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In February of 2006, President Bush signed Public Law 109-171, The Deficit Reduction Act of 2005, into law. The new law requires that all employers which recieve more than $5,000,000 a year in Medicaid transactions put new policies into effect which will minimize fraud, waste and abuse in the Medicaid system. The law’s text is very general and there is currently no administrative guidance as to what these new policies should include.
Beginning January 1, 2007 the federal government will require all affected employers establish written policies to be available for all employees and contractors, making those individuals aware of the Federal False Claims Act and informing them about the consequences of filing any false claim for payment with the federal government. In addition to making employees aware of the provisions of the False Claims Act and its consequences, employers will also need to inform employees of any provisions in state law which relate to filing false claims.
Employers must also make employees aware that they are entitled to whistleblower protections if they report the filing of a false claim by their employer to the appropriate authorities after first bringing it to the attention of a supervisor. Employers are required to include in these policies detailed provisions regarding the employer’s procedures for detecting and preventing fraud, waste and abuse.
The same information contained in these employer policies must also be provided in any employee handbook the company distributes.
Congress is requiring the new policies in an effort to streamline the network of federal entitlement programs in preparation for the impending retirement of the “baby boom” generation. According to a December 20th, 2005 Budget Committee news release, Senator Judd Gregg explained that by the year 2030 20% of the Gross National Product will be spent on Social Security, Medicare, and Medicaid.
According to Senator Susan Collin's office, the Center for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services, plans to issue guidance within the next few months.
If you would like assistance in preparing a policy, please contact Clare Hudson Payne at 207-947-0111 for further information.
This alert is provided as general information, and is not a substitute for legal or other professional
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