Fraud Enforcement and Recovery Act – Significant Changes in the Health Care Community

The False Claims Act (31 U.S.C. 3729) is the most important civil enforcement tool utilized by the U.S. Department of Justice (DOJ).  Last May, the Act’s provisions were further strengthened as a result of amendments contained under the “Fraud Enforcement and Recovery Act of 2009.”  These amendments have significantly increased the responsibility of medical professionals around the country.  Among the many changes, several are primarily pointed toward health care providers.  These amendments:

• Extended the whistleblower protection provisions to cover both “contractors” and “agents” in addition to employees who allege that they were subjected to retaliation when they tried to put an end to False Claims Act violations by their employer.  Prior to the recent amendments, the whistleblower provisions only typically applied to actual employees of health care providers.  Now, both “contractors” and “agents” may avail themselves of the Act’s whistleblower protections.
• Revised the definition of “obligation” to expressly include knowingly retaining mere overpayments despite the fact that a CMHC may have accidentally been overpaid.  Providers may now be liable under the False Claims Act, regardless of whether the overpayment was caused as a result of a mistake.  Providers may now find themselves subject to liability under the False Claims Act, including its penalty and damages provisions even though the overpayment accidentally occurred.
• Expanded the scope of Civil Investigative Demands (CIDs) to now make it easier for DOJ to use these investigative tools.  Additionally, the changes enhanced the ability of DOJ to issue CIDs.  From a practical standpoint, this will make it much easier for DOJ prosecutors to initiate investigations into potential False Claims Act violations.

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.