Healthcare Reform Bill Addresses Kickbacks, Public Disclosure

Although they may not have received much news coverage, two of the healthcare reform bill’s provisions made significant improvements to False Claims Act (FCA) enforcement.

Courts have long recognized that claims tainted by kickbacks can trigger FCA liability.  Many defendants, however, have continued to argue that violations of the Anti-Kickback Statute (AKS) cannot form the basis for FCA actions.  Fortunately, the Patient Protection and Affordable Care Act (PPACA), passed in March 2010, should put an end to such arguments once and for all.  PPACA includes provisions explicitly identifying claims resulting from kickbacks as false or fraudulent claims for FCA purposes.  This reaffirmation of what many courts have already established should help to streamline FCA kickback cases by eliminating defendants’ ability to continue raising the same meritless arguments.

Additionally, the reform bill modified the FCA’s public disclosure bar.  While the old version mandated dismissal if a whistleblower’s claims were based on publicly-disclosed information, the amended version now provides the government with the option to oppose dismissal.  The amendments also limit public disclosure to news media or federal proceedings, overturning some court decisions which also included state and local government proceedings.  Finally, the amendments protect whistleblowers who disclose information to the government before a public disclosure but before officially filing a complaint.