If your hospital receives more than $5 million in Medicaid payments per year, you are coming down to a significant compliance deadline on January 1, 2007, under Deficit Reduction Act (DRA) employee education about false claims.

Although details of compliance expectations have not been issued, the DRA makes compliance a condition of participating in the Medicaid program. Failure to comply can result in loss of funding under Medicaid and other state administered federally funded programs.

The Employee Educations About False Claims Recover provisions of the DRA require states to enforce the hospital or covered provider obligations under the DRA, which include:

Written policies for education of all employees (including management) of the entity and any contractor or agent, and detailed information on:

1. The federal False Claims Act

2. Administrative enforcement remedies against the entity for false claims and statements under 31 USC Ch. 38;

3. State laws on civil or criminal liabilities for false claims and statements;

4. State and federal whistle-blower protection for reporting violations;

5. How these laws prevent and detect fraud, waste, and abuse in healthcare;

Details in the policies must also address the entity’s policies and procedures for detecting and preventing fraud, waste, and abuse.

The entity is also required to prepare and distribute an employee handbook that discusses the covered state and federal laws, the rights of employees as whistleblowers, and the entity’s policies and procedures for prevention and detection of fraud, waste, and abuse.

Key in the DRA plan is the Section 6035 procedure that establishes compliance contracts that parallel Medicare corporate integrity enforcement. They mandate review for fraud, waste or abuse; audits of claims for payments including cost reports, consulting contracts, and risk contracts; identification of over payments; and education of providers , managed care plans, and beneficiaries.

CMS is also required to develop a 5-year plan in consultation with the US Attorney General, FBI, Comptroller General, OIG, and state agencies. Funding for 100 new employees for enforcement is included, along with $25 million per year of extra funds for OIG enforcement efforts.