Federal Deficit Reduction Act 2005: Employee Education on False Claims Recovery
Updated September 23, 2008
Effective January 1, 2007, all new provider applicants and
all providers subject to reenrollment processing will be
required to certify that they comply with Section 1902(a) of the
Social Security Act.
On February 8, 2005, President Bush signed into law the
Deficit Reduction Act (DRA), which requires specified changes to
Medicaid (Medi-Cal in California) law. One of those changes is
the requirement for employee education about false claims
recovery. These changes go into effect on January 1, 2007.
This article contains information about both the state and
federal law regarding this new requirement. This article
also serves as the official notice of new federal requirements
for Medi-Cal providers in California.
Section 6032 of the DRA requires any entities that receive or
make annual payments under the State Plan (Medi-Cal in
California) of at least $5 million dollars, as a condition of
receiving such payments, to have established written policies
and procedures about the Federal and State False Claims Act for
their employees, agents and contractors.
Specifically, Section 6032 amends the Social Security Act,
Title 42, United States Code, Section 1396a(a), by inserting an
additional relevant paragraph, (68). To summarize, this new
paragraph mandates that any entity that receives or makes annual
payments under the State Plan of at least $5 million dollars
annually, as a condition of receiving such payments, must comply
with the following requirements:
- Establish written policies for all employees of the entity, including management, and applicable contractor(s) or agent(s) of the entity, consistent with CMS FAQs 23-26 (March 30, 2007). These written policies shall provide detailed information about the following:
The written policies must include details about the
entity's policies and procedures for detecting and
preventing fraud, waste and abuse.
Any employee handbook for the entity must include
specific discussion of the laws about false claims and
statements, the rights of employees to be protected as
whistleblowers, and the entity's policies and procedures for
detecting and preventing fraud, waste and abuse.
- Federal False Claims Act, including
administrative remedies for false claims and
statements established under Title 31, USC, Chapter
- State laws pertaining to civil or criminal
penalties for false claims and statements;
whistleblower protections under such laws; and the
role of these laws in preventing and detecting
fraud, waste and abuse in Federal health care