Source: https://www.phillipsandcohen.com/maryland/
Timestamp: 2019-04-23 20:13:00+00:00

Document:
The Maryland whistleblower law, the Maryland False Claims Act, was enacted in 2015 and expands Maryland’s qui tam provisions beyond Medicaid.
The law imposes liability on persons who knowingly present fraudulent or false claims for payment to Maryland governmental entities, misappropriate government property, or conceal or avoid obligations to pay the government, among other violations.
Maryland’s False Health Claims Act remains in effect and imposes liability on persons who knowingly submit false or fraudulent claims to Maryland state health plans or programs, including Medicaid.
Fines – Under both the False Claims Act and the False Health Claims Act a defendant may be ordered to pay damages equal to up to three times the actual harm to the state, plus a fine not to exceed $10,000 for each violation. Maryland law also requires that the state government intervene in an action before it goes forward. Whistleblowers thus cannot prosecute allegations under Maryland law without the state’s participation.
Whistleblower awards – The whistleblower in a Maryland False Claims Act or False Health Claims Act case may be awarded between 15 and 25 percent of amounts recovered. The court may reduce the amount of the award if the whistleblower planned and initiated the fraud, or if the action is based on information disclosed in the media or public hearings.
Whistleblower protection – Both the False Claims Act and the False Health Claims Act protect whistleblowers from retaliation by their employers.
Statute of limitations – Under either Act plaintiffs must file their complaint within ten years of the date on which the violation occurred.
As amended by 2014 Maryland Laws Ch. 460. Note: SB 374, effective June 1, 2015, expands the coverage of the Maryland False Claims Act to include false claims against a government entity, not just health plans.
(a) In general. — In this subtitle the following words have the meanings indicated.
2. Will reimburse the contractor, grantee, or other recipient for any portion of the money or other property that is requested or demanded.
(2) “Claim” does not include requests or demands for money or other property that the State through a State health plan or State health program has paid to an individual as compensation for State employment or as an income subsidy with no restrictions on that individual’s use of the money or other property.
(iii) Any index or other manner of access to any item listed in item (i) of this item.
(2) Under an employer’s promise or implied promise of payment of wages or other remuneration.
(2) Promises or implies that the employee will receive wages or other remuneration in payment for the performance of those services.
(2) “Knowing” or “knowingly” does not mean, with respect to information, that a person acts in a manner that constitutes mistake or negligence.
(g) Material. — “Material” means having a natural tendency to influence or be capable of influencing the payment or receipt of money or other property.
(4) The retention of an overpayment.
(i) Provider. — “Provider” has the meaning stated in § 2-501 of this title.
(9) A division, board, bureau, office, committee, or commission of any of the public bodies listed in this subsection.
(2) Any other adverse action taken against an employee, contractor, or agent relating to the conditions of employment, contract, or agency.
(iii) A private health insurance carrier, health maintenance organization, managed care organization as defined in § 15-101 of this article, health care cooperative or alliance, or another person that provides or contracts to provide health care services that are wholly or partially reimbursed by, or are a required benefit of, a health plan established in accordance with the federal Social Security Act of 1939, as amended, or by the State.
(2) “State health plan” includes a person who provides or contracts or subcontracts to provide health care services for an entity described in paragraph (1) of this subsection.
(m) State health program. — “State health program” means the Medical Assistance Program, the Cigarette Restitution Fund Program, the Developmental Disabilities Administration, the Behavioral Health Administration, the Prevention and Health Promotion Administration, or any other unit of the Department that pays a provider for a service rendered or claimed to have been rendered to a recipient.
(2) Take corrective action regarding the violation of a law or regulation that is the subject of a complaint or charge under this subtitle.
(9) Knowingly make any other false or fraudulent claim against a State health plan or a State health program.
(ii) An additional amount of not more than three times the amount of damages that the State sustains as a result of the acts of that person in violation of subsection (a) of this section.
(2) The total amount owed by a person under paragraph (1) of this subsection may not be less than the amount of the actual damages the State health plan or State health program incurs as a result of the person’s violation of subsection (a) of this section.
(x) Any other factor as justice requires.
(ii) The extent to which the person’s size, operations, or financial condition may affect the person’s ability to provide care and continue operations after payment of damages and fines.
(d) Additional penalties. — The penalties provided in subsection (b) of this section are in addition to any criminal, civil, or administrative penalties provided under any other State or federal statute or regulation.
(a) In general. — If the State finds that a person has violated or is violating § 2-602(a) of this subtitle, the State may file a civil action in a court of competent jurisdiction within the State against the person.
(2) Subject to the guidelines set forth in § 2-605(a)(4) of this subtitle, court costs and attorney’s fees.
(1) (i) A person may file a civil action on behalf of the person and the State in a court of competent jurisdiction within the State against a person who has acted or is acting in violation of § 2-602(a) of this subtitle.
(ii) A civil action filed under subparagraph (i) of this paragraph shall be brought in the name of the State.
