Future of False Claims Act bill now in question

As a "show of good faith" toward the Justice Department' s new guidelines, Rep. William Delahunt (D-MA), one of the two key congressional co-sponsors of the Health Claims Guidance Act (HR 3523), will back off the "aggressive" legislative track he's pursued with the bill, says Steve Schwadron, Delahunt's chief of staff.

In a June 11 letter to Eric H. Holder Jr., deputy attorney general at the Department of Justice, Delahunt wrote, "I believe that the guidelines provide a basis for resolution of this controversy that makes it unnecessary and inadvisable to proceed further with H.R. 3523 or other legislation at this time." Instead, Delahunt wrote, he plans to recommend and endorse including the DOJ guidelines in the "Commerce-State-Justice Department Appropriation" bill.

A day later, however, Schwadron told Compliance Hotline that Delahunt is not withdrawing his support for the bill. "What we're doing is calling for a bit of a breather. It doesn't change the status of the legislation, but it does mean that we will take a break from the aggressive pursuit of more co-sponsors, from the bullet-train speed at which we were going, because at face value, what the Department of Justice has done goes a long way to addressing what concerned us."

Nevertheless, Schwadron says, if the DOJ doesn't follow through with effective implementation of its guidelines, Delahunt reserves the right "to resume work with our co-sponsors on this legislative track."

Rep. Bill McCollum (R-FL), the legislation’s primary author, calls the Justice Department guidelines "a good first move." However, his office says he still plans to continue pushing the proposal forward. "It's a positive step," says one McCollum aide, "but it doesn't go far enough."

H.R. 3523 amends the False Claims Act, making it harder to file criminal fraud charges against health care providers by increasing the burden of proof on prosecutors, limiting penalties for over-paid claims and creating safe harbors for hospitals that submit inappropriate claims based on advice from financial advisors and carriers. (See "Bipartisan bill would gut False Claims Act," March 23 Compliance Hotline, page 1.)

Introduced in March, the HCGA has already attracted more than 190 co-sponsors in the House. The Senate version of the bill (S. 2007), sponsored by Sens. Thad Cochran (R-MS) and Ernest F. Hollings (D-SC) remains on track, according to an aide to Sen. Hollings.