False Claims Act
The False Claims Act is one of the important mechanisms that are used to prevent the perpetration of fraud and to recover billions of dollars being stashed by government contractors every year. Under the provisions of section 3729 to 3733, any person who knowingly submit or cause another person or entity to submit false medical claims to fraudulent draw funds from the government, such person shall be liable to reimburse three times of the damages to the government. In addition, there may be civil penalties to the tune of $ 5,500 to $ 11,000 per every false claim fraudulently preferred. The Act contains a qui tam or whistleblower provision which enables the citizens with evidence of fraud against government contract to sue and recover the stolen funds on behalf of the government (Taxpayers Against Fraud).
Medicaid Integrity Plan
Under the provisions of the Deficit Reduction Act, 2005 (DRA), a Medicaid Integrity Program (MIP) was introduced by the Department of Health and Human Services. The purpose of establishing this fund was to provide financial support to the Centers for Medicare and Medicaid services to enable them to fight against frauds, waste, and abuse in Medicaid. Congress has allocated funds to the extent of $ 5 million for FY 2006 with an addition of $ 50 million for FY 2007 and 2008.
The plan allocation for the ffund will be enhanced to $ 75 million each year from FY 2009 onwards. Under section 6034 of the DRA, it has been made mandatory to evolve comprehensive plans every five years by forming a collective group comprising of various government authorities. The group will be made responsible for controlling provider fraud and abuse under Medicaid (NCSL, 2009).
Federal Deficit Reduction Act
The objective of the Deficit Reduction Act (DRA) is to grant flexibility to states to make amends to their Medicaid programs. The provisions of this Act enable the states to restrict access to Medicare by making suitable modifications to their Medicaid programs. The provisions also grant autonomy to states to expand the eligibility to provide access to more groups of people. The salience of the Act can be seen from the provision requiring citizenship documentation from applicants and recipients including children. The law provides greater authority to states to practice cost-sharing for Medicaid-covered benefits and services.
The states could now use a “benchmark” option and restructure coverage. However, the requirements of Early and Periodic Screening, Diagnostic, and Treatment services are retained as the coverage standard for children under the age of 19 years (Rosenbaum & Markus, 2006).
Impact on Cost-Cutting Measures
The enactment and implementation of these legislations have a far-reaching impact on the cost-cutting measures of the government in respect of Medicaid and Medicare programs. Even though, these laws do not contribute to the reduction of costs directly, by combating against frauds and unauthorized usage of taxpayers money and reducing waste of government resources the DRA and False Claims Act have contributed much to the cost-cutting efforts of the government.
However, the extent to which the provisions of the False Claims Act are used by the whistleblowers is not encouraging. Despite passing such legislation and taking actions, in the form of forming high-level authority groups, the government is unable to control the cost of Medicaid effectively. This is evident from the fact that the custodians of the Medicaid funds have already given warning signals that the Funds are getting fast depleted and the government may have to face a situation of deficit in respect of these Funds sooner or later. This shows that the government could not monitor the utilization of Medicaid funds effectively.
References
NCSL. (2009). CMS Implements the DRA Medicaid Integrity Program. Web.
Rosenbaum, S., & Markus, A. R. (2006). The Deficit Reduction Act of 2005: An Overview of Key Medicaid Provisions and Their Implications for Early Childhood Development Services. Web.
TaxpayersAgainstFraud. (n.d.). What are False Claims & Why is it Important? Web.