Source: https://www.employmentlawgroup.com/in-the-news/articles/maryland-false-health-care-claims-act-2010/
Timestamp: 2019-04-24 08:13:44+00:00

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This article by Jason Zuckerman was published by Maryland State Bar Association Section of Labor and Employment Law Newsletter on December 1, 2010.
In April 2010, the Maryland False Health Care Claims Act of 2010 (SB 279) (MD FCA), 1was signed 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. Violators of the Act may be liable for treble damages and fined $10,000 per violation. Similar to the Federal False Claims Act,2 an individual, known as a relator, may file a civil action under seal against an alleged violator on behalf of the State. The State is then given an opportunity to intervene in the action. If the action is successful, the relator may be awarded between 15 and 25 percent of the amount recouped.
If the State elects to intervene in a case, it takes on the primary responsibility for prosecuting the claim and is not bound by any actions of the relator.17 The State may elect to pursue alternative remedies18 or settle the claims notwithstanding any objections by the relator.19 Both the State and defendant may seek to limit the relator’s involvement in the proceedings if it is shown that the relator’s unrestricted participation would interfere with the State’s case or “harass the defendant or cause the defendant undue burden or unnecessary expense.” 20If at any time the state withdraws as a party to the action, the court must dismiss the action.21 In contrast to the Federal False Claims Act, a relator cannot pursue an action under the Act without government intervention.
Similar to the federal False Claims Act, the Maryland Act prohibits retaliation against an employee, contractor, or grantee who acts in furtherance of an action under the act.3940 , Protected conduct under the Act includes: A whistleblower suffering unlawful retaliation can file a civil action seeking an injunction against further retaliation; reinstatement to full seniority with all fringe benefits; two times the amount of lost wages, benefits, other remuneration, including interest; attorneys’ costs and fees; punitive damages; and the assessment of a civil penalty of up to $5,000 and any other compensatory damages necessary to make the whistleblower whole.
The Act took effect on October 1, 2010 but applies retroactively.43 The statute of limitations is six years from the date on which the alleged false claim was made or three years from when the facts material to the right of action are known or should have been known by the relator, State’s Inspector General, or the Director of the State’s Medicaid Fraud Control Unit.44 In no event may an action be filed more than 10 years after the date on which the underlying false claim was made.
In sum, while the Act is not as robust as most state false claims acts, it provides a substantial incentive for employees to blow the whistle on health care fraud and provides robust protection against retaliation.
10 See 31 U.S.C. § 3730(b)(1) (“A person may bring a civil action for a violation of section 3729 for the person and for the United States Government.”).
11 § 2-604(a)(1)(i) (section 2-602(a) prohibits the making of false claims).
23 See 31 U.S.C. § 3730(e).
26 Rockwell Int’l Corp. v. U.S., 549 U.S. 457, 470-71 (2007).
27 United States ex rel. Hansen v. Cargill, Inc., 107 F. Supp. 2d 1172 (N.D. Cal. 2000) (finding relator was not original source where relator was not witness to facts upon which allegations were based and did not have firsthand knowledge).
28 United States ex rel. Lam v. Tenet Healthcare Corp. 287 Fed. Appx. 396, 401 (5th Cir. 2008).
39 See generally § 2-607.
40 State employees are not protected under the Act. See § 2-607(c)-(d)(2).
45 Press Release, Maryland False Health Claims Act of 2010 Passes Final Vote in Maryland General Assembly (Apr. 9, 2010) (last visited Nov. 29, 2010).
46 See 42 U.S.C. § 1396h.
47 Publication of OIG’s Guidelines for Evaluating State False Claims Acts, 71 Fed. Reg. 48552 (Aug. 21, 2006).
49 42 U.S.C. § 1396h(a).
50 42 U.S.C. § 1396h(b).
52 See Publication of OIG’s Guidelines for Evaluating State False Claims Acts, 71 Fed. Reg. 48552-554 (Aug. 21, 2006).
53 Amy A. Devadas, Fiscal and Policy Note Revised SB 279, Dep’t. of Legis. Servs., Md. Gen. Assemb. 2010, at 10 (2010). The federal False Claims Act permits a private qui tam action regardless of intervention and imposes a minimum civil fine of $5,000. See 31 U.S.C. §§ 3730(b), 3729(a)(1)(G).

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