Newly Enacted FERA Amendments To False Claims Act Signal New Risks For Health Industry Organizations & Others

May 26, 2009

Health care providers and other parties covered by the False Claims Act, 31 U.S.C. § 3729 (FCA), now face expanded whistleblower and other liability under amendments to the FCA enacted under the “Fraud Enforcement and Recovery Act of 2009”(FERA).  The amendments increase the likelihood both that whistleblowers will turn in health care providers and other individuals and organizations that file false claims in violation of the FCA and the liability that violators may incur for that misconduct.

Signed into law by President Obama last Wednesday (May 20, 2009), FERA immediately upon enactment:

  • Amends the whistleblower protections afforded to employees, contractors and agents who suffer retaliation for taking lawful efforts to stop violations of the FCA and to make it easier for those individuals to pursue retaliation claims;
  • Expands liability under for making false or fraudulent claims to the federal government under the FCA;
  • Applies liability under the FCA for presenting a false or fraudulent claim for payment or approval (currently limited to such a claim presented to an officer or employee of the federal government); and
  • Requires persons who violate such Act to reimburse the federal government for the costs of a civil action to recover penalties or damages 

Concurrent with President Obama’s signature of FERA into law, the U.S. Departments of Justice (DOJ) and Health & Human Services (HHS) jointly announced the expansion of federal health care fraud enforcement efforts.  On May 20, 2009, HHS and DOJ announced their activation of a new interagency team to combat health care fraud highlights the increasing need for health care providers and health plans to review and tighten their practices for dealing with Medicare and other federal programs to survive scrutiny under federal health care fraud initiatives.  Coupled with FERA and the already significant increase in federal health care fraud detection and enforcement activities in recent years and a proposed 50 percent increase in funding for these activities included in President Obama’s Fiscal Year 2010 budget, health care providers and payers must be prepared to defend their dealing with Medicare, Medicaid and other federal health care programs.

The expanded protections afforded under FERA to whistleblowers and others suffering retaliation for opposing or reporting illegal actions can be expected to serve as a key tool in these efforts. These new retaliation safeguards are designed further increase the likelihood that employees and other insiders will help government officials ferret out false claims and other fraud. Specifically with regard to retaliatory action claims Section 4(d) of FERA amends 31 U.S.C.§ 3730(h) to provide for the recovery of “all relief necessary to make that employee, contractor, or agent whole” where that individual is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts he does or takes on behalf of an individual in furtherance of other efforts to stop a violation of the FCA. 

FERA expressly provides that relief to victims of retaliation will include “reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.” 

The FERA amendments to the FCA, the new TEAMS enforcement effort announced simultaneously with its signature into law mean that health care industry organizations and others covered by the FCA must implement appropriate fraud prevention, detection, redress and other procedures to help defend against possible FCA or other health care fraud claims and investigations.

The attorneys at Curran Tomko Tarski, LLC have extensive experience representing and advising health industry and other clients against FCA and other federal health care and fraud laws. 

For More Information

We hope that this information is useful to you. If you need assistance with auditing or defending health care fraud concerns or other health care compliance, risk management, transactions or operations concerns, please contact Curran Tomko Tarski LLP Partners Cynthia Marcotte Stamer at (214) 270-2402, CStamer@CTTLegal.com; Michael T. Tarski at (214) 270-1420 or MTarski@CTTLegal.com; Edwin J. Tomko at (214) 270-1405 or ETomko@CTTLegal.com.

You can review other recent health care and internal controls resources and additional information about the health industry and white collar experience of the Curran Tomko Tarski LLP attorneys at http://www.CTTLegal.com. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at CTTLegal.com or e-mailing this information to CStamer@CTTLegal.com.


Stamer To Discuss “Making Gainsharing Work: Managing Physician Performance” At June 17, 2009 Dallas Bar Association Health Law Section Meeting

May 26, 2009

Health care organizations, health plans and regulars increasingly point to gainsharing and pay-for-performance strategies as key to securing needed key physician buy-in and performances to achieve desired health care quality and cost objectives.  Using physician gainsharing to promote desired performances within the bounds of the law without undesirable side effects involves more than staying within the STARK exceptions and anti-kickback safe harbors. 

