Liability under the Civil False Claims Act has been expanded. On May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act (FERA) into law. FERA contains amendments to the civil False Claims Act (FCA) that expand liability under FCA and gives the government increased powers to investigate. According to FERA, an entity violates FCA if it knowingly avoids or does not fully pay money to the United States. This includes the duty that arises from retaining any overpayments.
Regarding overpayments, an entity must return the overpayments and an improper failure to do so would be the basis for an FCA action. This requires those entities to have systems in place tracking over payments and when there is a requirement to return the overpayments. This issue will be sensitive with respect to the Stark Law and prohibitions on self-referral. Under FERA, the Attorney General has been extended the investigative authority in FCA violations.
The most important implication of FERA is that it overturns the 2008 Supreme Court decision in Allison Engine Co. v. United States ex rel. Sanders, 128 S.Ct. 2123 (2008), eliminating the requirement that a claim be presented to a federal government representative. Now, the liability can extend to include any false or fraudulent claim for government money irrespective of a claim being presented to a government official, the government has the money, or the defendant's intent (or lack thereof) to defraud the government. A recipient could be liable under FCA if the funds received were used on behalf of the government or to advance a government interest, including Medicare, Medicaid Advantage, and Medicaid HMOs.