Affordable Care Act Fraud Provisions (2010)

The ACA narrowed the FCA’s public disclosure bar in several ways.

It made the bar non-jurisdictional, limited qualifying disclosures to federal proceedings and reports (overruling Graham County), and expanded the “original source” exception.

Under the new standard, a whistleblower can qualify as an original source with independent knowledge that “materially adds to” the publicly disclosed allegations, without needing direct knowledge.

This means whistleblowers can proceed with cases based on information that meaningfully supplements public disclosures, even if they lack firsthand knowledge, making it easier to overcome the public disclosure bar.

The ACA amended the AKS to state that “a claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of [the FCA].” This means a separate showing of intent to defraud is not required; the underlying kickback itself establishes falsity for FCA purposes.

– It eliminates reliance on the implied certification theory to bring an FCA claim based on an AKS violation
– Providers cannot argue ignorance of the law to avoid liability
– Courts are split on the causation standard for what “resulting from” means, with some requiring but-for causation

The ACA’s 60-day overpayment rule requires providers to report and return Medicare or Medicaid overpayments within 60 days of identification.

This obligation is codified at 42 U.S.C. § 1320a-7k(d). A knowing failure to comply creates False Claims Act liability through the “reverse false claim” provision.

By improperly retaining an overpayment beyond the 60-day deadline, a provider knowingly conceals or avoids an obligation to pay the government. This transforms the retained overpayment into a false claim, exposing the provider to treble damages, significant per-claim penalties, and potential whistleblower lawsuits.

The ACA changed the Anti-Kickback Statute’s intent standard by clarifying that the government does not need to prove a defendant had knowledge of the law or specific intent to violate it. Under the amended statute, the government only needs to show the defendant knowingly engaged in prohibited conduct. Congress made this change to clarify the standard in light of circuit splits over what “knowingly and willfully” required.

– The ACA effectively lowered the government’s burden by removing the requirement to prove knowledge of the specific law
– Congress intended to resolve legal uncertainty and strengthen enforcement by eliminating a significant procedural hurdle for prosecutors
– This change also made it easier to pursue False Claims Act cases predicated on AKS violations

Under the ACA, an overpayment is defined as any funds received or retained under Medicare or Medicaid to which a person, after applicable reconciliation, is not entitled.

The obligation to report and return the overpayment attaches when it is identified.

This generally occurs when a provider has, or through reasonable diligence should have, determined that an overpayment was received. The provider then has 60 days to report and return it, or by the date any corresponding cost report is due, whichever is later.

The ACA expanded the FCA’s anti-retaliation provision by building on the 2009 FERA amendments. It corrected a drafting error in FERA that had narrowed protected conduct, restoring protection for “lawful acts done in furtherance of an FCA action”. This is in addition to FERA’s expansion of protected conduct to include “other efforts to stop one or more violations” of the FCA.

– The scope of protected activity now includes internal reporting, investigating potential fraud, and taking steps to stop violations—even before a formal qui tam lawsuit is filed. The law also protects contractors and agents, not just employees
– This expansion means whistleblowers are safeguarded for a wider range of actions taken to expose fraud, strengthening the FCA as an enforcement tool

The ACA significantly expanded enforcement resources by providing an additional $350 million over ten years through the Health Care Fraud and Abuse Control Account to hire new investigators.

It also gave CMS (Centers for Medicare & Medicaid Services) and DOJ new tools to prevent fraud before payments are made, including enhanced provider screening with fingerprinting and site visits, temporary enrollment moratoria in high-fraud areas.

The law expanded data-sharing across federal agencies, improved access to real-time claims data, and authorized payment suspensions when credible fraud allegations exist.