Curran, Tomko Tarski, LLP attorney Cynthia Marcotte Stamer will discuss key strategies and processes for designing and administering legally defensible pay-for-performance and other gainsharing arrangements that promote desired outcomes in operation at the Dallas Bar Association Health Law Section meeting on June 17, 2009. 

Former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, attorney and author Cynthia Marcotte Stamer is nationally and internationally recognized for her legal work, publications and programs, and advocacy on health industry performance management and other health industry matters.  Ms. Stamer works extensively with health care organizations, managed care and health insurance organizations, governments and others to manage performance and legal risks.  Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer combines her more than 22 years of health industry regulatory and risk management experience with an in-depth knowledge of workforce management and regulation to help clients manage performance and legal and operational risks.  Her experience includes advising public and private health industry clients domestically and internationally on a wide range of matters.  A widely published author and popular speaker, Ms. Stamer’s insights on health industry matters also are quoted in HealthLeaders, Managed Care Executive, the Wall Street Journal and many other national popular, business and industry publications.

 Ms. Stamer is scheduled to begin her remarks at Noon on June 17, 2009 at the offices of the Dallas Bar Association located at 2101 Ross Avenue, Dallas, Texas 75201.  For additional information, call the Dallas Bar Association at 214-220-7400 or see http://www.dallasbar.org.


DOJ/HHS Step Up Health Care Fraud Enforcement By Announcing New Interagency Health Care Fraud Prevention and Enforcement Action Team

May 20, 2009

Lead DOJ Health Care Fraud Enforcer Speaks In Dallas Tomorrow

The joint announcement today (May 20, 2009) by the U.S. Departments of Justice (DOJ) and Health & Human Services (HHS) of a new interagency team to combat health care fraud highlights the increasing need for health care providers and health plans to review and tighten their practices for dealing with Medicare and other federal programs to survive scrutiny under federal health care fraud initiatives.   Houston and Detroit are targeted for the attention of a new Strike Force.

Participants attending tomorrow’s Dallas Health Industry Council Southwest Healthcare Transaction Conference will get to hear the latest about these and other federal health care fraud prevention and enforcement activities from one of its key players. The Justice Department’s lead federal health care fraud prosecutor, John “Jay” S. Darden, the U.S. Department of Justice Assistant Chief for Healthcare Fraud is scheduled to provide an update on these and other federal regulatory and enforcement activities affecting health care transactions when he speaks at the Conference tomorrow afternoon at the Omni Mandalay Hotel Dallas at Las Colinas at 1:30 p.m.

Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced the creation of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to combat Medicare fraud and the expansion of Strike Force team operations to Detroit and Houston.  Medicare Fraud Strike Forces, currently in operation in South Florida and Los Angeles, fight Medicare fraud on a targeted local level.  Statements made by Secretary Sebelius and Attorney General Holder in connection with the announcement of HEAT and the Strike Force Expansion make clear that the Obama Administration views health care fraud enforcement and prevention as a key element of its efforts to control health care costs.

The HEAT team will include senior officials from DOJ and HHS who will build upon and strengthen existing programs to combat fraud while also investing new resources and technology to prevent fraud, waste and abuse before it happens.  Efforts will include the expansion of joint DOJ-HHS Medicare Fraud Strike Force teams that have been successfully fighting fraud in South Florida and Los Angeles. 

Established in 2007, these Strike Force teams have a proven record of success using a “data-driven” approach to identify unexplainable billing patterns and investigating these providers for possible fraudulent activity.  The Medicare Fraud Strike Force team operating in South Florida has already convicted 146 defendants and secured $186 million in criminal fines and civil recoveries.  After the success of operations in South Florida, the Medicare Fraud Strike Force expanded in May 2008 to phase two in Los Angeles, where 37 defendants have been charged with criminal health care fraud offenses.  To date in the Los Angeles cases, more than $55 million has been ordered in restitution to the Medicare program. 

