An Act Relating to False Claims under the Medicaid Program
Maine Legislature, Session 125, LD 1796
Committee: Judiciary
Sponsors: GIFFORD, THOMAS, BLACK, CRAY, LIBBY, O'CONNOR, SIROCKI, TURNER
Amends: 22 MRSA §15, 22 MRSA §15-A

Legislative Document 
No. 1796 
H.P. 1322 
House of Representatives, January 24, 2012 
An Act Relating to False Claims under the Medicaid Program 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Judiciary suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative GIFFORD of Lincoln. 
Cosponsored by Senator THOMAS of Somerset and 
Representatives: BLACK of Wilton, CRAY of Palmyra, LIBBY of Waterboro, McFADDEN 
of Dennysville, O'CONNOR of Berwick, SIROCKI of Scarborough, TURNER of Burlington. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  22 MRSA §15, as amended by PL 1995, c. 191, §§1 to 4, is further 
amended by adding at the end a new paragraph to read: 
Civil liability under this section is independent of liability under section 15-A. 
Sec. 2.  22 MRSA §15-A is enacted to read: 
§15-A.  MaineCare False Claims Act 
1.  Short title.  This section may be known and cited as "the MaineCare False Claims 
Act." 
2.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Claim" means a request or demand for money, property or services made to an 
employee, officer or agent of the State or to any contractor, grantee or other recipient, 
whether under contract or not, if any portion of the money, property or services 
requested or demanded issued from or was provided by the State or if the State will 
reimburse the contractor, grantee or other recipient for any portion of the money, 
property or services requested or demanded. 
B.  "Employer" means a person or an entity affiliated with the State that is involved 
in a nongovernmental function, including a postsecondary educational institution or a 
hospital, and that compensates another person under a contract of hire, express or 
implied, oral or written, to perform work for the employer. 
C.  "False claims action" means a court action brought under this section. 
D.  "Hospital" means a state mental health institute as defined in Title 34-B, section 
3801, subsection 9 or a hospital licensed under chapter 405. 
E.  "Knowingly" means that a person, with respect to information: 
(1)  Has actual knowledge of the information; 
(2)  Acts in deliberate ignorance of the truth or falsity of the information; or 
(3)  Acts in reckless disregard of the truth or falsity of the information. 
F.  "MaineCare program" means the program of health coverage provided under 
chapter 855. 
G.  "Original source" means a person who has direct and independent knowledge of 
the information on which allegations are based and has voluntarily provided the 
information to the State before filing an action under this section based on the 
information. 
H.  "Person" means a natural person, corporation, firm, association, organization, 
partnership, business or trust. 
I.  "Plaintiff," with respect to a qui tam action, means the relator and, if the Attorney 
General elects to intervene in and prosecute the action, the State or both as 
determined in the action. 
J.  "Postsecondary educational institution" means the University of Maine System, 
the Maine Maritime Academy and the Maine Community College System. 
K.  "Proceeds" means the amount awarded to the State against a defendant in an 
action under this section, including but not limited to damages, fines, payments for 
costs of compliance and other economic benefit realized by the State as a result of an 
action. 
L.  "Qui tam action" means an action brought by a person for the benefit of the person 
and for the benefit of the State in the name of the State and, at the election of the 
Attorney General, in which the State is also a plaintiff. 
M.  "Relator" means a person who brings a qui tam action for a violation of this 
section. 
3.  Prohibited acts.  A person may not file a false claim against the State with regard 
to the MaineCare program. 
A.  A person who commits any of the acts listed in this paragraph with regard to the 
MaineCare program is liable for damages, costs and penalties as provided in this 
subsection. 
