• False Claims Act Amendments
  • May 19, 2010
  • Law Firm: Adams and Reese LLP - New Orleans Office
  • Finally, following on 2009’s Fraud Enforcement and Recovery Act (part of the Stimulus Bill), PPACA contains further changes to the False Claims Act, seemingly most specifically aimed at increasing whistleblower litigation.

    Public Disclosure Parameter Altered

    Prior to PPACA, the “public disclosure” provision of the FCA prevented a federal court from taking jurisdiction in any whistleblower action where the claims made were “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or [GAO] report, hearing, audit or investigation, or from the news media.” 31 U.S.C. §3730(4)(A). Only if the whistleblower was the “original source” of the information would such an action be permitted, pre-PPACA.

    PPACA has likely rendered the “public disclosure” rule non-jurisdictional. The phrase “no court shall have jurisdiction” has been removed, and instead the Act states that such actions will be dismissed “unless opposed by the Government.” This new language arguably vests in the Government complete discretion as to whether whistleblower actions, previously not capable of being brought, may now proceed despite the “public disclosure” rule.

    Reporting of Overpayments

    Section 6402(a) of PPACA also contains a “report and return” requirement for overpayments. Under the new law, providers are legally obligated to report and return overpayments by the later of either 60 days after the overpayment is identified, or the date any corresponding cost report is due. The 60-day period begins when the knowledge of the overpayment is obtained. A missed deadline constitutes an automatic violation of the False Claims Act.

    Because this provision took effect upon the law’s signing (March 23, 2010), any pre-enactment overpayments known by providers must presumably be reported and returned within 60 days of the enactment date -- or by May 22, 2010. Worthy of note is the fact that the term “identified” is not defined -- an omission that will likely be the source of a great deal of discussion and debate in days to come over what does and does not qualify for this mandatory reporting requirement.

    Additional Support for Enforcement

    PPACA expands the jurisdiction of Recovery Audit Contractors (RAC’s) to Medicare Parts C and D, and to Medicaid. It also contains a $95 million first year increase in funding for federal enforcement actions. That amount grows to $250 over the first five (and more than $300 million over the first ten) years of the law’s enactment.


    At the end of the day, the conclusion that must be drawn from these changes in combination with what we are seeing on an almost daily basis in the rapidly increasing level of government enforcement activity is two-fold:

    1. Get into compliance -- take your compliance program VERY SERIOUSLY. If your facility or your practice does not yet have a formal compliance program, tailored to your operations, contact healthcare counsel and get one. If you do have a compliance program in place, take action now to be sure it is properly amended to reflect the changes imposed by PPACA.
    2. Stay in compliance -- train, monitor, audit, review, correct. A good compliance program (see conclusion one!) will require that these activities are ongoing on a regular basis. Do not let your guard down.

    Enforcement activities are on the rise. RAC’s, MIC’s, ZPIC’s, the OIG, CMS, the FBI, whistleblowers..., the list of types of enforcers is a very long list. The Government IS coming. And while it has never been an absolute requirement that all providers have a formal compliance program, the OIG leaves no room for doubt that the absence of such a program will be seen as a great negative in any investigation that takes place.

    Get in compliance and stay there. To coin a phrase, “the life you save may be your own.”