular independent audits of areas susceptible to fraud
4. False Claims
The University is required by federal law to provide information to all of its employees, contractors and agents regarding the federal False Claims Act, administrative remedies for false claims and statements, the state False Claims Act and whistleblower protections under these laws. The federal and state False Claims Acts play an important role in detecting fraud, waste and abuse in federal health care programs.
a. Federal False Claims Act and Remedies
The federal False Claims Act was enacted to prevent the United States government from paying federal funds for fraudulent claims involving a good or a service. The law allows a civil action to be brought against a health care provider who:
- Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval to any federal employee;
- Knowingly makes, uses or causes to be made or used a false record or statement to get a false or fraudulent claim paid; or
- Conspires to defraud the government by getting a false or fraudulent claim allowed or paid.
False claims include knowingly:
- Billing for procedures not performed
- Falsifying information in a medical record
- Authorizing duplicate billing
- Falsifying claim forms to receive overpayment for services provided
Federal False Claims Act remedies include:
- A federal false claims action may be brought by the U.S. Department of Justice Civil Division.
- The False Claims Act allows a private individual or whistleblower, with knowledge of past or present fraud on the federal government, to sue on behalf of the government to recover stiff civil penalties. This is known as a Qui Tam case. If the government joins the lawsuit and prosecutes the entity suspected of fraudulent conduct and collects money which must be paid back to the federal government, the private individual who brought the suit, known as the Qui Tam Relator, is eligible to receive 15-25% of the proceeds of the recovery, depending upon the extent to which the Qui Tam Relator contributed to the prosecution of the action.
- Violation of the federal False Claims Act is punishable by a civil penalty of between $5,500 and $11,000 per false claim, plus three times the amount of damages incurred by the government.
- A statute of limitations limits the amount of time that may pass before an action may no longer be brought for violation of the law. Under the federal False Claims Act, the statute of limitations is six years after the date of violation or three years after the date when material facts are known or should have been known by the government, but no later than ten years after the date on which the violation was committed.
Federal law prohibits an employer from discriminating or retaliating against an employee in the terms or conditions or his/her employment because the employee initiated or otherwise assisted in a false claims action. The employee is entitled to all relief necessary to make the employee whole. This relief includes reinstatement with the same seniority status, two times the amount of back pay, interest on the back pay, and/ or compensation for any special damages sustained as a result of the discrimination.
b. Texas False Claims Act and Remedies
Texas has a state version of the False Claims Act that is substantially similar to the federal False Claims Act.
Offenses under the Texas False Claims Act are, in general, similar to those of the federal False Claims Act. However, under the Texas False Claims Act, a person may also be liable if he/she presents a claim for payment under the Medicaid program for a product or service that was rendered by an unlicensed provider or that has not been approved by a healthcare practitioner. The Texas False Claims Act also differs from the federal False Claims Act in that the civil penalty is greater for unlawful acts that result in injury to an elderly person, a disabled person or someone younger than eighteen.
The Texas False Claims Act has a whistleblower provision that prevents employers from retaliating against employees who report their employer's false claims. Texas also has several other false claims statutes that are intended to prevent fraud and abuse in the Texas Medicaid program. These laws generally prohibit the filing of any false or fraudulent claim or documentation in order to receive compensation from the Texas Medicaid program.
5. Billing Compliance
The University is committed to providing high-quality patient care and to complying with applicable laws and regulations. All claims for reimbursement made by or on behalf of the University shall adhere to applicable federal, state and local laws and regulations, the UTS Board of Regents' Rules and Regulations and University policies. The University will follow all legal and regulatory guidelines for billing hospital and physician services. Any contractors engaged to perform billing or coding services are expected to ensure that all billings for government and commercial insurance programs are accurate. The University shall collect only those amounts to which the institution is entitled and shall refund amounts billed and/or collected in error. Failure to abide by the applicable federal and state laws and regulations, the UTS Board of Regents' Rules and Regulations and University policies may lead to disciplinary action, up to and including termination or dismissal.
Unacceptable billing practices include, but are not limited to:
- Billing for items or services not accurately documented in the medical record;
- Billing for items or services that were not actually rendered;
- Billing for items or services that were not medically necessary; and
- Duplicate billing.
