Last week, we looked at the recoveries made on behalf of the federal government using the False Claims Act (“FCA”) in 2015. While informative, those numbers don’t tell the whole story. Many states have their own versions of the FCA. These statutes are particularly important in the Medicaid fraud arena since Medicaid is a state and federal partnership so fraud typically involves both federal and state funds. Today, our government fraud law firm looks at one such statute, Washington’s Medicaid Fraud False Claims Act (“WFCA”). Each state’s laws are unique, but this review can help readers understand the importance of state claims in this arena.
Washington’s Legislative Auditor Reviews the State False Claims Act, Recommends Reauthorization
In 2015, with the WFCA set to expire on June 30, 2016, the state’s Legislative Auditor undertook to study the statute, its results, and recommend or counsel against reauthorization. As the resulting report (Proposed Final Report issued 12/16/15) explains, government can investigate possible Medicaid fraud via federal (civil and/or criminal) investigations, state criminal investigations, and state civil investigations. Absent reauthorization, Washington would lose the authority for the final category. Additionally, if the federal government is investigating a case that also involved fraud on Washington state, the state can only participate in the case and any recovery if it has a state FCA that (like the WFCA) meets certain standards set forth in the federal law.
- The Act’s Results
Perhaps the most important and most fundamental findings in the report look at the WFCA’s results. Since enactment in 2012, the WFCA allowed Washington to pursue 29 civil cases of possible Medicaid fraud that could not have been pursued otherwise. Comparing the three and a half years since enactment with the same period prior to enactment, total fraud recoveries grew from $69.2 million to $75.6 million. Washington’s share of the recoveries since 2012 was $2.8 million, money that would not have been recovered absent the WFCA, with the remainder going to the federal government, other states involved in multi-state cases, and rewards to private whistleblowers. Washington spent $963,000 on Medicaid fraud investigations since 2012, meaning the state recovered $2.96 for every dollar spent. WFCA recoveries help pay for Medicaid services and provides funding for future Medicaid fraud investigations and enforcement actions.
- Qui Tam Provision
Like its federal counterpart, the WFCA includes a qui tam provision allowing private individuals (called “relators”) to pursue claims on the government’s behalf. Relators are typically employees with knowledge of the defendant’s fraudulent actions. The Washington report explains: “According to a 2007 Columbia Law Review article, qui tam cases are considered essential to identifying many types of complex medical fraud that might escape detection through routine oversight activities.” Relators must follow a detailed claim-filing process and are entitled to a share of the recovery if one exists. Thus far, the state has seen no evidence of relators filing frivolous claims under the WFCA.
- Recommendation for Reauthorization
The Legislative Auditor ultimately concludes that the state should reauthorize the WFCA. Responding to a draft report, the state Attorney General issued a letter in October 2015 agreeing with the Auditor. In the letter, he cites the WFCA’s role in both detecting and deterring fraud as well as recovering money. He writes: “We owe it to the citizens of Washington to do all that we can to bring integrity and accountability to the expenditure of Washington’s Medicaid Funds.” A bill to reauthorize the law and expand the qui tam provisions through June 2023 has been pre-filed for the state legislature’s consideration in the 2016 term.
Variations in State False Claims Acts
While Washington’s statute focuses on Medicaid fraud, a number of other states have broader versions more akin in scope to the federal FCA. For example, California’s False Claims Act covers any form of false or fraudulent claim for state or local funds and Florida’s False Claims Act defines “claim” broadly, focusing on “any request or demand, whether under a contract or otherwise, for money or property.” Notably, New York’s False Claims Act is actually broader than the federal FCA because the federal law does not cover tax matters while the New York statute covers certain tax violations with pleaded damages in excess of $350,000 and a defendant with sales or income over $1 million per year. In contrast, some states do not have any form of state FCA.
Fighting Fraud: A Whistleblower’s Law Firm
As a health care fraud law firm, The Brod Law Firm uses all tools available to fight fraud, including both state and federal False Claims Acts. Quite often, a case will involve both the federal FCA and one or more state FCAs. While we are based in California, we work with whistleblowers on cases nationwide. If you believe you have witnessed fraud on the government, whether involving money wrongfully taken from federal and/or state programs, call to schedule a no-cost consultation. In most qui tam cases, we do not require an upfront fee and we operate on a contingent fee so we only get paid if the government (and the relator) recovers money.
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