We are bringing this information to your attention in order to alert you to possible civil fraud action available to the Office of Inspector General for failure to comply with the requirements of Section 301 of the Medicare Hospital Manual. That section requires hospitals to determine, upon each admission and each outpatient encounter, whether there is a payer primary to Medicare. In addition, Section 301, as revised in January, 1999, now requires that the specific secondary payer questionnaire contained in the Manual must be used in soliciting the required information.

If a provider does not comply with the process set forth in Section 301, it could be accused of submitting false claims for which action could be taken pursuant to the civil False Claims Act (31 USC 3729 et seq). This Act subjects a provider to a penalty of from $5,000-$10,000 for each false claim filed plus treble damages. If a provider consistently bills Medicare when it could have determined by use of the secondary payer questionnaire that there was a payer primary to Medicare, the OIG could argue that the provider acted in "deliberate ignorance" or "reckless disregard"of the truth or falsity of the information. These terms constitute the standards for liability under the False Claims Act (see 31 USC 3729 (b) (2) and (3)).

If you have any questions regarding this Bulletin, please contact either Clarke Bowie, Medicare Fraud Coordinator, Medicare Part A Fraud and Abuse Unit, at 410-561-4102 or Donna Blaschak, Auditor, Medicare Part A Fraud and Abuse Unit, at 410-561-4111.