On May 20, President Obama signed the Fraud Enforcement and Recovery Act of 2009 (FERA) into law. S. 386, 111th Cong. (2009). FERA, introduced by senators Patrick Leahy (D-Vt.), Ted Kaufman (D-Del.) and Chuck Grassley (R-Iowa), is primarily aimed at improving the government’s ability to investigate and prosecute financial frauds such as mortgage fraud, securities fraud, financial institution fraud and other frauds related to federal assistance and relief programs. Importantly, however, the bill includes several provisions that could significantly expand the range of conduct subject to liability under the False Claims Act and its whistleblower or qui tam litigation provisions, which have long been among the government’s primary tools to deter and penalize health care fraud. Although FERA was primarily intended to target financial frauds, the changes to the False Claims Act apply equally to the health care industry.

Efforts to amend the False Claims Act, which was last rewritten more than two decades ago, have been going on for several years. But due to the recession and recent pressure on Congress to protect taxpayers from fraud and abuse, FERA, introduced in the Senate in early February, was not likely to languish as have other bills. The president was also quick to push the bill through the finish line, signing it into law just one day after it was presented for his approval.

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