(1)  A person is liable under this subsection if the person, with regard to the 
MaineCare program: 
(a)  Knowingly presents or causes to be presented a false claim; 
(b)  Knowingly makes, uses or causes to be made or used a false record or 
statement to conceal, avoid or decrease an obligation to pay or transmit 
money or property to the State; 
(c)  Conspires to defraud the State by causing a false claim to be allowed or 
paid or conspires to defraud the State by knowingly making, using or causing 
to be made or used a false record or statement to conceal, avoid or decrease 
an obligation to pay or transmit money or property to the State; 
(d)  Has possession, custody or control of public property or money used or 
to be used by the State and knowingly delivers or causes to be delivered less 
property or money than the amount for which the person receives a certificate 
or receipt; 
(e)  Is authorized to make or deliver a document certifying receipt of property 
used or to be used by the State and knowingly makes or delivers such a 
document that falsely represents the property used or to be used; 
(f)  Knowingly purchases, or receives as a pledge of an obligation or debt, 
public property from any person who lawfully may not sell or pledge the 
property; or 
(g)  Is a beneficiary of an inadvertent submission of a false claim, 
subsequently discovers the falsity of the claim and fails to disclose the false 
claim to the State within a reasonable time after the discovery of the false 
claim. 
Proof of a person's specific intent to defraud is not required to determine that the 
person acted knowingly. 
(2)  The court may determine a person liable to the State for a violation of this 
paragraph: 
(a)  For damages in the amount of 3 times the amount of damages that the 
State sustained because of the violation; 
(b)  For the costs of a qui tam action brought to recover any penalties and 
damages; and 
(c)  For a fine of not less than $5,000 and not more than $10,000 for each 
violation. 
B.  The court shall determine civil liability and assess damages against a person who 
violates this subsection of at least 2 times the amount of damages that the State 
sustained because of the violation, except that the court may not assess a fine if the 
court finds that: 
(1)  The person who committed the violation furnished officials of the State who 
are responsible for investigating false claims violations with all information 
known to the person about the violation within 30 days after the date on which 
the person first obtained the information; 
(2)  The person fully cooperated with any investigation into the violation by the 
State; and 
(3)  At the time the person furnished the State with information about the 
violation, no criminal prosecution, qui tam action or administrative action had 
commenced with respect to the violation and the person did not have actual 
knowledge of the existence of an investigation into the violation. 
C.  A person is liable to the State under this subsection for the acts of that person's 
agent when the agent acted with apparent authority, regardless of whether the agent 
acted, in whole or in part, to benefit the person and regardless of whether the person 
adopted or ratified the agent's claim, representation, statement or other action or 
conduct. 
D.  This subsection does not apply to claims, records or statements made to the State 
under Title 36. 
4.  False claims action; qui tam action.  A false claims action may be brought 
against a person who violates subsection 3 in accordance with this subsection and 
subsections 5 to 7. 
A.  The Attorney General shall diligently investigate a suspected or alleged violation 
of subsection 3.  If the Attorney General finds that a person has violated or is 
violating subsection 3, the Attorney General may bring a false claims action under 
this subsection against the person or intervene in a qui tam action brought by a person 
under paragraph B. 
B.  A private person may bring a qui tam action for a violation of subsection 3. 
(1)  Once filed, the qui tam action may be dismissed only with the written 
consent of the court, after taking into account the best interests of the parties 
involved and the public purpose of this section. 
(2)  The relator shall serve on the Attorney General a copy of the complaint and 
written disclosure of substantially all material evidence and information the 
relator possesses as provided in the Maine Rules of Civil Procedure, Rule 5. 
(3)  The complaint must be filed in camera and must remain under seal for at 
least 60 days and may not be served on the defendant until the court so orders. 
(4)  The Attorney General may elect to intervene in and proceed with the action 
on behalf of the State within 60 days after the Attorney General receives both the 
copy of the complaint and the written disclosure of the material evidence and 
information from the relator. 
(5)  The Attorney General may, for good cause shown, move the court for 
extensions of time during which the complaint remains under seal under 
subparagraph (3) and during which the Attorney General may elect to intervene 
in and proceed with the action under subparagraph (4).  A motion under this 
subparagraph must be supported by an affidavit or other submission in camera. 
(6)  Before the expiration of the 60-day period under subparagraph (4) or of any 
extension ordered under subparagraph (5), the Attorney General shall: 
(a)  Proceed with the action by intervention on behalf of the State as plaintiff, 
in which case the action must be conducted by the Attorney General as the 
attorney for the plaintiff; or 
(b)  Notify the court that the Attorney General declines to take over the 
action, in which case the relator has the right to conduct the action as 
plaintiff. 
