Federal False Claims Act Builds in States’ Financial Incentives
28 states and the District of Columbia have enacted a False Claims Act. Each of those States’ False Claims Acts is modeled after the federal False Claims Act. States have a financial incentive to enact state false claims laws that are at least as effective as the FCA in rewarding and facilitating relator’s lawsuits for false claims to the state Medicaid program. By doing so, states qualify under the federal Deficit Reduction Act of 2005 for an additional 10 percent share of the amount recovered using the state law.
The following states each have their own False Claims Acts:
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Rhode Island
The federal False Claims Act has been amended by the Fraud Enforcement and Recovery Act of 2009, the Patient Protection and Affordable Care Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result, the Office of Inspector General, which reviews and certifies whether state false claims laws qualify for incentives under the federal Deficit Reduction Act of 2005, has determined that nearly all state false claims laws are no longer “at least as effective” as the federal False Claims Act. The Office of Inspector General gave these states a grace period until March 31, 2013 to amend their false claims laws to remain eligible for financial incentives.
Important State False Claims Act Amendments
Accordingly, several of the states have amended their respective false claims acts, and many are in the process of amending their false claims act so that their provisions are substantially similar to the newly amended federal False Claims Act. The States listed below, which have been recently amended, have not been recently amended or are in the process of being amended, have some unique provisions in their respective false claims acts that are important for whistleblowers and qui tam lawyers to take note of.
Reporting Fraud Under the Delaware False Claims Act
Under the Delaware False Claims Act, in effect until July 16, 2009, only an “affected person” could bring a False Claims Act action. An amendment to the Delaware False Claim Act eliminated this limitation allowing “any person or labor organization” to bring a suit under the Delaware False Claim Act. Del. Code Ann. Tit. 6, § 1202(b)(1) (2009). The Delaware False Claims Act was amended on July 16, 2009, repealing the “substantial evidence” determination.
Reporting Fraud Under the New Mexico False Claims Act
Similar to the Delaware False Claims Act, the New Mexico False Claims Act states that if the government declines to take over a qui tam action, the party bringing the action shall have the right to conduct the action if the New Mexico Department of Human Services determines that there is substantial evidence that the violation has occurred. N.M. Stat.§27-14-7(E)(2) (2004). Also similar to the Delaware False Claims Act, the New Mexico False Claim Act only permits an “affected person” to bring a suit. However, the New Mexico False Claim Act does not define “affected person.” New Mexico qui tam lawyers should take note of this specific provision prior to filing a qui tam case under the New Mexico False Claims Act.
Reporting Fraud Under the Texas False Claims Act
The Texas False Claim Act was amended and the amendment became effective on May 4, 2007. The new version of the statute states that if Texas declines to take over the action, “the person bringing the action may proceed without the state’s participation.” Tex. Human Res. Code Ann. § 36.104 (2010). Click here to learn more about reporting fraud under the Texas False Claims Act.
Reporting Fraud Under the New York False Claims Act
The New York False Claims Act was originally enacted on April 7, 2007 and was modeled after the federal False Claims Act. At the time of passage, the provisions were nearly identical to the then-1986 version of the federal False Claims Act. However, in 2009 and 2010, Congress amended the federal False Claims Act. New York followed suit amending the New York False Claims Act in August 2010. Although largely identical to the federal False Claims Act, the New York False Claims Act differs in some significant respects. Click here to learn more about reporting fraud under the New York False Claims Act.
Reporting Fraud Under the Amended Version of the California False Claims Act
On August 16, 2012, the California Assembly passed a bill (AB 2492) amending California’s False Claims Act, Cal. Gov’t Code §§ 12650-12656, which must be signed into law by Governor Jerry Brown. The amendments largely conform the California False Claims Act to the federal False Claims Act.
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