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Governor O’Malley Signs the Maryland False Health Care Claims Act of 2010

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On April 13, 2010, the Maryland False Health Claims Act of 2010 (SB 279) was signed into law by Governor O’Malley.  The Act prohibits a person from knowingly presenting or causing to be presented a false or fraudulent claim for payment or approval to a State health plan or program and creates a right of action against those who submit a false claim.  The Act also creates robust protections for whistleblowers.  Below is a summary of the Act which is to be codified from section 2-601 to section 2-611 of the Annotated Code of Maryland.

• A person may not knowingly present or cause to be presented a false or fraudulent claim for payment or approval.  The concealment or improper reduction of a debt owed to the State (also known as a reverse false claim) is prohibited as well.  Violators are subject to a fine of up to $10,000 and may be liable for up to three times the damages sustained by the State, and in no event, less than the loss suffered by the State.

• An individual may file a civil action on behalf of the State seeking any damages permitted by law as well as costs and attorney’s fees.  An action filed by an individual shall remain under seal for at least 60 days, during which the State shall investigate the claim and may elect to intervene.  If the State declines to intervene, the court must dismiss the case.

• If the State intervenes in a civil action brought by an individual, the State will have the primary responsibility for proceeding with the action and may withdraw from the action at anytime.  If the State withdraws, the court must dismiss the case.

• If the State proceeds with an action and prevails, the person who initiated the action shall be awarded an amount between 15 and 25% of the proceeds of the action.  However, if the court finds that the action is based upon publicly available information, the award is limited to 10% unless the individual is an original source.  Courts do not have jurisdiction to hear claims brought by an individual who is not an original source, though the State may still pursue the action independently. 

• Retaliation against any employee, contractor, or grantee is prohibited.  Protected conduct includes: any lawful act taken in furtherance of the Act; objections to reasonably suspected violations; participation in any action brought under the Act; and any actual or threatened disclosure of information which the whistleblower reasonably believes evidences a violation of the Act.  Prohibited retaliation includes discharging, suspending, demoting, threatening, harassing, discriminating against, or taking any other adverse action relating to the conditions of employment, contract, or agency.  

• Whistleblowers suffering retaliation may file a civil action seeking injunctive relief including reinstatement and up to two times the amount of lost wages, benefits, and other remuneration, including interest.  Whistleblowers may also seek any other relief necessary to make them whole as well and punitive damages. 

For information about The Employment Law Group® law firm’s False Claims Act Practice, click here.

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