(7)  The defendant is not required to respond to any complaint filed under this 
paragraph until after the complaint is unsealed and served on the defendant as 
provided in the Maine Rules of Civil Procedure, Rule 5. 
(8)  When a person brings an action as relator under this paragraph, a person 
other than the Attorney General on behalf of the State may not intervene or bring 
a related action based on the facts underlying the action while the action is 
pending. 
C.  The rights of the parties to a qui tam action under this subsection are determined 
under this paragraph. 
(1)  If the Attorney General elects not to intervene in and proceed with the action, 
the relator has the right to conduct the action as plaintiff. 
(a)  At the request of the Attorney General, and upon payment by the 
Attorney General of the cost of transcription, copying and mailing, the relator 
shall serve on the Attorney General copies of all pleadings filed in the action. 
(b)  The court, upon the Attorney General's showing good cause and without 
limiting the status and rights of the relator, may permit the Attorney General 
to intervene after the expiration of the 60-day period under paragraph B, 
subparagraph (4) and any extension ordered under paragraph B, 
subparagraph (5). 
(2)  If the Attorney General intervenes in and proceeds with the qui tam action, 
the Attorney General has the primary responsibility for prosecuting the action 
and is not bound by any acts of the relator.  The relator has the right to continue 
as a party to the action, subject to the limitations of this subparagraph. 
(a)  The Attorney General may move to dismiss the action for good cause 
shown notwithstanding the objections of the relator if the relator has been 
notified by the Attorney General of the filing of the motion and the court has 
provided the relator with an opportunity to oppose the motion and present 
evidence at a hearing. 
(b)  The Attorney General may settle the action with the defendant 
notwithstanding the objections of the relator if the court determines, after a 
hearing at which the relator has had an opportunity to present evidence, that 
the proposed settlement is fair, adequate and reasonable under all of the 
circumstances. 
(c)  Upon a showing by the Attorney General that unrestricted participation 
during the course of the action by the relator would interfere with or unduly 
delay the prosecution of the action by the Attorney General or would be 
repetitious, irrelevant or for purposes of harassment, the court may, in its 
discretion, impose limitations on the participation of the relator, including but 
not limited to: 
(i)  Limiting the number of witnesses the relator may call; 
(ii)  Limiting the length of the testimony of the witnesses called by the 
relator; and 
(iii)  Limiting the relator's cross-examination of witnesses. 
(d)  Upon a showing by the defendant that unrestricted participation during 
the course of the action by the relator would be for purposes of harassment or 
would cause the defendant undue burden or unnecessary expense, the court 
may limit the participation of the relator in the action. 
(3)  Whether or not the Attorney General intervenes in and proceeds with the 
action, upon a showing by the Attorney General that certain actions of discovery 
by the relator would interfere with the Attorney General'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. A showing under 
this subparagraph must be conducted in camera. The court may extend a 60-day 
stay granted under this subparagraph upon a further showing in camera that the 
Attorney General has pursued the criminal or civil investigation or proceedings 
with reasonable diligence and that the proposed discovery in the qui tam action 
would interfere with the ongoing criminal or civil investigation or proceedings. A 
motion with regard to discovery in a qui tam action must be filed with the court 
in accordance with the Maine Rules of Civil Procedure, Rules 26 to 37, as 
applicable. 
(4)  Notwithstanding the provisions of paragraph B, the Attorney General may 
elect to pursue its claim through any alternate remedy available to the State, 
including any administrative proceeding to determine a civil penalty or any 
action under section 15. If an alternate remedy is pursued in another proceeding, 
the relator has the same rights in the proceeding as the relator would have had if 
the action had continued under this subsection. For the purposes of this 
subparagraph, a finding or conclusion is final if it has been finally determined on 
appeal to the appropriate court of the State, if all time for filing appeals with 
respect to the finding or conclusion has expired or if the finding or conclusion is 
not subject to judicial review. 
D.  If the Attorney General intervenes in and proceeds with a qui tam action under 
this subsection and a judgment is entered in favor of the plaintiff or a settlement is 
entered in the action, the court shall enter an order as follows. 
