Federal law calls for employee education on false Medicaid claims recovery

Whistleblowers can receive 15% of the final judgment for recovered funds under the federal statute.

A new statute requires any entity that receives over $5 million annually in Medicaid payments to educate its employees on false claim laws and grants whistleblowers a portion of any recovered funds.

The requirement is one several new methods being tried by the federal government to monitor health care spending, according to Brian Flood, Esq, Texas' Inspector General for the Health and Human Services Commission.

"I believe you're seeing a push at the federal level, and even the state level, to begin to try to get a handle on Medicare and Medicaid expenses," he told Orthopedics Today. "In this case, Medicaid has generally been unregulated at the federal level. Since its inception, it has been a state-run program, and so there has been a push at the federal level to become more involved with the regulation of Medicaid," Flood said.

Under Section 6032 of the Deficit Reduction Act (DRA) of 2005, entities must inform vendors, contractors, workers and related groups about state and federal false claims acts. False claims can range from billing for services not rendered to contract fraud, Flood said.

The statute allows whistleblowers who expose false claims to receive 15% of the final judgment and provides protection from retaliation. The Centers for Medicare and Medicaid Services, individual states and the Department of Health and Human Services Office of Inspector General all can potentially enforce the law. States must also include terms for the regulation in their state plans by March, Flood said.

The statute took effect January 1 and is already causing headaches for contractors and vendors. "It's not a simple event and that's why the industry is struggling with it. Although it looks simple on paper, its application gets fairly convoluted or overlapping," Flood said.

For example, an orthopedic surgeon contracted to several highly paid facilities would have to adopt the policies of each center. "And to add one more layer of complexity, if the doctor is paid directly, and receives $5 million or more in Medicaid funds, he must create policies and procedures for his own practice and employees," Flood said. Confusion also remains over how to accomplish the education requirements, he noted.

The statute is just one of several new Medicaid enforcement initiatives in the DRA, which includes the creation of the Medicaid Integrity Program. "What should be focused on as soon as they can implement that [education program] is the overall effect of these multiple chapters being passed, because you now have three new federal sources of audit for your Medicaid practice that did not exist prior to January 1. [That] needs to be fundamentally understood — the federal government will be directly auditing them for their Medicaid practices on top of state audits," Flood said.

Editor' note: Look for additional coverage of this issue in the March edition of Orthopedics Today.

For more information:
More information on the Deficit Reduction Act of 2005 is available on the Centers for Medicare and Medicaid Services Web site: www.cms.hhs.gov/DeficitReductionAct.
Brian Flood, OIG, CHC, CIG, Esq, Inspector General, Texas Health and Human Services Commission, P.O. Box 85200, Austin, TX 78708-5200, 512-424-6500, OIG@hhsc.state.tx.us.