In addition to health care fraud enforcement and prosecution, HHS and DOJ also view prevention as critical to reforming the system.  Therefore, in addition to investigating and prosecuting fraud, the HEAT team will also focus critical resources on preventing fraud from occurring in the first place.  These efforts are expected to include:

  • Drawing from demonstration projects by the HHS Inspector General and the Centers for Medicare & Medicaid Services (CMS) that have focused on suppliers of durable medical equipment (DME) including increasing site visits to potential suppliers to prevent imposters from posing as legitimate DME providers. 
  • Increasing training for providers on Medicare compliance, offering providers the resources and the knowledge they need to help identify and prevent fraud.
  • Improving data sharing between CMS and law enforcement to help identify patterns that lead to fraud.
  • Strengthening program integrity activities to monitor and ensure Medicare Parts C (Medicare Advantage plans) and D (prescription drug programs) compliance and enforcement.

The Attorney General and the HHS Secretary also called on the American people to visit a new Web site http://www.hhs.gov/stopmedicarefraud or call 1-800-HHS-TIPS (1-800-447-8477) to report suspected Medicare fraud.

The HEAT Team and Strike Force activities are part of a broader emphasis in the enforcement of federal health care fraud laws.  President Obama’s proposed Fiscal Year 2010 budget seeks to further increase funding for fraud prevention and enforcement by investing $311 million — a 50 percent increase from 2009 funding — to strengthen program integrity activities within the Medicare and Medicaid programs.  The Obama Administration anticipates that all combined, the anti-fraud efforts in the President’s budget could save $2.7 billion over five years by improving oversight and stopping fraud in the Medicare and Medicaid programs, including the Medicare Advantage and Medicare prescription drug programs.

For More Information

We hope that this information is useful to you. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 270-2402 or via e-mail to cstamer@CTTLegal.com.

You can review other recent updates and other publications by Ms. Stamer and other helpful health care resources and additional information about Ms. Stamer and her experience, see Stamer Health Industry Experience. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here or by registering to participate in the Solutions Law Press Health Care Update blog at Health Care Update Blog. For important information concerning this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.


OCR Disability Charges Settlement Requires Equal Access to Transportation Services at Anchorage Pioneer Home

May 15, 2009

A State of Alaska owned licensed assisted living facility for seniors, the Anchorage Pioneer Home (APH), has modified its transportation policies and practices to better accommodate qualified individuals with disabilities as part of its recently announced settlement agreement with the U.S. Department of Health and Human Services (HHS) and the Alaska Department of Health and Social Services (DHSS).   The settlement agreement resolves an administrative complaint filed with the HHS Office of Civil Rights (OCR) that charged DHSS and APH  with violating Section 504 of the Rehabilitation Act of 1973 (Section 504) and Title II of the Americans with Disabilities Act of 1990 (ADA). DHSS owns and operates APH, a licensed assisted living facility for seniors, 65 years of age or older. Serving more than 160 Alaska residents, APH provides care at three different levels: Level I (independent); Level II (basic assistance); and Level III (24-hour care for Alzheimer’s disease and related disorders).  The Obama administration’s promise to emphasize disability and other federal discrimination law enforcement means public and private plans and providers should audit and strengthen practices to withstand scrutiny.

Section 504 requires state and local governments to ensure that qualified individuals with disabilities have equal access to programs, services, or activities receiving federal financial assistance. Title II of the ADA extends the prohibition against disability discrimination to state and local governments who do not receive federal financial assistance.  After conducting an investigation prompted by an administrative complaint filed with OCR, OCR issued a Jan. 16, 2009, letter detailing its findings that among other things, DHSS had violated Section 504 and Title II of the ADA, by declining to consider a legitimate request for a reasonable modification to its policies to enable an APH resident with Alzheimer’s disease to use APH’s transportation services for medical appointments.

Under the settlement, APH will consider individual requests for reasonable modifications to its transportation policies and practices to ensure that APH residents with disabilities are afforded an equal opportunity to access transportation services. If, after an individualized assessment, an APH resident, who is a qualified individual with a disability, is determined to need an escort to access and benefit from APH transportation services, APH will provide an escort at no cost.

