Aug 25, 2006
In This Issue
Beware, healthcare providers in states with weak or nonexistent False Claims Acts (FCAs): the federal government is now “encouraging” states to enact state FCAs that in effect conform to a national standard.
On August 21, 2006, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services published guidance requiring states to conform their state FCAs to several key features of the federal FCA (31 U.S.C. §§ 3729-3733) in order to receive an enhanced share of any recoveries of funds under the state FCAs. The guidance implemented section 6031 of the Deficit Reduction Act of 2005 (codified at 42 U.S.C. § 1396h).
Section 6031 provides that where a state FCA meets certain requirements, the state’s share of any recovery under its FCA for fraud on the state’s Medicaid program shall be increased by 10%. Normally, a state’s portion of any recovery is equal to the state’s contribution to its total Medicaid budget. For example, pursuant to Section 6031, if a state with a compliant FCA contributes 40% to its Medicaid program and the federal government contributes 60%, the state’s share of any recovery under the FCA in connection with the Medicaid program will be 50% - 10% more than the 40% it would otherwise have received.
Section 6031 also identifies four general criteria a state FCA must meet in order to be eligible for the increased recovery percentage:
The OIG notice published on August 21 expands on these four general categories, especially with regard to the qui tam provisions. Specifically, the OIG notice sets forth the following requirements for a state FCA to comply under section 6031 (which are already contained in the cited sections of the federal FCA):
In order to qualify for the increased recovery percentage, state FCAs must comply with these requirements by January 1, 2007.
The bottom line: healthcare providers with Medicaid contracts in those states with weak or non-existent FCAs should watch developments in their state legislatures, which can be expected to either enact the federal FCA wholesale, or at least enact the provisions specified in section 6031 and the OIG notice. Compliance plans for providers in those states should be updated to reflect the new legal regime with regard to Medicaid claims in those states.
John F. Libby Mr. Libby represents business entities in complex civil litigation and criminal investigations and prosecutions. Mr. Libby, who served as an Assistant United States Attorney in Los Angeles from 1989 to 1995, is an experienced trial lawyer who is uniquely positioned to advise and represent clients in litigating, through trial and appeal if necessary, complex disputes with the government and private parties.
Helen R. PfisterPartner
© 2013 Manatt, Phelps & Phillips, LLP. All rights reserved.