(1)  Except as provided in subparagraph (2), the court may award the relator at 
least 15% but not more than 25% of the proceeds of the action or settlement of 
the claim, depending on the extent to which the relator and the counsel for the 
relator contributed to the prosecution of the action. Any payment to the relator 
under this subparagraph must be made from the proceeds. 
(2)  If the court finds that the action is based primarily on disclosures of specific 
information, other than information provided by the relator, relating to allegations 
or transactions specifically in a criminal, civil or administrative hearing, in a 
legislative or administrative report, hearing, audit or investigation or from the 
news media, the court may award the relator such sums as it considers 
appropriate, but in no case more than 10% of the proceeds, taking into account 
the significance of the information and the role of the relator in advancing the 
case to litigation. Any payment to the relator under this subparagraph must be 
made from the proceeds. 
(3)  The court shall order payment of the reasonable expenses of the relator that 
the court finds to be necessarily incurred, plus reasonable attorney's fees and 
costs. All expenses, fees and costs must be awarded against the defendant. 
E.  If the Attorney General does not intervene in and proceed with a qui tam action 
under this subsection and a judgment is entered in favor of the plaintiff or a 
settlement is entered in the action, the court shall enter an order as follows.  The 
relator must receive an amount that the court determines reasonable for causing to be 
collected the fines and damages.  The amount must be at least 25% but not more than 
30% of the proceeds of the action or settlement and must be paid out of the proceeds.  
The relator must also receive an amount for reasonable expenses that the court finds 
to be necessarily incurred, plus reasonable attorney's fees and costs.  All expenses, 
fees and costs must be awarded against the defendant. 
F.  Whether or not the Attorney General intervenes in and proceeds with the action, 
and whether or not a judgment is entered in favor of the plaintiff or a settlement is 
entered in the action, if the court finds that the action was brought by a relator who 
planned and initiated the violation of subsection 3 upon which the action was 
brought, the court may, to the extent the court considers appropriate, reduce the share 
of the proceeds of the action that the person would otherwise receive under this 
subsection. The court shall take into account the role of the relator in advancing the 
case to litigation and any relevant circumstances pertaining to the violation. If the 
relator is convicted of a crime arising from the role of the relator in the violation of 
subsection 3, the relator must be dismissed from the qui tam action and may not 
receive any share of the proceeds of the action. Dismissal of the relator under this 
paragraph does not prejudice the right of the State to continue the action as plaintiff. 
G.  Except as otherwise provided in this section, no liability may be incurred by the 
State, the department or the Attorney General for any expenses, attorney's fees or 
other costs incurred by any person in bringing or defending an action under this 
subsection. 
H.  All money collected from the defendant in an action under this subsection, with 
the exception of money payable under this subsection to another person, must be paid 
to the State Controller for credit to the MaineCare False Claims Act Fund under 
subsection 8. 
I.  The following limitations apply to qui tam actions under this subsection. 
(1)  The court does not have jurisdiction over an action brought against a member 
of the Legislature, a Judge of the District Court or a Justice of the Superior Court 
or Supreme Judicial Court or an executive branch official appointed by the 
Governor if the action is based on evidence or information known to the State 
when the action was brought. 
(2)  The court does not have jurisdiction over an action based upon the public 
disclosure of allegations or transactions in a criminal, civil or administrative 
hearing, in a legislative or administrative report, hearing, audit or investigation or 
from the news media, unless the Attorney General intervenes in and proceeds 
with the action or the relator is the original source of the information. 
(3)  The court does not have jurisdiction over an action brought by a former or 
present member of the Armed Forces of the United States against another 
member of the Armed Forces arising out of that other member's service in the 
Armed Forces. 
(4)  A person may not bring an action if the action is based upon allegations or 
transactions that are the subject of a civil suit or an administrative civil penalty 
proceeding in which the State is a party. 
(5)  Upon motion of the Attorney General, the court may, in consideration of all 
the equities, dismiss a relator as plaintiff if the elements of the false claims action 
alleged in the complaint have been publicly disclosed specifically in the news 
media or in a publicly disseminated governmental report at the time the 
complaint is filed. 
