Certified in Healthcare Compliance (CHC) Practice Test 2025 - Free CHC Practice Questions and Study Resources

The False Claims Act is crucial in the context of healthcare compliance because it specifically targets individuals and entities that commit fraud against governmental healthcare programs such as Medicare and Medicaid. This law imposes liability on those who knowingly submit false claims for payment or who engage in deceptive practices to obtain government funds. The act serves to deter fraud by allowing the federal and state governments to pursue monetary damages and penalties against fraudsters, thereby protecting taxpayer money.

In addition, the False Claims Act includes provisions that encourage whistleblowers to report fraudulent activities by offering them a portion of the recovered funds, which aligns with the concept of preventing and addressing fraud in healthcare. Furthermore, while it is related to whistleblower protections, the act’s primary purpose is focused on fraud liability, making option B the most accurate choice in defining the essence of the False Claims Act.