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The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

The $5 Million Question – Are You Complying with Section 6032 of the DRA?

Some things just tend to slip through the cracks. The DRA seems to be one of them for many providers. This article gives you key points and language that will help you get your policies and employee handbook DRA compliant if you need to catch up.

The Deficit Reduction Act of 2005 (the "DRA"), was signed into law February 8, 2006, and was, in part, intended to bolster Medicaid fraud and abuse enforcement. The Act continues to impact health care providers, but some remain unaware of its requirements or have still failed to fully implement them. We know the government has increased its vigilance regarding fraud and abuse, and that it encouraged greater compliance efforts. So hospitals are well advised to do a DRA checkup.

The Act Impacts Entities Receiving $5 Million in Medicaid and Their Agents/Contractors.

Definition of Entity.

A State Guidance Letter issued on December 13, 2005 by CMS to the State Medicaid Directors provides that an "entity" includes: "a governmental agency, organization, unit, corporation, partnership, or other business arrangement (including any Medicaid managed care organization, irrespective of the form of business structure 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 $5,000,000 annually."

The State Guidance Letter also provided that: "If an entity furnishes items or services at more than a single location or under more than one contractual or other payment arrangement, the provisions of section 1902(a)(68) apply if the aggregate payments to that entity meet the $5,000,000 annual threshold. This applies whether the entity submits claims for payments using one or more provider identification or tax identification numbers."

Definition of "Agent" or "Contractor."

In the same letter, CMS stated that a "'contractor' or ‘agent' includes any contractor, subcontractor, agent, or other person which or who, on behalf of the entity, furnishes, or otherwise authorizes the furnishing of Medicaid health care items or services, performs billing or coding functions, or is involved in monitoring of health care provided by the entity."

Further, “it is the responsibility of each entity to establish and disseminate written policies which must also be adopted by its contractors or agents.” During a follow-up CMS Teleconference in 2007, a number of questions were raised about how CMS expected entities to ensure that contractors and agents adopted an entity's written policies to ensure that these contractors and agents received information on state and federal false claims act provisions. Moreover, a number of callers asked whether contractor agreements should be amended to include this as a requirement. CMS does not believe the law requires an entity to amend its agreements and said in the teleconference that it wants entities to have flexibility in determining how best to comply with the law. Accordingly, it appears that while dissemination of information and regular communication with the contractors and agents and regular communication is advisable, comprehensive reform of their policies and procedures is not yet necessary.

Sample Language for Compliance

Section 6032 of the DRA requires entities to establish written policies and procedures related to laws enforcing false claims and statements, as well as whistleblower protections, for all of its employees and management. The law also extends this obligation to the contractors or agents.

Entities are required to provide information in their policies and procedures on their process for detecting and preventing fraud, waste, and abuse. Their employee handbooks must contain a specific discussion of the fraud, waste, and abuse laws, the rights of employees to be protected as whistleblowers, and the entity's policies and procedures for detecting violation of these laws.

While the DRA does not require specific language, and while there is not a single "right way" to address this requirement in your policies and employee handbook, the following language may be helpful to get you started. It provides a description of the DRA requirements, the federal false claims act, and Louisiana law relating to false claims and statements, and whistleblower protection.

The Deficit Reduction Act of 2005.

The Hospital is committed to compliance with the Deficit Reduction Act of 2005 (DRA) and in accordance with the DRA has established written policies and procedures to inform employees and others about federal and state false claims and whistleblower laws including:

§ Establishing detailed written policies contained in the Compliance Program regarding the Hospital’s policies and procedures for detecting and preventing fraud, waste and abuse.

§ Providing detailed information to employees, agents and contractors about the False Claims Act and administrative remedies, state laws on criminal penalties for false claims or statements, and whistleblower protection.

§ Providing information in the Employee Handbook to educate employees and others about federal and state false claims and whistleblower laws.

§ Providing periodic training to employees, agents and contractors about federal and state false claims and whistleblower laws.

The False Claims Act.

Sections 3729 to 3733 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who: knowingly presents, or causes to be presented, to an officer or employee of the United States government a false or fraudulent claim for payment or approval; knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; conspires to defraud the government by getting a false or fraudulent claim allowed or paid; has possession, custody, or control of property or money used, or to be used, by the government and, intending to defraud the government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without completely knowing that the information on the receipt is true; knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, who lawfully may not sell or pledge the property; or knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the government sustains because of the act of that person, with certain exceptions.

2. The Attorney General shall diligently investigate violations of the above, and if the Attorney General finds that a person has violated or is violating the law, then he/she may bring a civil action against the person.

3. A person may bring a civil action for the violation of the above for the person and for the United States government. The action shall be brought in the name of the government. If the government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to certain limitations, and may have a right to share in a recovery if certain conditions are met.

Administrative Remedies for False Claims and Statements.

Sections 3801 to 3812 of the Title 31 of the United States Code provide in pertinent part that:

1. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that a person knows or has reason to know is false, fictitious, or fraudulent; includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent as a result of such omission, and is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Such person may also be subject to an assessment of twice the amount of the false, fictitious, or fraudulent claim, or the portion of such claim, which is determined to be in violation of the law.

2. Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that the person knows or has reason to know asserts a material fact which is false, fictitious, or fraudulent as a result of such omission; and contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such statement.

State Laws Pertaining to Civil or Criminal Penalties for false claims or statements and whistleblower protection.

1. The Louisiana Medical Assistance Program Integrity Law, La. R.S. 46:437.1 et seq, is aimed at combating and preventing fraud and abuse and negotiating the adverse effects of such activity on fiscal and program integrity. The Louisiana Department of Health and Hospitals, the Attorney General, and private citizens of Louisiana are designated by the Louisiana Legislature as persons who can pursue civil monetary penalties, liquidated damages, or other remedies to protect the fiscal and program integrity of Louisiana’s Medical Assistance Programs from healthcare providers and other persons who in engage in fraud, misrepresentation, abuse, or other ill practices. A provider who violates the Louisiana Medical Assistance Program Integrity Law may be subject to state action including sanctions, injunctive relief, and forfeiture of property for payment of recovery.

Louisiana law requires provider agreements which include the agreement of healthcare providers to comply with federal and state laws and rules pertaining to medical assistance programs, nondiscrimination, licensing requirements, medical necessity requirements, and requirements that goods, services or supplies only be provided when they are within the scope and quality of standard care. Further, the provider must agree to report and refund any monies received in error or in excess of the amount to which the healthcare provider is entitled.

Louisiana law prohibits the solicitation, receipt, offer or payment of any remuneration including but not limited to kickbacks, bribes, rebates, or payments, directly or indirectly, overtly or covertly, in cash or in kind in return for referrals to a healthcare provider, furnishing healthcare services or supplies, or to obtain patient identifying information. Louisiana law recognizes the safe harbor exceptions created under federal regulations.

Louisiana authorizes a civil action in state court to seek recovery from those who violate the state’s Medical Assistance Program Integrity Law which may be instituted by the Secretary of the Department of Health and Hospitals or the Attorney General.

Even though the requirements of DRA Section 6032 have been mandatory since 2006, the lack of guidance from both federal and state regulatory bodies has generally resulted in a slow implementation of these standards. However, these regulations are currently enforceable, and with a government emphasis on fraud and abuse, this is an area in which acting slowly can prove costly. This article gives hospitals not just a reminder, but also a jumpstart in getting compliant.

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