Whistleblower Lawyer Blog

AN ACT establishing the “New Jersey 1 False Claims Act,”
2 supplementing Title 2A of the New Jersey Statutes and amending
3 P.L.1968, c.413.
4
5 BE IT ENACTED by the Senate and General Assembly of the State
6 of New Jersey:
7
8 1. (New section) Sections 1 through 15 and sections 17 and 18 of
9 this act shall be known and may be cited as the “New Jersey False
10 Claims Act.”
11
12 2. (New section) As used in this act:
13 “Attorney General” means the Attorney General of the State of
14 New Jersey, or his designee.
15 “Claim” means a request or demand, under a contract or
16 otherwise, for money, property, or services that is made to any
17 employee, officer, or agent of the State, or to any contractor,
18 grantee, or other recipient if the State provides any portion of the
19 money, property, or services requested or demanded, or if the State
20 will reimburse the contractor, grantee, or other recipient for any
21 portion of the money, property, or services requested or demanded.
22 The term does not include claims, records, or statements made in
23 connection with State tax laws.
24 “Knowing” or “knowingly” means, with respect to information,
25 that a person:
26 (1) has actual knowledge of the information; or
27 (2) acts in deliberate ignorance of the truth or falsity of the
28 information; or
29 (3) acts in reckless disregard of the truth or falsity of the
30 information.
31 No proof of specific intent to defraud is required. Acts occurring
32 by innocent mistake or as a result of mere negligence shall be a
33 defense to an action under this act.
34 “State” means any of the principal departments in the Executive
35 Branch of State government, and any division, board, bureau,
36 office, commission or other instrumentality within or created by
37 such department; and any independent State authority, commission,
38 instrumentality or agency.
39
40 3. (New section) A person shall be jointly and severally liable
41 to the State for a civil penalty of not less than and not more than the
42 civil penalty allowed under the federal False Claims Act (31 U.S.C.
43 s.3729 et seq.), as may be adjusted in accordance with the inflation
44 adjustment procedures prescribed in the Federal Civil Penalties
45 Inflation Adjustment Act of 1990, Pub.L.101-410, for each false or
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fraudulent claim, plus three times the amount 1 of damages which the
2 State sustains, if the person commits any of the following acts:
3 a. Knowingly presents or causes to be presented to an employee,
4 officer or agent of the State, or to any contractor, grantee, or other
5 recipient of State funds, a false or fraudulent claim for payment or
6 approval;
7 b. Knowingly makes, uses, or causes to be made or used a false
8 record or statement to get a false or fraudulent claim paid or
9 approved by the State;
10 c. Conspires to defraud the State by getting a false or
11 fraudulent claim allowed or paid by the State;
12 d. Has possession, custody, or control of public property or
13 money used or to be used by the State and intending to defraud the
14 entity or willfully to conceal the property, delivers or causes to be
15 delivered less property than the amount for which the person
16 receives a certificate or receipt;
17 e. Is authorized to make or deliver a document certifying
18 receipt of property used or to be used by the State and knowingly
19 makes or delivers a receipt without completely knowing that the
20 information on the receipt is true;
21 f. Knowingly buys, or receives as a pledge of an obligation or
22 debt, public property from any person who lawfully may not sell or
23 pledge the property; or
24 g. Knowingly makes, uses, or causes to be made or used a false
25 record or statement to conceal, avoid, or decrease an obligation to
26 pay or transmit money or property to the State.
27
28 4. (New section) The court may reduce the treble damages
29 authorized under section 3 of this act to not less than twice the
30 amount of damages which the State sustains if the court finds all of
31 the following:
32 a. The person committing the violation furnished officials of
33 the State responsible for investigating false claims violations with
34 all information known to such person about the violation within 30
35 days after the date on which the person first obtained the
36 information;
37 b. The person fully cooperated with any government
38 investigation of the violation; and
39 c. At the time such person furnished the State with information
40 about the violation, no criminal prosecution, civil action, or
41 administrative action had commenced with respect to such
42 violation, and the person did not have actual knowledge of the
43 existence of an investigation into such violation.