(ii) Subject to the guidelines set forth in § 2-605(a)(4) of this subtitle, court costs and attorney’s fees.
(3) (i) The person shall serve on the State a copy of the complaint and a written disclosure of substantially all material evidence and information that the person possesses, in accordance with the provisions of Title 2 of the Maryland Rules for serving process on the State.
(ii) 1. The complaint shall be filed in camera and shall remain under seal for at least 60 days.
2. The complaint may not be served on the defendant until the complaint is unsealed and the court orders the complaint served.
3. Within 60 days after the State receives the complaint and the material evidence and information, the State may elect to intervene and proceed with the action.
(4) (i) For good cause shown, the State may move the court for extensions of the time during which the complaint remains under seal under paragraph (3)(ii)1 of this subsection.
(ii) Any motions made under subparagraph (i) of this paragraph may be supported by affidavits or other submissions in camera.
2. Served on the defendant in accordance with Title 2 of the Maryland Rules.
(ii) When answering a complaint filed under this section, a defendant shall follow the time frames and other provisions for filing answers to a complaint as required under Title 2, Chapter 300 of the Maryland Rules.
(iii) During the period in which the complaint is under seal, if the State’s investigation reveals that the act, transaction, or occurrence that gave rise to the alleged violation of this subtitle is reasonably likely to be continuing, the State shall notify the defendant as soon as practicable without jeopardizing the course and conduct of the State’s or the federal government’s investigation of the violation, compromising the development of evidence, or violating any State or federal law.
(ii) Notify the court that it will not intervene and proceed with the action.
(7) If the State does not elect to intervene and proceed with the action under paragraph (6) of this subsection, before unsealing the complaint, the court shall dismiss the action.
(8) If a person initiates an action under this section, no person other than the State may intervene in the action or initiate a related action based on the facts underlying the pending action.
(ii) Subject to paragraphs (3) through (6) of this subsection, the person who initiated the action may continue as a party to the action.
(2) (i) During an investigation by the State conducted either independently or in conjunction with a civil action filed under this subtitle, the Attorney General shall have the same rights of discovery as a civil litigant in the circuit court under Title 2, Chapter 400 of the Maryland Rules.
(ii) A person from whom the Attorney General seeks discovery shall be considered a party under Title 2, Chapter 400 of the Maryland Rules.
(3) (i) Notwithstanding the objections of the person initiating the action, the State may elect at any point to withdraw its intervention as a party to the action.
2. The court shall dismiss the action.
(4) Notwithstanding the objections of the person initiating the action, if the court determines after a hearing that a proposed settlement is fair, adequate, and reasonable under the circumstances, the State may settle a civil action filed under this section.
(ii) The defendant shows that unrestricted participation by the person initiating the action would harass the defendant or cause the defendant undue burden or unnecessary expense.
(iv) A limitation on the participation of the person in the litigation.
(1) Instead of proceeding with a civil action filed under this subtitle, the State may pursue any alternative remedy available to the State, including any appropriate administrative proceeding to determine a civil money penalty.
(2) If the State seeks an alternative remedy in another proceeding after intervening in a civil action filed under this section, the person initiating the action shall have the same rights in the alternative proceeding as the person would have had if the civil action had continued under this section.
(3) (i) A finding of fact or conclusion of law made in any alternative proceeding that has become final shall be conclusive on all parties to an action filed under this subtitle.
3. The finding or conclusion is not subject to judicial review.
(1) On a showing in camera by the State that certain actions of discovery by the person initiating the action would interfere with the State’s investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay the discovery for a period of not more than 60 days.
(ii) Any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceeding.
(ii) Proportional to the amount of time and effort that the person substantially contributed to the final resolution of the civil action.
2. Does not exceed 10% of the proceeds of the action.
(ii) The information described in subparagraph (i) of this paragraph does not include information disclosed and provided by the person initiating the action.
(3) Any payment to a person under paragraph (1) or (2) of this subsection shall be made from the proceeds of the action.
2. Reasonable attorney’s fees and costs.
(ii) In determining the amount of any award under subparagraph (i) of this paragraph, the court shall consider the amount of any penalties and damages recovered in the action and any other factor as justice may require.
(iii) Any expenses, fees, and costs awarded under this paragraph shall be awarded against the defendant.
(1) If a court finds that the action is initiated by a person who planned and initiated or otherwise deliberately participated in the violation on which the action was based, the court may, to the extent it considers appropriate, reduce the share of the proceeds of the action that the person otherwise would have received under this section.
(ii) Any relevant circumstances relating to the underlying violation.
2. May not receive any share of the proceeds of the action.
(ii) The dismissal of the person initiating the action in accordance with this paragraph does not prejudice the right of the State to continue the action.
(4) If the person initiating a civil action under § 2-604 of this subtitle is convicted of criminal conduct arising from the person’s participation in the violation on which the action was based after the proceeds from the action are awarded to that person, the court shall order the person to repay the proceeds previously awarded.
