Labor E-Bulletin - Employees and Contractors of Medicaid Fund Recipients Subject to New ''Whistle-Blower'' Publication Requirments
March 27, 2006
Health care providers that receive more than $5 million a year from Medicaid must soon publish “whistle-blower” policies to employees and to contractors.
While many employers already publish comprehensive compliance programs that address potential liability under the False Claims Act, the new legislation presents an opportunity for those employers affected by the new provision to review and revise their compliance policies and employee handbooks to ensure they are complete and compliant with the new law.
The new law requires that, as a condition of receiving federal funds, state Medicaid plans require that entities receiving more than $5 million:
The new Medicaid requirement comes as part of the Deficit Reduction Act of 2005.
Because employee and contractor education on false claims would be a condition of receiving Medicaid funds, employers who do not comply may not be reimbursed by Medicaid. The effective date of this new policy requirement depends on the state Medicaid program, but would be January 1, 2007, at the earliest.
The federal government has recovered more than $15 billion through the federal False Claims Act since 1986. Given the amount of money that is at stake, some industry watchers are calling the newest provisions Congress’s signal to providers “to take compliance seriously.”
Please consult your Taft attorney for more detailed information about how the new requirement applies to your organization and its employees.
While many employers already publish comprehensive compliance programs that address potential liability under the False Claims Act, the new legislation presents an opportunity for those employers affected by the new provision to review and revise their compliance policies and employee handbooks to ensure they are complete and compliant with the new law.
The new law requires that, as a condition of receiving federal funds, state Medicaid plans require that entities receiving more than $5 million:
(A) establish written policies for all employees of the entity (including management), and of any contractor or agent of the entity, that provide detailed information about the False Claims Act . . . , administrative remedies for false claims and statements . . . , any State laws pertaining to civil or criminal penalties for false claims and statements, and 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 . . . ;The federal False Claims Act (31 U.S.C. §§ 3729-3733) imposes fines of $5,000 to $10,000, plus up to three-times the amount of the claim in question, against anyone involved in making or receiving a false or fraudulent claim for payment to the United States government. The Act also provides for monetary rewards and other protections for whistleblowers. States that do not already have parallel provisions must pass state false claims acts or lose federal funding of their state Medicaid programs.
(B) include as part of such written policies, detailed provisions regarding the entity's policies and procedures for detecting and preventing fraud, waste, and abuse; and
(C) include in any employee handbook for the entity, a specific discussion of the laws described in subparagraph (A), the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting and preventing fraud, waste, and abuse.
The new Medicaid requirement comes as part of the Deficit Reduction Act of 2005.
Because employee and contractor education on false claims would be a condition of receiving Medicaid funds, employers who do not comply may not be reimbursed by Medicaid. The effective date of this new policy requirement depends on the state Medicaid program, but would be January 1, 2007, at the earliest.
The federal government has recovered more than $15 billion through the federal False Claims Act since 1986. Given the amount of money that is at stake, some industry watchers are calling the newest provisions Congress’s signal to providers “to take compliance seriously.”
Please consult your Taft attorney for more detailed information about how the new requirement applies to your organization and its employees.
