ATLANTA--A federal whistleblower protection mandate that went into effect Jan.1 has frustrated many Medicaid providers, who say they need more guidance from CMS.

Some 2,000 Medicaid providers clogged the agency's phone lines earlier this month with complaints about a provision in the Deficit Reduction Act that requires providers doing more than $5 million in annual Medicaid business to establish written policies educating their employees about the federal False Claims Act and its whistleblower protections. The policies must include specific procedures the provider has put in place to detect and prevent fraud and abuse, and also must inform employees that a whistleblower has protection against his employer.

According to Claudia Simonson, senior policy analyst, division of field operations, for the Medicaid Program Integrity Group, the phone lines maxed out at 2,046 during a Jan. 11 briefing about the provision given by Robb Miller, the group's acting director. While Simonson did not know how many HME providers called in, she said some callers had to be turned away because the phone system couldn't accommodate them.

"The provision says the policies must address both federal and state false claims acts," said Jeffrey Baird, a health care attorney with Amarillo, Texas-based Brown & Fortunato.

And therein lies the rub. Providers charge that most states have not yet finalized their mandated amendments to state whistleblower plans. Those amendments are not due until March 31. How, then, providers asked, are they to establish policies that adhere to both state and federal regulations?

Miller sidestepped that question, saying more guidance would be issued, but he gave no timetable.

Until then, Simonson said, "we're advising [providers] to seek their own counsel."

Both Baird, who noted that the provision is "buried deep inside the DRA," and attorney Neil Caesar of the Health Law Center in Greenville, S.C., are concerned that many HME providers might not know of the new provision.

"My guess is that most of the providers out there are unaware of this," said Caesar, continuing that HME companies should be aware "there's going to be another entity looking over their shoulder and holding them to standards of accountability." A provider could be compliant on the national level and noncompliant on the state level, he pointed out.

He said states have some incentive for paying attention to statutes covering fraud and abuse and any violations of those statutes. "Pursuing this usually brings in fines and penalties that can improve the states' bottom line," said Caesar, adding that it is not uncommon for states to reap 13 to 17 times the amount it costs them to pursue such issues.

Robbie Roberts, compliance officer at Boise, Idaho-based HME provider Norco, said his company already has written policies in place addressing the issue and has updated its company handbook to reflect the changes. In addition, the company has an online training course focusing on its procedures that "allows us to update folks and meet the intent of the legislation," Roberts said.

John Cassar, CEO of SuperCare in the City of Industry, Calif., said he has familiarized himself with the provision, but is relieved that it focuses on providers doing more than $5 million in Medicaid, not Medicare.

While at present his company is not impacted, "we're getting close [to the $5 million mark]," he said. "Regardless, it means you have to have a compliance program in your system, no matter what."

In the end, Baird said, he expects that the new provision will help in curtailing health care fraud. "Under the whistleblower provisions, the DOJ has, in essence, outsourced fraud investigations to the private sector ... As more people learn of the existence of the whistleblower provisions, then more people will file, or at least think about filing, qui tam actions."

Last year, funds recovered through cases originated by whistleblowers under the qui tam statutes added up to $1.3 billion, according to the DOJ. The agency recovered a total of $3.1 billion in fraudulent claims, a record, and of that, about 70 percent was related to health care fraud.

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