44
45 5. (New section) a. The Attorney General shall investigate a
46 violation of this act. If the Attorney General finds that a person has
47 violated or is violating this act, the Attorney General may bring a
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civil action in State or federal 1 court against the person. The
2 Superior Court shall have jurisdiction over a State action brought
3 pursuant to this act.
4 b. A person may bring a civil action for a violation of this act
5 for the person and for the State. Civil actions instituted under this
6 act shall be brought in the name of the State of New Jersey.
7 c. A complaint filed by a person under this act shall remain
8 under seal for at least 60 days and shall not be served on the
9 defendant until the court so orders. Once filed, the action may be
10 voluntarily dismissed by the person bringing the action if the
11 Attorney General gives written consent to the dismissal along with
12 the reason for consenting, and the court approves the dismissal.
13 d. A complaint alleging a false claim filed under this act shall
14 be so designated when filed, in accordance with the Rules
15 Governing the Courts of the State of New Jersey. Immediately
16 upon filing of the complaint, the plaintiff shall serve by registered
17 mail, return receipt requested, the Attorney General with a copy of
18 the complaint and written disclosure of substantially all material
19 evidence and information the person possesses. The Attorney
20 General may elect to intervene and proceed with the action on
21 behalf of the State within 60 days after it receives both the
22 complaint and the material evidence and information.
23 e. If a person brings an action under this act and the action is
24 based upon the facts underlying a pending investigation by the
25 Attorney General, the Attorney General may take over the action on
26 behalf of the State. In order to take over the action, the Attorney
27 General shall give the person written notification within 30 days
28 after notice of the action is served on the Attorney General that the
29 Attorney General is conducting an investigation of the facts of the
30 action and will take over the action.
31 f. The Attorney General may, for good cause shown, request
32 that the court extend the time during which the complaint remains
33 under seal. Any such motion may be supported by affidavits or
34 other submissions in camera.
35 g. Before the expiration of the 60 day period or any extensions
36 obtained under subsection f., the Attorney General shall:
37 (1) file a pleading with the court that he intends to proceed with
38 the action, in which case the action is conducted by the Attorney
39 General and the seal shall be lifted; or
40 (2) file a pleading with the court that he declines to proceed
41 with the action, in which case the seal shall be lifted and the person
42 bringing the action shall have the right to conduct the action.
43 h. The defendant’s answer to any complaint filed under this act
44 shall be filed in accordance with the Rules Governing the courts of
45 the State of New Jersey after the complaint is unsealed and served
46 upon the defendant.
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i. When a person files an action 1 under this act, no other person
2 except the State may intervene or bring a related action based on the
3 facts underlying the pending action.
4
5 6. (New section) a. If the Attorney General proceeds with the
6 action, the Attorney General shall have primary responsibility for
7 prosecuting the action, and shall not be bound by any act of the
8 person bringing the action. The person bringing the action has the
9 right to continue as a party to the action, subject to limitations
10 specified in this act. The person bringing the action has an ongoing
11 duty to disclose information related to the action to the Attorney
12 General.
13 b. The Attorney General may move to dismiss the action
14 notwithstanding the objections of the person bringing the action,
15 provided that the person bringing the action has been notified by the
16 Attorney General and the court has provided the person bringing the
17 action with the opportunity for a hearing.
18 c. Nothing in this act shall be construed to limit the authority
19 of the Attorney General or the person bringing the action to settle
20 the action, if the court determines after a hearing that the proposed
21 settlement is fair, adequate, and reasonable under all the
22 circumstances. Upon a showing of good cause, the hearing may be
23 held in camera.