 Under the settlement agreement:

  • DHSS reaffirmed its legal responsibility to ensure that no qualified individual with a disability is discriminated against in any DHSS service, program, or activity.
  • DHSS reaffirmed its legal responsibility to not retaliate against any person for opposing discrimination under Section 504 or Title II of the ADA, or participating in an investigation under those laws.
  • APH agreed to appoint a senior staff person to coordinate its compliance efforts under Section 504 and Title II of the ADA; provide additional staff training on preventing disability discrimination; publish a notice informing its residents and their guardians of their rights and responsibilities under these laws; and publish grievance procedures for handling disability discrimination complaints.
  • APH agreed to implement a revised transportation policy to ensure that its residents with disabilities, who are eligible to receive transportation services, are afforded an equal opportunity to participate in APH’s transportation program.

A copy of the OCR letter of finding and the settlement agreement, along with more information about OCR’s civil rights enforcement activities, can be found at http://www.hhs.gov/ocr/civilrights/activities/agreements/akpioneeragreement.pdf

For More Information

We hope that this information is useful to you. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 270-2402 or via e-mail to cstamer@CTTLegal.com.

You can review other recent updates and other publications by Ms. Stamer and other helpful health care resources and additional information about Ms. Stamer and her experience, see Stamer Health Industry Experience. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here or by registering to participate in the Solutions Law Press Health Care Update blog at Health Care Update Blog. For important information concerning this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.


HHS Announces Availability of $50 Million In Grants To Strengthen Nonprofit and Faith Based Organizations Aiding Families & Communities Struggling With Economic Downturn

May 11, 2009

 The Department of Health and Human Services (HHS) today (May 11, 2009) announced the availability of grants worth $50 million to strengthen nonprofit and faith-based organizations that aid families and communities who are struggling in the economic downturn.

The funds provided under the Strengthening Communities Fund (SCF) were authorized through the American Recovery and Reinvestment Act (ARRA).  The SCF funding will be distributed through two programs.

  •  The Nonprofit Capacity Building program will make one-time, two-year awards of up to $1 million to lead organizations that will use the funds to support other faith-based or secular nonprofit organizations.
  •  The State, Local and Tribal Government Capacity Building program will make one-time, two-year awards of up to $250,000 to state, city, county and Indian/Native American tribal governments. Governments will use these grants to strengthen nonprofit organizations and increase the nonprofits’ involvement in projects that help turn our economy around.

 Grantees for both programs must provide at least 20 percent of the total approved cost of the project from non-federal funds. This match may be met by cash or in-kind contributions.

 HHS’ Administration for Children and Families’ Office of Community Services will administer the SCF programs. Applicants interested in applying for funds should visit http://www.acf.hhs.gov/grants/recovery.html.


Sebelius Announces Key Personnel At New HHS Office of Health Reform

May 11, 2009

As the Obama Administration continues emphasis on health care reform, newly appointed Secretary of Health and Human Services (HHS) Kathleen Sebelius today (May 11, 2009) announced the establishment of the Department of Health and Human Services’ (HHS) Office of Health Reform. to spearhead HHS efforts to pass urgently needed health reform this year and coordinate closely with the White House Office of Health Reform.  Both offices were created by an April 8 Executive Order to help deliver on one of President Obama’s top priorities.

The following key staff members have been appointed to the HHS Office of Health Reform:

 Jeanne Lambrew, Ph.D., Director of the HHS Office of Health Reform: Jeanne Lambrew will lead the health reform effort in the Office, helping the Secretary to marshal the experience and assets of the department.  Dr. Lambrew was previously an associate professor at the LBJ School of Public Affairs, senior fellow at the Center for American Progress, and worked on health policy in the Clinton Administration.

Michael Hash, Senior Advisor: Michael Hash will serve as a senior advisor, running the inter-agency process for developing specific aspects of health reform legislation consistent with the President’s priorities. He will be an assignee at the White House Office of Health Reform and assist in the preparation of Administration positions and in communication with the Congress.  Prior to his appointment, Hash held senior positions at the Health Care Financing Administration (now CMS) and on the staffs of the House Energy and Commerce Committee as well as a private health policy consulting firm.

 Neera Tanden, Senior Advisor: Neera Tanden will work on developing health care policies for HHS and the Administration.  She is the former domestic policy director for the Obama-Biden campaign and policy director for the Hillary Clinton campaign, and oversaw health care work on both campaigns.  She has worked in think tanks, in the Senate and in the Clinton Administration.

