Scenario

• Suppose a small family medicine practice outsources its billing and collection activities to a reputable, nationally known company.
• The billing company's services to the practice include reviewing and coding claims for services provided by the practice.
• The practice has an office manager who is the primary point of contact with the billing company.

Before the practice retained the billing company, the office manager was responsible for reviewing claims after they were coded by the physicians but before they were billed.

• Six months after the practice retains the billing company, collections are up significantly.
• The office manager notices that before the billing company was retained, 25% of the practice's office visits were coded at level 4 or level 5.
• Since the billing company was retained, 50% of the practice's office visits were coded at level 4 or 5.
• The office manager does not disclose this information to anyone else in the practice.
• A government audit later reveals that the billing company had improperly upcoded 25% of the practice's claims for office visits.

Questions

1. Did the practice have knowledge of the upcoded claims for purposes of the False Claims Act?
2. Why or why not?