Thursday, May 2, 2013

OIG State False Claims Act Update

In April, US Department of Health and Human Services, Office of Inspector General (OIG), released its state False Claims Act (FCA) update, done in consultation with the US Attorney General. OIG and the Attorney General determine whether states have FCAs that qualify for an incentive under the Social Security Act (SSA), Section 1909. States deemed to have qualifying laws receive a 10-percentage-point increase in their share of any amounts recovered under those laws. By way of background, to qualify for the financial incentive, a state’s FCA must:
  1. Establish liability to the state for false or fraudulent claims, with respect to Medicaid spending; 
  2. Contain provisions that are at least as effective in rewarding and facilitating qui tam (i.e., whistleblower) actions for false or fraudulent claims; 
  3. Contain a requirement for filing an action under seal for 60 days with review by the State Attorney General; and 
  4. Contain a civil penalty that is not less than the amount of the civil penalty authorized under the federal FCA. 
 
Since the effective date of Section 1909, the federal FCA has been amended by the Fraud Enforcement and Recovery Act (FERA), the Affordable Care Act (ACA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). These three acts, among other things, amended bases for liability in the federal FCA and expanded certain rights of whistleblowers. As a result of these amendments, OIG must now analyze Section 1909 compliance using the federal FCA as amended; and provide a 2-year grace period, ending on March 31, 2013, during which state acts that were previously approved by OIG will continue to be deemed compliant pending state act amendment and resubmission to OIG. Therefore, all State acts that have not yet been approved will be reviewed in reference to the federal FCA amendments. State acts that have been approved in the past will be considered compliant until March 31, 2013. After March 31, 2013, a previously approved State act will no longer qualify for the Section 1909 incentive unless it has been amended and resubmitted to OIG; and either approved by OIG; or under review by OIG.

States interested in requesting that OIG review its state FCA should submit a complete copy of the law and any other relevant information to:

Office of Inspector General
Office of Counsel to the Inspector General
U.S. Department of Health & Human Services
Cohen Building
Mail Stop 5527
330 Independence Avenue, SW
Washington, DC 20201

 To obtain a copy of OIG’s FCA Update go to http://oig.hhs.gov/fraud/state-false-claims-act-reviews/index.asp#letters.

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