Grant Fraud

Definition: An intentional, deliberate deception to obtain an unlawful gain or deny a victim's right. 

Example: Billing for services that were never performed, intentionally making misleading statements, and knowingly accepting kickbacks or bribes.

Definition: The thoughtless, inefficient, or careless expenditure or consumption of resources.

Example: Purchasing unneeded supplies, failing to reuse or recycle resources, and incurring unnecessary costs due to inefficient practices.

Definition: Excessive or improper use of resources or authority, which can include both intentional and unintentional actions.

Example: Using government equipment or resources for personal gain, failing to report damage to property, and making decisions, including the awarding of grants favoring applicants based on personal relationships, biases, or even kickbacks, rather than merit.

Definition: Intentional deception or misrepresentation of facts to obtain unauthorized benefits from a healthcare program.

Examples:

• Double-billing: Submitting multiple claims for the same service.
• Phantom billing: Billing for a service visit or supplies that the patient never received.
• Unbundling: Separating components of a single procedure into individual codes so that the total billing results in a higher amount than the bundled rate.

Definition: A person who exposes wrongdoing within an organization, such as a company or government agency, by reporting illegal or unethical activities.

Example: Disclosing violations of laws, risks to public health and safety, environmental damage, or fraud.

Definition: When an employer takes adverse action against an individual (such as an employee, former employee, or a contractor) for reporting perceived misconduct, fraud, or other wrongdoing.

Examples:

• Firing, demoting, harassing, or otherwise punishing an employee.
• Blacklisting or interfering with future employment opportunities or awards.

Definition: A grant is a legal instrument of financial assistance between a Federal agency and a recipient or between a pass-through entity and a subrecipient, consistent with specific Federal Code.

Example: A grant is a document that is used to give funds to an individual or organization to fund a specific project or purpose. Grants are typically awarded by government agencies, private foundations, or corporations to support public services, research, or other activities that align with the grantor's mission.

A grant is not used to acquire property or services for the Federal agency or pass-through entity's direct benefit or use. It does not include an agreement that provides only: (1) direct cash assistance to an individual, (2) a subsidy, (3) a loan or loan guarantee, or (4) insurance.

Case Example: [Fictitious Example] A Federal agency awarded ADPH $1,000,000 to expand emergency response readiness in rural Alabama. The grant allowed ADPH to use 10% of the funds for administrative purposes, to include expenses for staff, supplies, and equipment. The remaining 90% was required to be distributed within the rural communities to expand communication capabilities. Forty-five of Alabama's sixty-seven counties applied for and were awarded grants under this program. Grants were awarded to rural hospitals, volunteer fire departments, local emergency management agencies, and public schools to purchase XLT-3000 Communication Radios and Base Transmitter.

The funding instrument used between the Federal agency and ADPH was a grant.

The funding instruments used between ADPH and the 45-subrecipient agencies were grants.

Definition: Legally enforceable agreement between two or more parties that creates mutual obligations. It is a promise or set of promises that creates legal duties and can be enforced in a court of law if one party fails to meet their obligations. For the purpose of Federal financial assistance, a contract is a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award. A contractor is an entity that receives a contract.

Example: A Federal agency, pass-through entity, or subrecipient would use a contract to purchase property or services with federal funds when purchasing items for their own use.

Case Example: Refer to the fictitious Case Example above. ADPH used 10% of the grant funds for its own expenses (personnel costs, supplies, and equipment). When ADPH purchases the supplies or the equipment, they will use a contract instrument instead of a grant to make the purchases.

Definition: Unlawful taking and carrying away of another person's property with the intent to permanently deprive them of it.

Example: Common examples of theft include shoplifting, picking a pocket, or stealing from a stranger. From a grant perspective, theft can be committed by someone who is outside or within the agency. It can involve taking the cash box, inventory, or assets.

Definition: The fraudulent misappropriation of property by a person to whom it was entrusted.

Example: The customer gave the cashier $100 for the sale, but the cashier put the money in her pocket instead of the cash register.

Definition: A statement or request made to the government for payment or to conceal an obligation that is knowingly false, fictitious, or fraudulent.

Examples:

• A doctor submitting a bill to Medicare for services that were not provided.
• A contractor submitting an invoice to the government for a different price than the actual cost.
• A staff member alters an invoice to change the address, invoice date, description of services, or other information on an invoice.

Definition: False or misleading requests for payment submitted to an insurance provider or government program, which can include billing for services not rendered, upcoding for more expensive services, or submitting claims for medically unnecessary procedures.

Example: A clinic bills an insurer for home health care hours that were never delivered.

Definition: A secret and dishonest payment made to someone in a position of power or influence to secure or reward a business deal or contract.

Example: A worker in a business receiving a kickback from a vendor for approving an inflated invoice for goods or services.

Definition: The act of persuading someone to enter into an agreement, like a grant or contract, through false or misleading statements, or by a bribe or promising a kickback. 

Examples:

• A contractor/grant recipient offers an agency official a luxury vacation (personal benefit) to secure a recommendation for the lucrative contract/grant with the agency.
• The applicant for a grant falsely represents that their company meets the specifications.