Whistleblower Law Blog

Topic: Maryland False Health Care Claims Act

Maryland Attorney General Urges Adoption of Expanded State False Claims Act

On February 5, 2015, Maryland proposed a new, expanded state False Claims Act that would better allow Maryland to deter and recover damages for fraud against the state. Maryland Attorney General Brian Frosh urged adoption of the Act, which would expand Maryland’s current limited version that only applies to Medicaid and health-care related fraud.

Under the proposed False Claims Act, Maryland may receive triple the damages for its losses, while the whistleblower who initiates the claim is allowed to receive a portion of the state’s recovery and is also protected against retaliation in the work place. The state’s current version of the Act has allowed it to recover $28 million a year in each of the past two years from Medicaid-related cases alone. Adopting the proposed expansion will allow Maryland to achieve greater success in deterring fraud and recovering funds, much like the federal government.

Under the federal False Claims Act, the federal government recouped nearly $5 billion in 2012. To incentivize states to adopt laws more closely mirroring the federal False Claims Act, the federal government, under the Deficit Reduction Act of 2005, allows states to collect an additional 10% of federal Medicaid funds recovered through a state action.

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

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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