The article is titled, The False Claims Act: Recent Changes Affecting Health Care Entities
The False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., was enacted in 1863 during the presidency of Abraham Lincoln. The FCA, also known as the Lincoln Law, was established to prevent pricing fraud by persons and companies selling supplies to the Union Army during the Civil War. The original FCA contained a qui tam provision that allowed citizens, on behalf of the United States, to sue companies or individuals for false or fraudulent billings submitted to the government. The current version of the FCA still allows for qui tam actions for false or fraudulent claims. While the FCA applies to any false claim submitted to the
In order to further combat health care fraud and abuse, Congress enacted the Deficit Reduction Act of 2005 (“DRA”),
According to § 6032, the entity must include this information in its employee handbook. CMS indicates that an entity that does not have an employee handbook is under no obligation to create one. However, CMS does indicate that it is the entity’s responsibility to disseminate the written policies.
All health care entities subject to § 6032 were required to comply with the provisions of § 6032 by January 1, 2007. The penalty for non-compliance is high—health care providers can be excluded from participation in the Medicaid program. In addition, failure to establish and distribute false claims policies could result in false claims exposure. Furthermore, if a false claim action is brought against an entity and the entity is found liable, the entity may have to pay treble damages to the government.
If history is any indication,
In the future, it is likely that all entities, whether receiving more or less than $5 million in Medicaid payments, will be required to comply with § 6032’s false claims and anti-fraud policies. Additionally, if § 6032 helps curtail Medicaid spending, fraud, and abuse, it is plausible that Congress will enact similar policies for the Medicare program. Due to the DRA’s employee education requirements and state incentive to create false claims acts, the future holds a strong likelihood of increased false claims investigation and litigation.
Amy L. Rothman is a health care litigation attorney at Flaherty, Sensabaugh & Bonasso, PLLC. For questions, she can be reached at (304) 345-0200.
UPDATE: On March 20, 2007, CMS issued DRA 6032 - Employer Education About False Claims Recovery - Frequently Asked Questions an additional guidance document on interpretation of the new regulations. Additional guidance materials can be found under the State Medicaid Directors Letters section of the CMS website under Final Guidance Regarding Employee Education for False Claims Recovery.