MS Issues Q&A as Final Guidance on Requirements of Deficit Reduction Act


As most providers know by now, the federal Deficit Reduction Act (“Act”) requires covered providers to establish written policies aimed at educating employees about false claims and whistleblower protections. Section 6032 of the Act applies to all entities that receive or bill at least $5 million in Medicaid funds. Compliance with the employee education provisions of the Act is a prerequisite to receiving Medicaid funds. The Act went into effect on January 1, 2007.

The Act’s provisions with respect to employee education are deceptively brief. Section 6032 requires that qualifying entities:

(A) establish written policies for all employees of the entity (including management) and of any contractor or agent of the entity, that provide detailed information about the False Claims Act [31 USC §§3729-33], administrative remedies for false claims and statements [31 USC chapter 38], [state false claims acts], and whistleblower protections under such laws … ;

(B) include as part of such written policies, detailed provisions regarding the entity’s policies and procedures for detecting and preventing fraud, waste and abuse; and

(C) include in any employee handbook for the entity, a specific discussion of the laws described in subparagraph (A), the rights of employees to be protected as whistleblowers, and the entity’s policies and procedures for

detecting and preventing fraud, waste and abuse.

Although these provisions are short, there has been much confusion by government and providers alike as to what the provisions actually require, and how compliance should be


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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