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PPACA Changes to Fraud and Abuse Laws

September 30, 2010 | Comments Off on PPACA Changes to Fraud and Abuse Laws
Posted by Sharlene Hunt

The Patient Protection and Affordable Care Act (PPACA) contains a number of changes that impact the fraud and abuse provisions under the federal Medicare and Medicaid laws.  PPACA also provides additional funding to boost enforcement activity by the government, and contains a number of provisions broadening the government’s authority relating to fraud and abuse in the Medicare and Medicaid programs.  These changes will undoubtedly result in increased enforcement action under the fraud and abuse laws.

For providers, one of the important provisions contained in PPACA relates to the obligation to report and return overpayments.  In May 2009, the Fraud Enforcement and Recovery Act (FERA) was adopted, which revised the False Claims Act to expand the definition of a “claim” to include the retention of an overpayment.  Under FERA, a provider who knowingly avoids the obligation to pay money to the government is liable for civil monetary penalties plus treble damages under the False Claims Act.  Thus, False Claims Act liability attaches to the retention of an overpayment, or a so-called reverse false claim.

Under PPACA, a healthcare provider now has the obligation to report and return the overpayment by the later of 60 days after the date the overpayment is identified or the date any corresponding cost report is filed (if the provider is required to file cost reports).  Further clarification of these provisions may be forthcoming in regulations, such as clarification of when an overpayment is “identified”.  However, any provider who determines it has received an overpayment should immediately take action to identify the scope of the overpayment and should commence the process for returning the overpayment.  Due to the tight time frame for reporting, having procedures in place to follow before being faced with such a situation will make it easier on all concerned if such an event occurs.

Other changes adopted through PPACA have made it easier for whistleblowers to bring actions on behalf of the federal government, provide for expanded screening and oversight of new providers, and expand the application of civil monetary penalties.  PPACA also allows the federal government to exclude a provider for obstructing an investigation, and makes a violation of the antikickback statute an offense under the False Claims Act.  Proposed regulations that address expanded screening, moratoria on payments, guidance regarding cross-terminations under Medicare and Medicaid, and requirements for suspension of Medicare and Medicaid payments based on “credible allegations of fraud” were published by CMS on September 23rd.

PPACA further directed the Department of Health and Human Services to issue a self-disclosure protocol under the Stark laws.  This latter change is in response to action taken by the Office of the Inspector General in March of 2009, when the OIG indicated it would no longer accept self-disclosures for Stark violations unless they also constituted a violation of the antikickback law.  The new self-disclosure protocol for Stark law violations was issued on September 23rd.


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