24 d. Upon a showing by the Attorney General that unrestricted
25 participation during the course of the litigation by the person
26 initiating the action would interfere with or unduly delay the
27 Attorney General's prosecution of the case, or would be repetitious,
28 irrelevant, or for purposes of harassment, the court may, in its
29 discretion, impose limitations on the person's participation,
30 including, but not limited to:
31 (1) Limiting the number of witnesses the person may call;
32 (2) Limiting the length of the testimony of the person's
33 witnesses;
34 (3) Limiting the person's cross-examination of witnesses; or
35 (4) Otherwise limiting the participation by the person in the
36 litigation.
37 e. Upon a showing by the defendant that unrestricted
38 participation during the course of the litigation by the person
39 initiating the action would be for purposes of harassment or would
40 cause the defendant undue burden or unnecessary expense, the court
41 may limit the participation by the person in the litigation.
42 f. If the Attorney General decides not to proceed with the
43 action, the seal shall be lifted and the person who initiated the
44 action shall have the right to conduct the action. The decision of the
45 Attorney General on whether to proceed with an action shall be
46 deemed final and shall not be subject to review by any court or
47 agency. If the Attorney General so requests, the Attorney General
48 shall be served at the expense of the Attorney General with copies
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of all pleadings and motions filed 1 in the action and copies of all
2 deposition transcripts. When a person proceeds with the action, the
3 court, without limiting the rights of the person initiating the action,
4 may permit the Attorney General to intervene and take over the
action on behalf of the State at a later date upon a 5 showing of good
6 cause.
7 g. Whether or not the Attorney General proceeds with the
8 action, upon a showing by the Attorney General that certain actions
9 of discovery by the person initiating the action would interfere with
10 an investigation by the State or the prosecution of a criminal or civil
11 matter arising out of the same facts, the court may stay such
12 discovery for a period of not more than 60 days. Such a showing
13 shall be conducted in camera. The court may extend the 60-day
14 period upon a further showing in camera by the Attorney General
15 that the criminal or civil investigation or proceeding has been
16 pursued with reasonable diligence and any proposed discovery in
17 the civil action will interfere with an ongoing criminal or civil
18 investigation or proceeding.
19 h. The application of one civil remedy under this act shall not
20 preclude the application of any other remedy, civil, administrative
21 or criminal, under this act or any other provision of law. Civil and
22 administrative remedies under this act are supplemental, not
23 mutually exclusive. If after the filing of a complaint under section
24 5 of this act, the Attorney General decides to pursue an alternate
25 administrative recovery action under subsection (e) of section 17 of
26 P.L.1968, c.413 (C.30:4D-17), the plaintiff shall have the same
27 rights in the administrative recovery action as the plaintiff would
28 have had if the action had continued in Superior Court. Any finding
29 of fact or conclusion of law made in the proceeding under
30 subsection (e) of section 17 of P.L.1968, c.413 (C.30:4D-17) that
31 has become final shall be conclusive on all parties to an action
32 initiated under section 5 of this act. As used in this subsection, the
33 term “final” means that the finding of fact or conclusion of law has
34 been finally determined on appeal to the appropriate court, all time
35 for filing such an appeal with respect to the finding or conclusion
36 has expired, or the finding or conclusion is not subject to judicial
37 review.
38
39 7. (New section) a. If the Attorney General proceeds with and
40 prevails in an action brought by a person under this act, except as
41 provided in subsection b., the court shall order the distribution to
42 the person of at least 15% but not more than 25% of the proceeds
43 recovered under any judgment obtained by the Attorney General
44 under this act or of the proceeds of any settlement of the claim,
45 depending upon the extent to which the person substantially
46 contributed to the prosecution of the action.
47 b. If the Attorney General proceeds with an action which the
48 court finds to be based primarily on disclosures of specific
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information, other than that provided by 1 the person bringing the
2 action, relating to allegations or transactions in a criminal, civil, or
3 administrative hearing; a legislative, administrative, or inspector
4 general report, hearing, audit, or investigation; or from the news
5 media, the court may award such sums as it considers appropriate,
6 taking into account the significance of the information and the role
7 of the person bringing the action in advancing the case to litigation.
