Fraud and Abuse Provisions in the Deficit Reduction Act of 2005
Joel M. Hamme & Claire Licastro
June 2006
On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005 (DRA 2005). Some of the savings that the government anticipates from the DRA 2005 will result from changes to federal health care programs, including changes designed to reduce fraud, waste and abuse. Certain provisions in the DRA 2005 reflect congressional desire to enlist States’ and employers’ help in combating fraud, waste and abuse in the Medicaid program. One of these provisions, Section 6032, will require certain employers to change their written policies and handbooks to incorporate new employee education components about whistleblower laws and protections.
Specifically, Section 6032 of DRA 2005 provides that, effective January 1, 2007, any entity that makes or receives at least $5 million in annual payments under a State Medicaid program must undertake certain measures. These measures include:
(1) establishing written policies for all of their employees that furnish detailed information on the federal False Claims Act, federal administrative remedies under that act, applicable State false claims acts, and whistleblower protections under these laws;
(2) including provisions as part of those policies in the entity's policies and procedures for detecting and preventing fraud, abuse, and waste; and
(3) including in employee handbooks a specific discussion of these various laws, the rights of employees to be protected as whistleblowers, and the entity's policies for detection and prevention of fraud, abuse, and waste.
We are working with clients who have questions on this provision and who will need to implement its requirements. Should you have such questions or need, please do not hesitate to contact us at 202.466.6550 or joel.hamme@ppsv.com.
