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False claims act compliance policy

Policy statement

Cardinal Health, Inc. and its divisions and majority-owned or controlled subsidiaries (“Cardinal Health”) is committed to complying with the information and education requirements of the U.S. Deficit Reduction Act of 2005 (“DRA”) relating to entities that receive or make annual (based on the federal fiscal year from October 1 to September 30) Medicaid payments of at least $5 million in any one state. These provisions of the DRA require such entities to have processes and procedures designed to detect and prevent health care fraud, waste and abuse.

Commitment to detecting and preventing health care fraud, waste, and abuse

Cardinal Health is committed to complying with all applicable federal and state laws, particularly those laws that are designed to address identified instances of health care fraud, waste and abuse. Cardinal Health expects its officers, directors, employees, contractors, and agents to act with integrity in all of their activities with, or on behalf of, Cardinal Health, to comply with all applicable laws and regulations and federal health care program requirements, and to maintain a reputation for ethical dealings.

Federal law

The Federal False Claims Act prohibits a person from knowingly filing a false or fraudulent claim for payment or knowingly using a false statement or representation in connection with filing a claim that seeks reimbursement from Medicare, Medicaid or other U.S. federally-funded programs. A person acts “knowingly” if the person has actual knowledge of the false information in the claim, acts in deliberate ignorance of the falsity of the claim, or acts in reckless disregard of the falsity of the claim. Penalties for violating the False Claims Act include up to three times the amount of damage sustained by the federal government, civil monetary penalties of between $5,500 and $11,000 per false claim, and/or exclusion from federally funded programs.

The False Claims Act permits a person with actual knowledge of false claims activity to file a lawsuit on behalf of the federal government. These so-called qui tam or whistleblower provisions of the False Claims Act contain detailed procedures for how to file such lawsuits. In certain circumstances, the person who files the lawsuit, known as a qui tam relator, may be entitled to share a percentage of any recovery received by the federal government as a result of the lawsuit. The False Claims Act also protects employees from retaliation or discrimination in the terms and conditions of their employment based on lawful acts of the employee done in furtherance of an action under the False Claims Act.

Federal law also contains criminal and administrative sanctions for false claims and statements that may be applicable to identified instances of health care fraud, waste, and abuse.

State law

A growing number of states have false claims acts that are either identical or similar to the Federal False Claims Act. Those statutes typically allow individuals to bring issues to the attention of the state government and possibly share in a portion of any recoveries. These laws also protect employees from retaliation or discrimination in the terms and conditions of their employment based on lawful acts done in furtherance of an action under the state false claims acts. A number of states also have statutes which impose civil and/or criminal penalties for fraud against state health care programs, including Medicaid. Additionally, a number of states provide for administrative penalties in cases of fraud against the Medicaid program. Finally, most states have criminal provisions of general application that prohibit fraud, larceny, and false statements to government agencies that may be applicable in addressing health care fraud, waste, and abuse.

Cardinal Health maintains information about such federal and state laws including false claims acts and provisions pertaining to individuals providing information to the government, as well as other anti-fraud provisions. For more information about these laws, please contact the Legal Department.

Compliance obligations

Cardinal Health entities that receive or make annual (based on the federal fiscal year from October 1 to September 30) Medicaid payments of at least $5 million in any one state (“Triggering Entities”) shall:

• include in their employee handbooks, if any, detailed information about the federal False Claims Act, administrative remedies for false claims and statements, state laws that create civil or criminal penalties for false claims and statements, and whistleblower protections under such laws as required by the DRA;
• provide all contractors and agents with a written notice containing detailed information about the federal False Claims Act, administrative remedies for false claims and statements, state laws that create civil or criminal penalties for false claims and statements, and whistleblower protections under such laws as required by the DRA (For purposes of this Policy, “contractors and agents” include those who, on behalf of a Triggering Entity (i) furnish or otherwise authorize the furnishing of Medicaid health care items or services, (ii) perform billing or coding functions, or (iii) are involved in monitoring of health care provided by the entity); and
• maintain written documentation that the information required by the DRA has been provided to all of their officers, directors, employees, contractors, and agents.

Application

As specifically identified in this policy, certain affirmative obligations set forth in this policy shall apply only to Triggering Entities. The educational information in this policy is communicated to all Cardinal Health majority-owned or controlled subsidiaries.

Reporting obligations

To ask a question, seek guidance or raise a concern about a fraud, waste, or abuse issue contact your supervisor or follow the procedures in the Reporting obligations policy. Anonymous reporting is permitted. Cardinal Health is committed to protecting those who, in good faith, ask questions or report suspected instances of fraud, waste, and abuse. See the Reporting obligations policy.

Scope

This policy applies to Cardinal Health, Inc., its divisions and majority-owned or controlled subsidiaries in the United States.

Effective date

19 July 2007

Responsible party

The Cardinal Health Chief Legal Officer is responsible for administering and amending this policy.

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