8 c. The Attorney General shall receive a fixed 10% of the
9 proceeds in any action or settlement of the claim that it brings,
10 which shall be deposited in the “False Claims Prosecution Fund”
11 established in section 13 of this act and shall only be used to
12 support its ongoing investigation and prosecution of false claims
13 pursuant to the provisions of this act.
14 d. If the Attorney General does not proceed with an action
15 under this section, the person bringing the action or settling the
16 claim shall receive an amount which the court decides is reasonable
17 for collecting the civil penalty and damages. The amount shall be
18 not less than 25% and not more than 30% of the proceeds of the
19 action or settlement of a claim under this act.
20 e. Following any distributions under subsections a., b., c. or d.
21 of this section the State entity injured by the submission of a false
22 claim shall be awarded an amount not to exceed its compensatory
23 damages. Any remaining proceeds, including civil penalties
24 awarded under this act, shall be deposited in the General Fund.
25 f. Any payment under this section to the person bringing the
26 action shall be paid only out of the proceeds recovered from the
27 defendant.
28 g. Whether or not the Attorney General proceeds with the
29 action, if the court finds that the action was brought by a person
30 who knowingly planned and initiated the violation of this act upon
31 which the action was brought, the court may, to the extent the court
32 considers appropriate, reduce the share of the proceeds of the action
33 which the person would otherwise receive under this section, taking
34 into account the role of the person in advancing the case to
35 litigation and any relevant circumstances pertaining to the violation.
36 If the person bringing the action is convicted of criminal conduct
37 arising from his role in the violation of this act the person shall be
38 dismissed from the civil action and shall not receive any share of
39 the proceeds of the action. Such dismissal shall not prejudice the
40 right of the Attorney General to continue the action.
41
42 8. (New section) a. If the Attorney General initiates an action
43 under this act or assumes control of an action brought by a person
44 under this act, the Attorney General shall be awarded reasonable
45 attorney's fees, expenses, and costs.
46 b. If the court awards proceeds to the person bringing the
47 action under this act, the person shall also be awarded an amount
48 for reasonable attorney's fees, expenses, and costs. Payment for
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reasonable attorney's fees, expenses, 1 and costs shall be made from
2 the recovered proceeds before the distribution of any award.
3 c. If the Attorney General does not proceed with an action
4 under this act and the defendant is the prevailing party, the court
5 may award the defendant reasonable attorney's fees, expenses, and
6 costs against the person bringing the action if the court finds that
7 the claim of the person bringing the action was clearly frivolous,
8 clearly vexatious, or brought primarily for purposes of harassment.
9 d. No liability shall be incurred by the State or the Attorney
10 General for any expenses, attorney's fees, or other costs incurred by
11 any person in bringing or defending an action under this act.
12
13 9. (New section) a. No member of the Legislature, a member of
14 the Judiciary, a senior Executive branch official, or a member of a
15 county or municipal governing body may be civilly liable if the
16 basis for an action is premised on evidence or information known to
17 the State when the action was brought. For purposes of this
18 subsection, the term “senior Executive branch official” means any
19 person employed in the Executive branch of government holding a
20 position having substantial managerial, policy-influencing or
21 policy-executing responsibilities.
22 b. A person may not bring an action under this act based upon
23 allegations or transactions that are the subject of a pending action or
24 administrative proceeding in the State.
25 c. No action brought under this act shall be based upon the
26 public disclosure of allegations or transactions in a criminal, civil,
27 or administrative hearing, in an investigation, report, hearing or
28 audit conducted by or at the request of the Legislature or by the
29 news media, unless the action is brought by the Attorney General,
30 or unless the person bringing the action is an original source of the
31 information. For purposes of this subsection, the term “original
32 source” means an individual who has direct and independent
33 knowledge of the information on which the allegations are based
34 and has voluntarily provided the information to the State before
35 filing an action under this act based on the information.
36 d. No action may be brought under this act by a present or
37 former employee or agent of the State or any political subdivision
38 thereof when the action is based upon information discovered in any
39 civil, criminal or administrative investigation or audit which
40 investigation or audit was within the scope of the employee’s or
41 agent’s duties or job description.
