Health Care E-Bulletin: Health Care Providers May Be Subject to New ''Whistleblower'' Employment and ''False Claims'' Education and Compliance Policy Requirements
April 4, 2006
Hospitals, nursing homes, and other health care providers that receive more than $5 million a year in reimbursement from State Medicaid programs must soon develop and publish “whistleblower” and “false claims” prevention and detection policies to all of their employees and contractors. As part of the massive Deficit Reduction Act of 2005 passed by Congress in late January 2006, this new federal law effectively mandates that all providers receiving more than $5 million in Medicaid reimbursements annually:
As you may know, throughout the 1990s and continuing to today, the Government has been very vigorous in its “fraud and abuse” enforcement activities. The federal False Claims Act, probably the Government’s single most powerful “weapon” in its enforcement arsenal, imposes fines of $5,000 to $10,000 per “false claim”, plus up to three-times the amount of the claims in question, against anyone involved in making or receiving a false or fraudulent claim for payment to the United States government. Largely because of litigation started by “whistleblowers,” the Government has recovered more than $15 billion in settlements and fines through the federal False Claims Act.
In this era of active Government’s False Claims enforcement activity, the Office of Inspector General has urged hospitals, nursing homes, physician groups and virtually every other type of health care provider to implement formal “corporate compliance” plans that, among other things, address potential liability under the False Claims Act and other aspects of compliance with the myriad of reimbursement and other laws affecting health care providers. Until now, the development of such compliance plans, technically, has been “voluntary.” With this new Medicaid legislation, however, the implementation of such compliance policies and procedures will now be mandatory for providers affected by this law. Therefore, such providers who have not yet implemented compliance plans should do so in the very near future. Additionally, for those providers affected by this new law that have already implemented compliance policies and procedures, now is the time to review and update your compliance policies and employee handbooks to ensure they are complete, consistent with each other, and compliant with the new – and existing – laws.
Some industry watchers are calling the newest provisions a Government signal to all providers “to take compliance seriously.” Therefore, all providers – even if not directly affected by this new provision – can benefit by developing (or updating) their corporate compliance plans. Several attorneys in our Health Care Practice Group, who work extensively in the area of regulatory health care law, have helped providers develop their compliance plans. Additionally, because our Health Care Practice Group also includes labor and employment lawyers, we are able to provide the necessary comprehensive assistance in coordinating providers’ compliance plans with their personnel policies, handbooks, and employee education. So, as needed, please feel free to call the Taft attorney with whom you work most often or any of the Health Care Practice Group members listed to the right of this bulletin.
- establish written policies for all contractors, agents and employees of the provider (including management) that give detailed information about the federal False Claims Act, including its penalties for false claims and statements, any State laws pertaining to civil or criminal penalties for false claims and statements, and all whistleblower protections under such laws, with respect to the role of such laws in preventing and detecting fraud, waste, and abuse in Federal health care programs; and
- include in any employee handbook for the provider, a specific discussion of the federal and State “false claims” laws, the rights of employees to be protected as whistleblowers, and the provider's policies and procedures for detecting and preventing fraud, waste, and abuse.
As you may know, throughout the 1990s and continuing to today, the Government has been very vigorous in its “fraud and abuse” enforcement activities. The federal False Claims Act, probably the Government’s single most powerful “weapon” in its enforcement arsenal, imposes fines of $5,000 to $10,000 per “false claim”, plus up to three-times the amount of the claims in question, against anyone involved in making or receiving a false or fraudulent claim for payment to the United States government. Largely because of litigation started by “whistleblowers,” the Government has recovered more than $15 billion in settlements and fines through the federal False Claims Act.
In this era of active Government’s False Claims enforcement activity, the Office of Inspector General has urged hospitals, nursing homes, physician groups and virtually every other type of health care provider to implement formal “corporate compliance” plans that, among other things, address potential liability under the False Claims Act and other aspects of compliance with the myriad of reimbursement and other laws affecting health care providers. Until now, the development of such compliance plans, technically, has been “voluntary.” With this new Medicaid legislation, however, the implementation of such compliance policies and procedures will now be mandatory for providers affected by this law. Therefore, such providers who have not yet implemented compliance plans should do so in the very near future. Additionally, for those providers affected by this new law that have already implemented compliance policies and procedures, now is the time to review and update your compliance policies and employee handbooks to ensure they are complete, consistent with each other, and compliant with the new – and existing – laws.
Some industry watchers are calling the newest provisions a Government signal to all providers “to take compliance seriously.” Therefore, all providers – even if not directly affected by this new provision – can benefit by developing (or updating) their corporate compliance plans. Several attorneys in our Health Care Practice Group, who work extensively in the area of regulatory health care law, have helped providers develop their compliance plans. Additionally, because our Health Care Practice Group also includes labor and employment lawyers, we are able to provide the necessary comprehensive assistance in coordinating providers’ compliance plans with their personnel policies, handbooks, and employee education. So, as needed, please feel free to call the Taft attorney with whom you work most often or any of the Health Care Practice Group members listed to the right of this bulletin.