J.  In the furtherance of a qui tam action under this subsection, the provisions of this 
paragraph apply as protections for employees. An employee who is discharged, 
demoted, suspended, threatened, harassed or in any other manner discriminated 
against in the terms and conditions of employment by the employee's employer 
because of lawful acts done by the employee on behalf of the employee or others in 
furtherance of a qui tam action under this subsection, including investigation for, 
initiation of, testimony for or assistance in an action filed or to be filed under this 
subsection, is entitled to all relief necessary to make the employee whole. Relief 
under this paragraph includes reinstatement with the same seniority status that the 
employee would have had but for the discriminatory action of the employer, 2 times 
the amount of back pay, interest on the back pay and compensation for any special 
damages sustained as a result of the employer's discriminatory action, including 
litigation costs and reasonable attorney's fees. An employee may bring an action in 
Superior Court in the county in which the employer is located or the county of 
residence of the employee. 
5.  Qui tam action procedures.  The following provisions apply to a qui tam action 
under subsection 4. 
A.  An action under subsection 4 may not be brought more than 6 years after the date 
on which the violation was committed or more than 3 years after the date when facts 
material to the cause of action are known or reasonably should have been known by 
the state official charged with the responsibility to act in such circumstances but in no 
event more than 10 years after the date on which the violation is committed, 
whichever occurs later. 
B.  An action under subsection 4 may be brought by the relator in the county in which 
the relator resides, in the county in which the defendant has its principal place of 
business or in the Superior Court of Kennebec County. 
C.  In an action brought under subsection 4, the State or the relator is required to 
prove all essential elements of the cause of action, including damages, by a 
preponderance of the evidence. 
D.  Notwithstanding any other provision of law, a guilty verdict rendered in a 
criminal proceeding alleging false statements or fraud, whether upon a verdict after 
trial or upon a plea of guilty or nolo contendere, estops the defendant from denying 
the essential elements of the offense in an action brought under subsection 4 that 
involves the same transaction as in the criminal proceeding. 
6.  Civil investigatory demands.  In an investigation of a violation under subsection 
3, the provisions of Title 5, section 211 apply to civil investigatory demands and to the 
examination of books, records, papers and memoranda of whatever nature and persons 
having knowledge regarding those materials. 
7.  Applicable rules of civil procedure.  The Maine Rules of Civil Procedure apply 
to all aspects of service, subpoena power, discovery and court procedure of an action filed 
pursuant to subsection 4 unless inconsistent with the provisions of this section. 
8.  Application.  This section applies to false claims filed against the State on or after 
January 1, 2006 with regard to the MaineCare program, subject to the statute of 
limitations specified in subsection 5, paragraph A. 
9.  MaineCare False Claims Act Fund.  There is established within the department 
the MaineCare False Claims Act Fund to receive funds collected as a result of actions 
prosecuted under this section and to provide funding for investigatory, enforcement and 
litigation expenses within the department related to this section.  The MaineCare False 
Claims Act Fund is a nonlapsing fund dedicated to the purposes of this section. 
10.  Remedies under other laws; severability of provisions; liberality of 
legislative construction; adoption of legislative history.  The remedies provided for in 
this section are not exclusive and are in addition to any other remedies provided for under 
section 15, in any other law or available under common law. If any provision of this 
section or the application thereof to any person or circumstance is held to be 
unconstitutional, the remainder of the section and the application of the provision to other 
persons and circumstances is not affected thereby. This section must be liberally 
construed and applied to promote the public interest. This section also adopts the 
congressional intent behind the federal False Claims Act, 31 United States Code, Sections 
3729 to 3733, including the federal False Claims Amendments Act of 1986. 
SUMMARY 
This bill enacts the MaineCare False Claims Act in order to protect the State and the 
Federal Government against false and fraudulent claims under the Medicaid program, 
known in the State as the MaineCare program.  This bill provides authorization for qui 
tam actions, which are brought by a person for the benefit of the person and the State in 
the name of the State.  This bill provides protection from discrimination for an employee 
who participates in a qui tam action.  This bill provides possible recoveries for the person 
who brings the qui tam action in addition to recoveries for the State.  This bill establishes 
the MaineCare False Claims Act Fund to receive the proceeds payable to the State as a 
result of false claims litigation to be used for investigatory, enforcement and litigation 
expenses.