Attorney tells audience to brace for a storm of whistle-blower lawsuits

If the annual and well-attended legal update at the Healthcare Financial Management Association's Annual National Institute is any indication, healthcare providers are sailing into a stormy sea of new fraud and abuse provisions that threaten to sink the unprepared.

Healthcare attorney Joanne Judge, a partner with Stevens & Lee in Reading, Pa., spent the first 30 minutes of her 75-minute presentation reviewing all the new fraud and abuse provisions of the Patient Protection and Affordable Care Act to a packed room of more than 100 attendees during the last day of the HFMA conference in Las Vegas.

“You'll need to look around your organization and see who looks best in orange and pick that person,” quipped Judge, referring both to the common color of prison jumpsuits and to a provision of the new healthcare reform law that requires “someone in a leadership position” to certify, likely on an annual basis, that the organization has a compliance program in place. The law requires all Medicare providers and suppliers to have compliance programs, she said.

Judge predicted an explosion of new whistle-blower lawsuits because the new law relaxes the requirements for filing such lawsuits under the federal False Claims Act. For example, the new law effectively eliminates the requirement that a plaintiff have direct knowledge of the alleged fraud in order to file suit.

The new law also converts accidental Medicare overpayments to providers into potential false claims, Judge said. She said the law considers an overpayment as fraud if the overpayment isn't identified by the provider and returned to the government within 60 days. Judge said that will require providers to beef up their internal billing systems to detect an overpayment as soon as possible and then send Medicare back its money.