MVES is required under federal and state law to have policies and procedures to prevent and detect fraud, waste, and abuse in federally funded health care programs. We are also required to educate employees about such laws.

Federal Law

The False Claims Act (FCA) imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services she knows she has not provided. The False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits a record that he knows (or should know) is false and that indicates compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim” may include a hospital that obtains interim payments from Medicare throughout the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.

In addition to its substantive provisions, the FCA provides that private parties may bring an action on behalf of the United States. 31 U.S.C. 3730 (b). These private parties, known as “qui tam relators,” may share in a percentage of the proceeds from an FCA action or settlement.

State Law

The same fraudulent acts are prohibited under state law. In addition, state law prohibits retaining property owed to the state, buying property from a state employee when the individual knows the employee is not authorized to sell it, creating false records to avoid or reduce debt to the state, and failing to disclose an inadvertent false claim upon discovery.


Under federal law, the civil penalty is not less than $5,000 or more than $100,000, plus three times the amount of damages sustained due to the fraudulent act. Under state law, the penalty is between $5,000 and $10,000, three times the damages sustained, plus expenses for the civil action required for recovery.

Whistleblower Protections

Mystic Valley Elder Services (MVES) is committed to operating in furtherance of its tax-exempt purposes and in compliance with all applicable laws, rules and regulations, including those concerning accounting and auditing, and prohibits fraudulent practices by any of its board members, officers, employees, or volunteers. This policy outlines a procedure for employees to report actions that an employee reasonably believes violates a law, or regulation or that constitutes fraudulent accounting or other practices. This policy applies to any matter which is related to MVES’ business and does not relate to private acts of an individual not connected to the business of MVES.

If an employee has a reasonable belief that an employee or MVES has engaged in any action that violates any applicable law, or regulation, including those concerning accounting and auditing, or constitutes a fraudulent practice, the employee is expected to immediately report such information to the Executive Director. If the employee does not feel comfortable reporting the information to the Executive Director, she is expected to report the information to the Director of Human Resources.

All reports will be followed up promptly, and an investigation conducted. In conducting its investigations, MVES will strive to keep the identity of the complaining individual as confidential as possible, while conducting an adequate review and investigation.

MVES will not retaliate against an employee in the terms and conditions of employment because that employee: (a) reports to a supervisor, to the executive director, the Board of Directors or to a federal, state or local Agency what the employee believes in good faith to be a violation of the law; or (b) participates in good faith in any resulting investigation or proceeding, or (c) exercises her rights under any state or federal law(s) or regulation(s) to pursue a claim or take legal action to protect the employee’s rights.

MVES may take disciplinary action (up to and including termination) against an employee who, in management’s assessment, has engaged in retaliatory conduct in violation of this policy.

In addition, MVES will not, with the intent to retaliate, take any action harmful to any employee who has provided to law enforcement personnel or to a court truthful information relating to the commission or possible commission by MVES or any of its employees of a violation of any applicable law or regulation.

Supervisors will be trained on this policy and MVES’ prohibition against retaliation in accordance with this policy.

MVES Policies and Procedures

MVES has established policies, procedures, and audit controls to prevent and detect fraud, waste, and abuse in the Medicaid program. These policies and controls ensure that:

a) recipients of federally funded long-term care services are eligible for such services;

b) services provided are appropriate, as determined through a comprehensive needs assessment;

c) that providers are unable to bill for more units of service than the amount authorized;

d) providers have internal controls to ensure accurate billing, which is verified at intermittent

audits of provider agencies;

e) MVES notifies Elder Affairs of suspected fraud or abuse and cooperates with law enforcement and other government entities responsible for investigation.

All MVES providers must have policies and procedures that educate all staff on the False Claims Act and state law regarding fraud, waste, and abuse; explain whistleblower protections; provides a process to report fraud, waste, and abuse; and established internal audit controls.

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