Many smaller providers believe that they are too small for the government to investigate them. Small providers may think that the small amount that they bill Medicare and Medicaid would not catch the governments’ eyes. Which may or may not give them courage to misbill or upcode, according to the government. However: small providers beware. An important piece of legislation is included as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2025 and promises to expand the government’s ability to combat fraud, particularly fraud in smaller-dollar cases that have, in the past, been difficult to address. Audits of all sizes will be increased this year.
Spearheaded by whistleblower advocate Senator Chuck Grassley (R-IA), the Administrative False Claims Act (AFCA) focuses on a significant increase in the statutory maximum for fraud claims that can be handled administratively. Under the current framework, claims involving frauds of up to $150,000 can be processed through an administrative process, bypassing the complexities of litigation. However, the AFCA raises this threshold to $1 million, greatly expanding the scope of claims that can be reviewed and prosecuted without going through the traditional court system.
This legislative shift is seen as a key development in tackling the vast number of smaller frauds that often evade the spotlight in comparison to high-profile corporate scandals or massive government contract abuses. By making it easier to address frauds that might otherwise be dismissed as too small to prosecute, the AFCA addresses a significant gap in the enforcement of the False Claims Act, which has traditionally focused on larger, more visible frauds.
The legislation passed the House of Representatives on December 11, 2023, and had previously gained unanimous Senate approval as a standalone bill earlier that year in April. This broad bipartisan support underscores the widespread recognition of the need to modernize the government’s fraud detection and enforcement capabilities, particularly in a time when the government believes that smaller-scale frauds may be taking a cumulative toll on taxpayer dollars.
Sen. Grassley’s advocacy for this bill continues a long-standing commitment to improving fraud enforcement mechanisms in the United States. In 1986, he led the passage of amendments to the False Claims Act that included the enhancement of the qui tam provision. This provision allows private citizens, known as whistleblowers, to file lawsuits on behalf of the government against entities that defraud federal programs. Over the years, this provision has proven crucial in uncovering billions in fraudulent activities, with more than $70 billion recovered since its inception.
In introducing the AFCA, Grassley aims to build on the success of the False Claims Act while addressing an area of enforcement that has been historically underdeveloped. He is quoted as saying that “Fraud of any size should not be tolerated.” The 2025 law is intended to make the process for addressing these smaller claims more efficient and effective, offering a vital tool for the Justice Department to investigate and prosecute these cases.
One of the key features of the AFCA is its provision for increasing staff within the Department of Justice, specifically targeting the need for more resources to review, investigate, and prosecute fraud claims. Whistleblower advocates have expressed their support for these measures, highlighting that the legislation will empower the government to uncover modern fraud schemes that often fly under the radar. These legislative fixes will allow the government to better reach smaller-dollar fraud claims that currently siphon government dollars with impunity.
The passage of the AFCA represents a major victory for whistleblower protections and anti-fraud enforcement in the U.S. It is a critical element of the National Whistleblower Center’s “Seven Major Campaigns of 2024,” which aims to strengthen legal tools and protections for those who expose government fraud. The law is expected to enhance the ability to take swift action against a broad range of fraudulent schemes, ensuring that those who seek to defraud the government, no matter the size of their fraud, are held accountable.
As the AFCA moves toward final passage, it signals a renewed commitment to ensuring that government spending remains transparent and free from fraudulent exploitation. With more tools in place to combat fraud, this new law is poised to have a lasting impact on how fraud is detected, prosecuted, and prevented in the future.