Linda Douglass, Director of Communications: Linda Douglass will serve as the director of communications in the Office of Health Reform, working as an assignee at the White House Office of Reform, coordinating communications.  Before joining the administration, Douglass was a traveling spokesperson for President Obama’s 2008 campaign and was chief spokesperson for the Presidential Inaugural Committee 2009.  She spent most of her career as a journalist, most recently as a managing editor for National Journal and prior to that as Chief Capitol Hill Correspondent for ABC News

 Meena Seshamani, M.D., Ph.D., Director of Policy Analysis:  Meena Seshamani will coordinate the quantitative and qualitative analyses on health reform conducted throughout HHS. Before joining the Administration, Dr. Seshamani was a resident physician in Otolaryngology-Head and Neck Surgery at Johns Hopkins University. She is a health economist who has published widely on issues of health expenditures, health care financing, and their impact on health outcomes.  She advised Senator Kennedy on a range of issues including public health and prevention, community health centers, health professions training and health disparities. Lewis will begin work in the Office of Health Reform on May 25.

Jennifer Cannistra, Policy Analyst and Director of Special Projects:  Jennifer Cannistra will work as an assignee at the White House and will lead special projects undertaken by the HHS Office of Health Reform that require close coordination with the White House.  Previously, Cannistra served as the Pennsylvania State Policy Director for the Obama campaign.  Prior to joining Obama for America in September 2007, Cannistra served as a law clerk to the Honorable Faith S. Hochberg, D.N.J. and as an attorney in Washington, D.C.

Karen Richardson, Outreach Coordinator:  Karen Richardson will be responsible for conducting outreach to stakeholders on behalf of HHS, as an assignee at the White House Office, as it relates to advancing the President’s agenda for health reform.  She was previously the policy director at the Democratic National Committee (DNC).  She was policy director for Obama for America in Iowa and several states throughout the Presidential primary.   Richardson began working for President Obama at his Senate office in August 2005, beginning as an intern and then serving as deputy to the policy director.

Michael Halle, Special Assistant: Michael Halle will be responsible for coordinating office projects and activities as well as providing research assistance.  Halle worked for the Presidential Inaugural Committee and Obama for America, contributing to field operations in Iowa and North Carolina.  Prior to joining the Obama campaign he was an intern at the Center for American Progress with the health policy team.

 You can find more information about the evolving health care reform discussion and other health care policy and health care matters at CynthiaStamer.com.  If you need assistance monitoring health and managed care policy or other health care or health benefit matters, contact Cynthia Marcotte Stamer at (214) 270.2402, or cstamer@cttlegal.com.  To receive future Solutions Law Press Health Care Updates, register to participate in this Solution Law Press Health Care Update blog, register at CynthiaStamer.com or join the SLP Health Care Risk Management & Operations Group on linkedin.com.


HHS Report Highlights Rural Health Insurance Crisis

May 5, 2009

Health and Human Services Secretary Kathleen Sebelius on May 4, 2009 released a new report outlining the health care challenges facing rural communities, Hard Times in the Heartland: Health Care in Rural America.  The report available at http://healthreform.gov/reports/hardtimes/ indicates that nearly 50 million people in rural America face challenges accessing health care.  Not only do these Americans face higher rates of poverty, they report more health problems, are more likely to be uninsured, and have less access to a primary health care providers than do Americans living in urban areas.  The report notes:

  • Nearly one in five of the uninsured — 8.5 million people — live in rural areas.
  • Rural residents pay on average for 40 percent of their health care costs out of their own pocket, compared with the urban share of one-third.
  • In a multi-state survey, one in five insured farmers had medical debt.

For More Information

We hope that this information is useful to you. If you need assistance responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 270-2402 or via e-mail to cstamer@CTTLegal.com.

You can review other recent updates and other publications by Ms. Stamer and other helpful health care resources and additional information about Ms. Stamer and her experience, see Stamer Health Industry Experience. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at here or by registering to participate in the Solutions Law Press Health Care Update blog at Health Care Update Blog. For important information concerning this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.


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