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HEALTH REFORM: New Regulations Implement Health Reform’s Enforcement Tools: Providers and Suppliers in Focus

On February 2, 2011, the Centers for Medicare and Medicaid Services ("CMS") published new rules ("Final Rule")[1] authorized by the Affordable Care Act ("ACA")[2] creating a vigorous screening process for new and existing Medicare, Medicaid and the Children's Health Insurance Program ("CHIP") providers and suppliers; giving CMS authority to temporarily stop enrollment of new providers and suppliers; expanding the ability of CMS and States to temporarily suspend payments to providers and suppliers; establishing requirements for States to terminate providers from the Medicaid and CHIP programs; and adding several other enrollment-related provisions. Generally, the new rules are effective March 25, 2011.

Publication of the Final Rule follows the recent announcement that the federal government recovered more than $4 billion in FY 2010 from health care fraud prosecutions and settlements — the largest annual amount ever recovered in health care fraud cases. Significantly, the 2010 recoveries from civil health care matters brought under the False Claims Act were more than $2.5 billion, reportedly the largest in the history of the Department of Justice ("DOJ"). These results, and the Final Rule, are further evidence of the increased focus the government will place on enforcement efforts in 2011 and beyond.

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[1] 76 Fed. Reg. 5,862-5,971 (Feb. 2, 2011).

[2] References in this Alert to the Affordable Care Act ("ACA") are to The Patient Protection and Affordable Care Act (Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152).