If you believe any unacceptable billing practices have occurred or have any billing compliance concerns, you should discuss the issue with your supervisor, contact the Health Science Center (HSC) Compliance Office at (903) 877-7323, or contact the HSC Compliance Hotline at (883) 442-5111.
6. Misconduct & Dishonesty
The University specifically prohibits all activities related to misconduct and dishonesty as outlined in the definition above and any other illegal activities in the actions of its students, employees, managers, executives and others responsible for carrying out the University's activities.
All employees and students must support the University fiduciary responsibilities and must cooperate with law enforcement agencies in the detection, investigation, and reporting of criminal acts, including prosecution of offenders. Every effort should be made to recover institutional losses.
Directors and supervisors must be familiar with the types of improprieties that might occur in their areas and be alert for any indication that such a defalcation, misappropriation or other fiscal irregularity has occurred.
Directors and supervisors, when made aware of such potential acts by subordinates, must immediately report such acts to their superiors, unless the superior is the perpetrating individual, in which case reports should be made using the compliance contact information provided below.
Directors and supervisors should not perform any investigative or other follow up steps on their own. All relevant matters, including suspected but unproved matters, should be referred immediately to those with follow up responsibility or using the compliance contact information provided below.
7. Reporting Fraud, Waste, Abuse, and/or Misconduct
All individuals who are employed by, affiliated with, under a contract or agreement, or otherwise under the control of the University, are required to report any activity that appears to be in violation of any local, state or federal law, including the federal or state false claims acts through the normal administrative channels or any other reporting paths described in this policy.
Any fraud, abuse, waste, and/or false claims that are detected or suspected must be reported immediately to the relevant office below.
HSC:
Main Campus:
You may also report suspected fraud, waste and abuse to the State Auditor's Office Hotline, 1–800–892–8348 (1– 800–TX–AUDIT). The State Auditor's Office provides additional information at its website (https://sao.fraud.texas.gov/ReportFraud/).
Possible federal false claims act violations are not required to be reported to the University first. Reports may be made directly to the federal Department of Justice or through the U.S. Health and Human Services Office of Inspector General Hotline number, 1–800–447–8477 (1–800–HHS–TIPS).
Professionally trained, non-University personnel handle the calls and forward the information to the appropriate Compliance Office to review the violation. Anonymity is maintained since employees are not required to identify themselves. The Executive Compliance Committee is responsible for ensuring that all reports are investigated and addressed appropriately.
8. Responsibility and Authority for Follow-up and Investigation
Internal Audit, Compliance Office, Chief of Police, Information Security Officer, Legal Affairs and Human Resources have authority to perform follow up and investigations as appropriate and should not contradict UT System or UT Board of Regent regulations in the performance of such investigations. The recipient of the report should notify the Internal Audit Department if the potential violation or misconduct meets the UT System Audit Office reporting requirements.
Properly designated members of the investigative team will have unrestricted access to all University records and premises, whether owned or rented, and the authority to examine, copy and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities (whether in electronic or other form) without the prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of investigative or related follow up procedures.
All investigations of alleged wrongdoing will be conducted in accordance with applicable laws, UT System and UT Board of Regent regulations, and University policies and procedures.
9. Retaliation
An employee who believes that he/she has experienced retaliation for making a report or assisting in an investigation related to any allegations described in this policy shall report this as soon as possible to the VP, Human Resources at (903) 877-7022 or a Compliance Office using the information provided above.
E. Responsibilities
See section D, Policies and Procedures.
F. Review
- January and August 2019 and April 2020 by HSC leadership
- 2022 by UT Tyler leadership
G. References
UT System Policy 118
United States Code Title 31
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.552.htm - Texas Government Code Chapter 552 Public Information
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.321.htm#321.022 - Texas Government Code Chapter 321.022 Coordination of Investigations
https://www.lbb.state.tx.us/Documents/GAA/General_Appropriations_Act_2020_2021.pdf - General Appropriations Act (81) Article IX Section 7.09Fraud Reporting
https://sao.fraud.texas.gov/ReportFraud/ - State Auditor's Office Hotline
http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.554.htm#554.001 - Texas Government Code Chapter 554 Protection for Reporting Violations of Law
APPROVED: 02/2022