42 e. Unless a person is an original source, a person may not bring
43 an action under this act that is based on allegations or transactions
44 that the person knew or had reason to know were known to the
45 Attorney General or other law enforcement officials prior to that
46 person filing the action or serving the disclosure of material
47 evidence. For the purposes of this subsection, the term “original
48 source” means an individual who has direct and independent
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knowledge of the information on 1 which the allegations are based
2 and has voluntarily provided the information to the State before
3 filing an action under this act based on this information.
4
5 10. (New section) a. No employer shall make, adopt, or enforce
6 any rule, regulation, or policy preventing an employee from
7 disclosing information to a State or law enforcement agency or from
8 acting to further a false claims action, including investigating,
9 initiating, testifying, or assisting in an action filed or to be filed
10 under this act.
11 b. No employer shall discharge, demote, suspend, threaten,
12 harass, deny promotion to, or in any other manner discriminate
13 against an employee in the terms and conditions of employment
14 because of lawful acts done by the employee on behalf of the
15 employee or others in disclosing information to a State or law
16 enforcement agency or in furthering a false claims action, including
17 investigation for, initiation of, testimony for, or assistance in an
18 action filed or to be filed under this act.
19 c. An employer who violates subsection b. of this section shall be
20 liable for all relief necessary to make the employee whole,
21 including reinstatement with the same seniority status such
22 employee would have had but for the discrimination, two times the
23 amount of back pay, interest on the back pay, compensation for any
24 special damage sustained as a result of the discrimination, and,
25 where appropriate, punitive damages. In addition, the defendant
26 shall be required to pay litigation costs and reasonable attorneys’
27 fees associated with an action brought under this section. An
28 employee may bring an action in the Superior Court for the relief
29 provided in this subsection.
30 d. An employee who is discharged, demoted, suspended,
31 harassed, denied promotion, or in any other manner discriminated
32 against in the terms and conditions of employment by his employer
33 because of participation in conduct which directly or indirectly
34 resulted in a false claim being submitted to the State shall be
35 entitled to the remedies under subsection c. of this section if, and
36 only if, both of the following occur:
37 (1) The employee voluntarily disclosed information to a State or
38 law enforcement agency or acts in furtherance of a false claims
39 action, including investigation for, initiation of, testimony for, or
40 assistance in any action filed or to be filed.
41 (2) The employee had been harassed, threatened with termination
42 or demotion, or otherwise coerced by the employer or its
43 management into engaging in the fraudulent activity in the first
44 place.
45
46 11. (New section) A civil action under this act may not be
47 brought:
48 a. More than six years after the date on which the violation of the
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1 act is committed; or
2 b. More than three years after the date when facts material to the
3 right of action are known or reasonably should have been known by
4 the State official charged with responsibility to act in the
5 circumstances, but in no event more than 10 years after the date on
6 which the violation is committed, whichever occurs last.
7
8 12. (New section) In any action brought under this act, the State
9 or the person bringing the action shall be required to prove all
10 essential elements of the cause of action, including damages, by a
11 preponderance of the evidence.
12
13 13. (New section) a. There is established in the General Fund the
14 “False Claims Prosecution Fund” as a nonlapsing revolving fund in
15 the Department of the Treasury. Monies deposited in the fund shall
16 be utilized by the Attorney General for the exclusive purpose of
17 investigating and prosecuting false claims. The State Treasurer
18 shall deposit 10% of the proceeds recovered by the Attorney
19 General pursuant to subsection c. of section 7 of
20 P.L. , c. (C. ) (pending before the Legislature as this bill) in
21 the False Claims Prosecution Fund.
22 b. The State Treasurer shall deposit 25% of the State share of
23 monies recovered from actions related to false or fraudulent
24 Medicaid claims brought pursuant to this act in the “Medicaid Fraud
25 Control Fund” established by section 10 of P.L.2007, c.58
26 (C.30:4D-62).
