Medicare Compliance & Reimbursement

False Claims Act architect says Medicaid rebate rule will foil whistleblowers.

Drugmakers who thought the Centers for Medicare & Medicaid Services' Aug. 29 rule on Medicaid drug rebate recordkeeping brought some much-needed clarification to their documentation responsibilities may be in for more uncertainty.

In an Oct. 17 letter to Health and Human Services Secretary Tommy Thompson, Senate fraud hawk Charles Grassley (R-IA) maintains that the rule would be a bane to the campaign against fraud and abuse in federal health care programs. Grassley maintains that the rule - which in essence permits drug manufacturers to destroy documents relating to the Medicaid drug rebate program after three years - will give a green light to drugmakers to get rid of documents that could support whistleblower lawsuits.

"Typically, old billing records, including pricing data and supporting documentation regarding a drug manufacturer's Average Manufacturer Price and Best Price are necessary in cases brought under the False Claims Act," the Senate Finance Committee chief writes. "Should this regulation become effective, it will dramatically limit the ability of a whistleblower to review and rely upon old records to prove liability and/or damages because there will be no records available going back further than three years."

While Grassley concedes that establishing definite recordkeeping time periods makes sense, he says a three-year limit is "wrongheaded" - and urges Thompson to prevent it from taking effect.