Whistleblower Lawyer Blog

Yesterday I enjoyed leading a panel discussion of the new State False Claims Acts, at the Southeastern Health Care Fraud Conference in Atlanta. Of particular interest to this audience was the new Georgia State False Medicaid Claims Act that became law in May 2007, which has qui tam whistleblower provisions similar to the federal False Claims Act.

Our audience of health care attorneys heard a detailed account of Florida's successes with its State False Claims Act by Mark S. Thomas, the Chief of Staff and Special Counsel of the Florida Agency for Health Care Administration. We also learned how the Georgia Attorney General's Office plans to implement the new State False Medicaid Claims Act in remarks by Charles M. Richards, Senior Assistant Attorney General of the Georgia State Health Care Fraud Control Unit.

Other excellent presentations were made in this seminar organized by my friends Steve Cowen of King & Spalding, LLP, and Joe Whitley of Alston & Bird, LLP. I am grateful to Joe and Steve for the opportunity to participate and explain the False Claims Act, the new Georgia State False Medicaid Claims Act and other state False Claims Acts, some of which have added interesting new wrinkles to health care compliance, by creating new theories of liability not found in the federal Act. (An article explaining some of the new thoeries of liability that these new State False Claims Acts introduce will appear in the October Georgia Bar Journal.)

To explain in depth this new whistleblower law to attorneys, as well as the federal False Claims Act and the new IRS Whistleblower Rewards Program, our firm has already scheduled the "First Annual Whistleblower Law Symposium" in Georgia at the State Bar of Georgia Headquarters in Atlanta on September 20, 2007. We are excited that joining us is the leader of Texas' already hugely successful effort to recover damages for Medicaid fraud, Pat O'Connell, the Chief of the Civil Medicaid Fraud Section of the Texas Office of Attorney General. Other nationally-known speakers will join us as well on September 20.

In February, 2006, President Bush signed into law the Deficit Reduction Act of 2005 (DRA). An obscure provision within this Act mandates that entities receiving greater than $5 million per year in Medicaid payments must educate their employees about “whistleblower” claims under the Federal False Claims Act. Under the DRA, effective January 1, 2007, as a requirement of continued eligibility for the receipt of Medicaid payments, any entity receiving annual payments of $5 million or more in Medicaid funds must have mandatory compliance and education programs in place for its employees to provide detailed information about the Federal False Claims Act. This education must include information provided to employees about administrative remedies, state laws pertaining to civil or criminal penalties, whistleblower protections, and the role of such laws in preventing and detecting fraud, waste, and abuse in federally funded healthcare programs.
Congress has clearly recognized that the government has a strong need to contain costs through increased fraud and abuse enforcement. Medicaid spending, like Medicare spending, is exponentially increasing. Medicaid enrollment increased from ten (10) million beneficiaries in 1967 to over 44.7 million beneficiaries in 2006 according to statistics published by the United States Department of Health and Human Services. Along with this increase in beneficiaries, Medicaid expenditures have also dramatically increased. In fiscal year 2005 Medicaid expenditures approximated twenty percent (20%) of total federal outlays.

The Centers for Medicare and Medicaid Services (CMS) in its fiscal year report for 2005 documented that $484.3 billion had been spent in the fiscal year 2005. Given this staggering amount of money, and because the percentage of the total federal outlay was expected to exceed twenty percent (20%) of the total federal budget, Congress enacted the mandatory employee education provisions about false claims recovery to encourage whistleblower lawsuits and, hopefully, thereby decrease fraud and abuse.

In addition to providing written policies for all employees, the mandatory policies and compliance programs must include detailed provisions regarding the employer’s policies and procedures for detecting and preventing fraud, waste and abuse. The written policies must include a specific discussion of federal and applicable state False Claims Acts, and the rights of employees to be protected from retaliation as whistleblowers. Ironically, as of the effective date of this provision, there is no state False Claims Act in Georgia. This is very discouraging. Nonetheless, this too may change depending upon the actions of the Georgia Legislature when it meets in 2007.

Section 6031 of the Deficit Reduction Act encouraged the enactment of state False Claims Acts by providing financial incentives for states to enact laws dealing with false or fraudulent claims (specifically including Medicaid claims) that parallel the federal False Claims Act. All states that enact state False Claims Acts are eligible for a ten percent (10%) increase in their share of Medicaid fraud recoveries. Many states have already availed themselves of this opportunity to participate in an increase share of Medicaid fraud recoveries but Georgia has yet to pass such legislation. Whether it will do so, of course, depends upon Governor Perdue and the Republican controlled State House and Senate.

Continue reading "New Compliance and Education Reforms Take Effect" »

The salutary intent of the Deficit Reduction Act was to require that employers educate employees about the Federal False Claims Act and, hopefully, address fraud and abuse by employer entities receiving $5 million dollars or more in federal funds under the Medicaid program. When the Deficit Reduction Act was passed in 2005, a debate emerged about whether the DRA education provisions mandating employee education about the Federal False Claims Act applied directly to healthcare providers and/or whether states receiving Medicaid had to pass implementing legislation to make the provision effective. In December of 2006, the Centers for Medicare and Medicaid Services (CMS) set the record straight. An “entity” includes a government agency, organization, unit, corporation, partnership or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structural or arrangement by which it exists) whether for profit or not for profit, which receives or makes payments under a state plan approved under Title XIX or under any waiver of such plan, totaling at least $5 million annually. In short, states do not have to implement legislation to make the provision effective and any entity receiving $5 million or more annually in Medicaid benefits must implement the mandatory education provision.

Continue reading "The CMS Clarifies the Mandatory Whistleblower Reforms" »