Ann & Natalie’s Compliance Corner
Welcome back to Ann & Natalie’s Compliance Corner! This month, we clear up some confusion about the Deficit Reduction Act (DRA). Missed last month’s overview of the recently published Department of Health and Human Services guidance on increasing the security of your Electronic Protected Health Information (ePHI)? Click here.
On February 8, 2006 President Bush signed into law the Deficit Reduction Act (DRA) of 2005, which proposes to reduce Medicare and Medicaid spending by $11 billion over five years. Among other things, the law requires certain providers to “self-police” potential Medicaid fraud and waste by adopting new policies and employee education.
Most notable for athenahealth clients is Section 6032 of the DRA. This section applies to organizations making or receiving at least $5 million in Medicaid payments annually. It states that affected organizations must establish written policies and procedures that: 1) describe fraud and abuse prevention efforts, and 2) inform employees about federal and state false claims laws and whistleblower protections under those laws.
In addition, you should update your employee handbooks to:
- Describe the rights of employees to be protected as whistleblowers,
- Restate false claims laws, and
- Discuss the company’s internal policies and procedures for preventing fraud, waste, and abuse.
Generally, policies are required to be in writing and they need to be “detailed” and “specific.” However, without specific guidance from CMS or the relevant state Medicaid program, healthcare entities should adopt what they consider sufficiently detailed provisions.
If you think that Section 6032 applies to your practice, here’s what you should keep in mind:
- Affected entities should adopt what they consider sufficiently detailed provisions describing their anti-fraud policies and procedures, applicable anti-fraud statutes, and external whistleblower provisions.
- While Section 6032 does not impose live education or other training requirements, it is likely that some states may choose to do so. It’s important to remember that your practice may be subject to unique requirements, as individual states may interpret and implement the DRA provisions differently.
- The final CMS guidance states that organizations must comply with Section 6032 as of January 1, 2007, and that states have until March 31, 2007 to amend their Medicaid plans (unless the state has approval for delayed implementation). Yet, in early 2007, only three states’ false claims laws had been approved, and CMS held a national teleconference on January 11 to answer questions on ambiguous areas of the new mandate.
- At the time of publication, 17 states and the District of Columbia have state false claims laws that have been approved. On March 22, CMS issued final guidance to state Medicaid agencies on complying with Section 6032, titled “Employee Education About False Claims Recovery.” The final guidance is composed of seventy-one FAQs responding to questions including: definition of an entity, the $5 million threshold, discussion of contractors and agents, implementation deadlines, enforcement, and penalties.
Although the requirements of the DRA are still ambiguous, the government makes compliance with Section 6032 a condition of receiving Medicaid payment. Failure to meet the requirements could result in the forfeiture of all Medicaid payments during the period of noncompliance, and if the government finds that an organization knew, or should have known, that it was not meeting the requirements of Section 6032, the government may assert that all Medicaid claims were “false” and the practice may be subject to penalties under the False Claims Act or the Civil Monetary Penalty laws.
For the DRA of 2005, click here.
For the CMS 03.22.07 Final Guidance, click here.
Disclaimer: The content of Compliance Corner is for general informational purposes only and should not be interpreted as compliance guidance or advice. Consult your compliance advisor or attorney for compliance or legal advice on specific issues related to your practice or compliance program.
