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House Passes Medicare Anti-Fraud Bill

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A new bill takes aim at corporations found guilty of Medicare or Medicaid fraud -- and the executives who were in charge at the time. On September 22, 2010, the U.S. House of Representatives passed the “Strengthening Medicare Anti-Fraud Measures Act, which expands the authority of the HHS Office of Inspector General (OIG) to allow it to bar executives and corporations from future participation in the Medicare program.  

The bill, introduced by Rep. Pete Stark, D-Calif., and Rep. Wally Herger, R-Calif., is designed to close two perceived loopholes in current Medicare anti-fraud legislation. Although current law allows for executives to be banned from doing business with Medicare, the executive cannot be banned from federal health programs if he or she has left the company by the time of the conviction. This bill would allow, but not require, federal officials to ban such executives.

In addition, the bill gives the inspector general the authority to ban parent companies that may be committing fraud through shell companies. According to a statement by Congressmen Stark and Herger, companies that take part in fraud often set up shell companies or subsidiaries in order to protect the parent company from liability. The new law would give officials the right to ban the subsidiary as well as the parent company from Medicare.

In order for either of these two provisions to apply, however, a guilty plea by or verdict against the company is required.  

The bill is now being considered by the Senate.

This alert was prepared by Nutter’s Government Investigations and White Collar Defense practice group. For more information please contact your Nutter attorney at 617-439-2000.

This article is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

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