Publications: New Federal Law Requires Establishment of Written Policies to Educate Employees on False Claims

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The Deficit Reduction Act of 2005 (Public Law 109-171) amends portions of the Social Security Act (42 U.S.C. 1396a(a)) to require entities that receive or make $5 million or more in Medicaid payments to establish written policies to educate their employees (including management), contractors and agents about federal and state false claims laws. Education policies must include detailed information regarding the federal False Claims Act, administrative remedies found in the Program Fraud Civil Remedies Act, state false claims laws, whistleblower protections under federal and state laws, with respect to the role of such laws in preventing and detecting fraud, waste and abuse, and the entity’s current policies and procedures for preventing and detecting fraud, waste and abuse. Employee handbooks also must include specific discussion of the required information. These new provisions take effect January 1, 2007.

General counsel and compliance officers of health care entities that are subject to this portion of the Social Security Act need to be aware of this new law and begin to implement its provisions, including planning employee education as well as reviewing and modifying written policies and procedures and employee handbooks to include this required information.