Update On False Claims Developments at the State Level

By on April 10, 2015

On March 21, 2015, the Maryland state senate passed a revised version of Bill No. 374, which, as previously noted, would create a state version of the federal False Claims Act (FCA) if signed into law.  As amended, however, the proposed statute is somewhat less plaintiff-friendly than before.  For example, it:

  • imposes an absolute 10-year statute of limitations, whereas the original bill allowed actions to be filed up to three years “after the date when facts material to the right of action . . . reasonably should have been known,” regardless of how long after the actual violation this was;
  • limits whistleblower protection, by narrowing the scope of actionable retaliatory conduct to omit the phrase “any other adverse action taken against an employee, contractor, or agent . . . .”; and
  • removes the possibility of the government obtaining attorney’s fees for successful actions.

See generally 2015 Md. Senate Bill No. 374.  The other house of the Maryland state legislature made similar amendments to its version of the bill on April 2, 2015.  See generally 2015 Md. House Bill No. 405.  The combined bills were sent to Governor Larry Hogan—who is expected to sign them into law—on April 8, 2015.  Until the law’s October 1, 2015 effective date, however, Maryland remains one of nine states with false claim laws that are only applicable in the health care context, along with Colorado, Connecticut, Louisiana, Michigan, New Hampshire, Texas, Wisconsin and Washington.

With respect to Washington, it is worth noting that the state’s Medicaid Fraud False Claims Act is set to expire on June 30, 2017.  See Wash. Rev. Code § 43.131.420 (2012).  As of now, the Act imposes civil penalties of $5,500–11,000, plus triple damages, for, inter alia, “[k]nowingly present[ing] . . . a false or fraudulent [Medicaid] claim for payment or approval,” and includes a qui tam provision and whistleblower protections.  See generally Wash. Rev. Code § 74.66 (2012).  Both of the state’s legislative houses have introduced bills to reauthorize and extend the law.  See Jan. 19, 2015 Washington Senate Bill No. 5287; Jan. 22, 2015 Washington House Bill No. 1067.  Legal practitioners, health care providers and other government contractors should keep a close eye on these developments and other legislation designed to add to or modify FCA analogs at the state level.

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