27 c. Except as provided in subsections a. and b. of this section, the
28 State share of moneys recovered by the Attorney General in
29 accordance with the provisions of this act shall be deposited in the
30 General Fund.
31
32 14. (New section) a. If the Attorney General has reason to
33 believe that a person has engaged in, or is engaging in, an act or
34 practice which violates this act, or any other relevant statute or
35 regulation, the Attorney General or the Attorney General's designee
36 may administer oaths and affirmations, and request or compel the
37 attendance of witnesses or the production of documents. The
38 Attorney General may issue, or designate another to issue,
39 subpoenas to compel the attendance of witnesses and the production
40 of books, records, accounts, papers and documents. Witnesses shall
41 be entitled to receive the same fees and mileage as persons
42 summoned to testify in the courts of the State.
43 If a person subpoenaed pursuant to this section shall neglect or
44 refuse to obey the command of the subpoena, a judge of the
45 Superior Court may, on proof by affidavit of service of the
46 subpoena, of payment or tender of the fees required and of refusal
47 or neglect by the person to obey the command of the subpoena,
48 issue a warrant for the arrest of said person to bring that person
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before the judge, who is authorized to p 1 roceed against the person as
2 for a contempt of court.
3 b. If the matter that the Attorney General seeks to obtain by
4 request is located outside the State, the person so required may
5 make it available to the Attorney General or the Attorney General's
6 representative to examine the matter at the place where it is located.
7 The Attorney General may designate representatives, including
8 officials of the state in which the matter is located, to inspect the
9 matter on behalf of the Attorney General, and the Attorney General
10 may respond to similar requests from officials of other states.
11 c. If a licensed professional or an owner, administrator or
12 employee of a licensed professional, including but not limited to an
13 owner, administrator or employee of any hospital, an insurance
14 company, an insurance producer, solicitor or adjuster, or any other
15 person licensed or certified by a licensing authority of this State, or
16 an agent, representative or employee of any of them is found to
17 have violated any provision of this section, the Attorney General
18 shall notify the appropriate licensing authority of the violation so
19 that the licensing authority may take appropriate administrative
20 action.
21 d. State investigators shall not be subject to subpoena in civil
22 actions by any court of this State to testify concerning any matter of
23 which they have knowledge pursuant to a pending false claims
24 investigation by the State, or a pending claim for civil penalties
25 initiated by the State.
26
27 15. (New section) This act shall not be construed as waiving the
28 sovereign immunity of the State and its officers and employees as
29 otherwise provided by law.
30
31 16. Section 17 of P.L.1968, c.413 (C.30:4D-17) is amended to
32 read as follows:
33 17. (a) Any person who willfully obtains benefits under this act
34 to which he is not entitled or in a greater amount than that to which
35 he is entitled and any provider who willfully receives medical
36 assistance payments to which he is not entitled or in a greater
37 amount than that to which he is entitled is guilty of a high
38 misdemeanor and, upon conviction thereof, shall be liable to a
39 penalty of not more than $10,000.00 or to imprisonment for not
40 more than 3 years or both.
41 (b) Any provider, or any person, firm, partnership, corporation or
42 entity, who:
43 (1) Knowingly and willfully makes or causes to be made any
44 false statement or representation of a material fact in any cost study,
45 claim form, or any document necessary to apply for or receive any
46 benefit or payment under this act; or
47 (2) At any time knowingly and willfully makes or causes to be
48 made any false statement, written or oral, of a material fact for use
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in determining rights to such benefit 1 or payment under this act; or
2 (3) Conceals or fails to disclose the occurrence of an event which
3 (i) affects his initial or continued right to any such benefit or
4 payment, or
5 (ii) affects the initial or continued right to any such benefit or
6 payment of any provider or any person, firm, partnership,
7 corporation or other entity in whose behalf he has applied for or is
8 receiving such benefit or payment with an intent to fraudulently
9 secure benefits or payments not authorized under this act or in
10 greater amount than that which is authorized under this act; or
11 (4) Knowingly and willfully converts benefits or payments or
12 any part thereof received for the use and benefit of any provider or
13 any person, firm, partnership, corporation or other entity to a use
14 other than the use and benefit of such provider or such person, firm,
15 partnership, corporation or entity; is guilty of a high misdemeanor
16 and, upon conviction thereof, shall be liable to a penalty of not
17 more than $10,000.00 for the first and each subsequent offense or to
18 imprisonment for not more than three years or both.