(2) The court finds that the claim of the person initiating the action was brought primarily for purposes of harassment or otherwise brought in bad faith.
(a) Actions against certain State officials. — No court in this State shall have jurisdiction over an action filed under § 2-604 of this subtitle against any member of the Legislative Branch or the Judiciary of the State, any member of the Governor’s Executive Council, the Attorney General, the Comptroller, or the State Treasurer if the action is based on evidence or information known to the State when the action was filed.
(2) Information or records to which the person had access as a result of the person’s public employment or office.
(c) Actions based on allegations in a civil suit in which State is a party. — A person may not bring an action under § 2-604 of this subtitle that is based on allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the State is already a party.
(iii) From the news media.
(ii) Has voluntarily provided the information to the State before filing an action under § 2-604 of this subtitle that is based on the information.
(3) The State, through the Attorney General, may file a civil action under § 2-603 of this subtitle based on the public disclosure described in paragraph (1) of this subsection.
(e) State not liable for expenses. — The State is not liable for expenses that a person incurs in bringing an action under § 2-604 of this subtitle.
(f) Action by auditor, investigator, attorney, financial officer or contracting officer who is or was public employee. — A person who is or was employed by the State, a local government, or any other political subdivision of the State as an auditor, investigator, attorney, financial officer, or contracting officer may not bring an action under § 2-604 of this subtitle that is based on allegations or transactions that the person discovered or learned of while acting in the person’s capacity as an auditor, investigator, attorney, financial officer, or contracting officer for the State, local government, or other political subdivision of the State.
(4) Objects to or refuses to participate in any activity, policy, or practice that the employee, contractor, or grantee reasonably believes is in violation of § 2-602(a) of this subtitle or a regulation adopted under this subtitle.
(1) An employee, contractor, or grantee may file a civil action against a person other than a supervisor in State government, an appointing authority in State government, or the head of a principal unit in State government if the person takes a retaliatory action against the employee, contractor, or grantee in violation of subsection (a) of this section.
(viii) Any other relief necessary to make the employee, contractor, or grantee whole.
(ii) Any collective bargaining agreement or employee contract.
(c) Exception. — This section does not apply to an employee as defined in § 1-501 of the Health Occupations Article or a State employee.
(1) An employee as defined in § 1-501 of the Health Occupations Article who is subject to retaliatory action in violation of subsection (a) of this section may file a civil action under Title 1, Subtitle 5 of the Health Occupations Article.
(2) A State employee who is subject to retaliatory action in violation of subsection (a) of this section may file a complaint under Title 5, Subtitle 3 of the State Personnel and Pensions Article.
(2) Use any appropriate means to inform its employees of the protections and obligations provided under this subtitle.
(2) 3 years after the date when facts material to the right of action are known by the relator, the State’s Inspector General, or the Director of the State’s Medicaid Fraud Control Unit or reasonably should have been known, but in no event more than 10 years after the date on which the underlying violation of § 2-602(a) of this subtitle is committed.
(b) Action for activity that occurred prior to October 1, 2010. — A civil action may be filed under this subtitle for activity that occurred prior to October 1, 2010, if the limitations period under subsection (a) of this section has not lapsed.
(2) Amend the complaint of the person who brought the action to clarify, add detail to the complaint, or add additional claims to the complaint.
(d) Relation back of State pleading. — To the extent that the claim of the State arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth by a person, a State pleading relates back to the filing date of the complaint of the person who originally brought the action.
(e) Standard of proof. — In an action filed under this subtitle, all essential elements of the cause of action, including damages, shall be proven by a preponderance of the evidence.
(f) Estoppel. — Notwithstanding any other provision of law or rule of procedure or evidence in the Maryland Rules, a final judgment rendered in favor of the State in any criminal proceeding charging fraud or false statements, whether on a verdict after trial or on a plea of guilty or nolo contendere, shall stop the defendant from denying the essential elements of the offense in any action filed under this subtitle that involves the same act, transaction, or occurrence as in the criminal proceeding.
(a) Remedy. — Any remedy provided under this subtitle is in addition to any other appropriate legal or equitable relief provided under any other applicable State or federal statute or regulation.
(1) The State shall make all reasonable efforts to coordinate any investigation of an alleged violation under this subtitle with any investigation conducted by the federal government involving the same violation.
(2) The State’s objective shall be to avoid unnecessary duplication of effort on the part of the person alleged to have committed the violation and to minimize the burden of the investigation on the person.
(c) Deposit of civil penalty into General Fund. — The Comptroller shall deposit any civil penalty or damages collected under this subtitle in the General Fund of the State.
(d) Regulations. — The Department or the Inspector General of the Department may adopt regulations to carry out the provisions of this subtitle.
(3) The number of claims made by the State based on alleged violations of § 2-602(a) of this subtitle that are settled without the filing of a civil action under this subtitle.
(4) The amount sought in the action and, if applicable, the amount for which the defendant is liable under a settlement agreement or court order.
(4) The amount, if any, collected by the State.

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