While all eyes are on the health care reform debate, a new Senate bill would give the government improved tools for investigating and prosecuting fraud and abuse in both federal and private health insurance programs. One of the most significant proposed changes would authorize a qui tam whistleblower action under the False Claims Act based solely on allegations of a violation of the Anti-Kickback law.

Senator Ted Kaufman (D-DE) introduced the Health Care Fraud Enforcement Act of 2009, co-sponsored by Committee Chairman Patrick Leahy (D-VT) and Committee members Arlen Specter (D-PA), Herb Kohl (D-WI), Chuck Schumer (D-NY) and Amy Klobuchar (D-MN).

Kaufman’s proposed legislation would modify federal sentencing guidelines, health care fraud statutes, and forfeiture, money laundering, and obstruction statutes, including:

Sentencing increases: The bill directs the Sentencing Commission to increase the guidelines range for health care fraud offenses and clarifies that the full potential scope of the fraud should be considered at sentencing.

Redefining “health care fraud offense”: The bill includes all health care crimes within the definition of “health care fraud offense,” regardless of where they are codified. (ERISA, drug marketing, and kickback crimes are currently not included) This change will make available to law enforcement the full range of antifraud tools, including criminal forfeiture and obstruction penalties, to combat these offenses.


Improving whistleblower claims: kickbacks lead to unnecessary and risky medical care and pervert the doctor-patient relationship. This bill clarifies that all payments made pursuant to illegal kickbacks are false for purposes of the False Claims Act, regardless of who submitted the claim.
Creating a common-sense mental state requirement for health care fraud offenses: some courts have held that defendants must be aware that their conduct violates a specific provision of criminal law in order to be held accountable. This bill restores the original intent of Congress that a person is guilty of a health care offense if he knowingly does what the law forbids.

Increasing funding: Money spent on health care fraud prevention and enforcement is returned manifold through costs savings and civil and criminal recoveries. This bill authorizes a modest, yet significant, increase in federal antifraud spending of $20,000,000 per year through 2016.

If enacted, this bill would reduce a number of obstacles that have frustrated enforcement efforts and discouraged private qui tam cases. Since Congress is under pressure to find ways to pay for the increased coverage which may be mandated by the larger reform efforts, it is reasonable to anticipate that some form of increased enforcement efforts will garner bipartisan support. Plaintiff’s lawyers who represent whistleblowers are already beginning to publicize this bill on their web sites, so look for increased qui tam activity if it is passed.

For Sen. Kaufmann’s section-by-section summary, Click here.  For more information on the Health Care Fraud Enforcement Act of 2009, contact William  H. Maruca.