Whistleblower Experts Worry New Bill Will Hinder Key Weapon Against Fraud

WASHINGTON, September 9, 2013 - A proposed change to the False Claims Act will require officials to take additional steps before suspected fraud can be investigated — worrying whistleblower lawyers that one of the most effective weapons on fraud might be weakened.

Since it was significantly modified in the mid 1980s, the False Claims Act has led to the recovery of more than $34 billion in improperly obtained government payments. The statute incentivizes those with knowledge of wrongdoing to speak out by awarding them a percentage of any recovery ultimately obtained. The FCA has been used to great success to battle back Medicaid and Medicare fraud, as well as improper behavior by companies involved in the pharmaceutical, defense, and financial sectors.

Introduced in the House of Representatives on August 1, the Fairness in Health Care Claims, Guidance and Investigations Act (HR 2931) would require government officials to “review their own rules and regulations” before they can initiate investigations into suspected Medicare and Medicaid fraud.

While proponents of the bill — co-sponsored by Representatives Howard Coble (R-NC) and David Scott (D-GA) — view it as a way to protect hospitals from costly, time-consuming investigations into innocent billing errors, whistleblower lawyers fear it could have a chilling effect on the FCA’s ability to target — and tackle — legitimate Medicare and Medicaid fraud.

“The False Claims Act has been remarkably effective in beating back fraud,” says Jeffrey F. Keller, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a veteran whistleblower lawyer. “The steady stream of state legislation and federal programs emulating it are evidence of its success — as is the billions in recoveries it has triggered. Congress should really think long and hard about the consequences of tinkering with something that has worked so well.”

The need for an effective False Claims Act has never been greater, says Keller, as budget cuts and fraud are combining to put many important federal programs — particularly in the health care sector — at risk. Beating back fraud, via tools like the FCA, can free up taxpayer funds to help assure the continuation of essential services.

“Hospitals contend that this legislation will avoid inquiries into simple mistakes, but the fact is, there is a lot of fraud in Medicaid and Medicare, and much of it is via improper billing practices,” says Keller, whose firm has offices in Los Angeles and San Francisco. “Hospitals argue that billing codes are complex and confusing and that’s why honest mistakes are made. But at the same time, there have been many cases where providers intentionally ‘upcode’ — billing for more lucrative procedures than those actually performed. That’s fraud, plain and simple, and it’s imperative that the False Claims Act remains able to root it out.”

Along with the additional procedural steps, the proposed legislation would also set a minimum dollar amount for fraud inquiries, so that smaller disputes would not be covered under the FCA.

“There’s an old saying, ‘if it’s not broke, don’t fix it,’” says Keller. “The False Claims Act is anything but broken. It works, and it works well. Let’s not tinker with success.”

 

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