In a recently published proposed rule, CMS and HHS propose to substantially increase financial rewards available to individuals who report information regarding individuals or entities engaging in acts or conduct that are subject to Medicare sanctions.  The existing reward incentive program offers 10% of the amount of overpayment recovered or $1000 whichever is less.  Under the proposed rule, the reward could take a substantial jump up to 15% of $66,000,000, equaling $9,900,000.


CMS explains that under the existing reward incentive program which has been in effect since July 1998, only 18 rewards have been paid in a total amount of less than $16,000 and less than $3.5 million in overpayments have been collected.  It notes that after the IRS increased the rewards available under its rewards program in 2006, it has collected almost $1.6 billion and paid approximately $193 million in rewards.  CMS also tips its hat to the success of the whistle blower provisions of the False Claims Act, noting that rewards under this Act range from 15% to 30% of amounts recovered.


CMS estimates that with the proposed rule in place annual recoveries will increase by $24.5 million.  There will, however, be no whistle blower double dipping.  While conduct may entitle a whistle blower to recover under both the False Claims Act and the Reward Incentive Program, whistle blowers are going to have to pick only one whistle.  Regardless of which whistle is chosen, the bottom line is that with this new rule more individuals are going to be looking much harder at the conduct of providers and entities that seek payment for services and supplies from Medicare.


As part of its on-going quarterly lunch time webinar series, the Ogden Murphy Wallace Healthcare Practice Group will provide a presentation on self-disclosure options and avoidance of state and federal false claims act liability in its June 4, 2013 webinar.  If you have questions regarding these updated protocols or self-disclosure and overpayments in general please contact Greg Montgomery.