19 (c) Any provider, or any person, firm, partnership, corporation or
20 entity who solicits, offers, or receives any kickback, rebate or bribe
21 in connection with:
22 (1) The furnishing of items or services for which payment is or
23 may be made in whole or in part under this act; or
24 (2) The furnishing of items or services whose cost is or may be
25 reported in whole or in part in order to obtain benefits or payments
26 under this act; or
27 (3) The receipt of any benefit or payment under this act, is guilty
28 of a high misdemeanor and, upon conviction thereof, shall be liable
29 to a penalty of not more than $10,000.00 or to imprisonment for not
30 more than 3 years or both.
31 This subsection shall not apply to (A) a discount or other
32 reduction in price under this act if the reduction in price is properly
33 disclosed and appropriately reflected in the costs claimed or charges
34 made under this act; and (B) any amount paid by an employer to an
35 employee who has a bona fide employment relationship with such
36 employer for employment in the provision of covered items or
37 services.
38 (d) Whoever knowingly and willfully makes or causes to be
39 made or induces or seeks to induce the making of any false
40 statement or representation of a material fact with respect to the
41 conditions or operations of any institution or facility in order that
42 such institution or facility may qualify either upon initial
43 certification or recertification as a hospital, skilled nursing facility,
44 intermediate care facility, or health agency, thereby entitling them
45 to receive payments under this act, shall be guilty of a high
46 misdemeanor and shall be liable to a penalty of not more than
47 $3,000.00 or imprisonment for not more than 1 year or both.
48 (e) Any person, firm, corporation, partnership, or other legal
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entity who violates the provisions o 1 f any of the foregoing
2 subsections of this section or any provisions of section 3 of P.L. ,
3 c. (C. ) (pending before the Legislature as this bill), shall, in
4 addition to any other penalties provided by law, be liable to civil
5 penalties of (1) payment of interest on the amount of the excess
6 benefits or payments at the maximum legal rate in effect on the date
7 the payment was made to said person, firm, corporation, partnership
8 or other legal entity for the period from the date upon which
9 payment was made to the date upon which repayment is made to the
10 State, (2) payment of an amount not to exceed three-fold the amount
11 of such excess benefits or payments, and (3) payment in the sum of
12 [$2,000.00] not less than and not more than the civil penalty
13 allowed under the federal False Claims Act (31 U.S.C. s.3729 et
14 seq.), as it may be adjusted for inflation pursuant to the federal
15 Civil Penalties Inflation Adjustment Act of 1990, Pub.L.101-410
16 for each excessive claim for assistance, benefits or payments.
17 (f) Any person, firm, corporation, partnership or other legal
18 entity, other than an individual recipient of medical services
19 reimbursable by the Division of Medical Assistance and Health
20 Services, who, without intent to violate this act, obtains medical
21 assistance or other benefits or payments under this act in excess of
22 the amount to which he is entitled, shall be liable to a civil penalty
23 of payment of interest on the amount of the excess benefits or
24 payments at the maximum legal rate in effect on the date the
25 benefit or payment was made to said person, firm, corporation,
26 partnership, or other legal entity for the period from September 15,
27 1976 or the date upon which payment was made, whichever is later,
28 to the date upon which repayment is made to the State, provided,
29 however, that no such person, firm, corporation, partnership or
30 other legal entity shall be liable to such civil penalty when excess
31 medical assistance or other benefits or payments under this act are
32 obtained by such person, firm, corporation, partnership or other
33 legal entity as a result of error made by the Division of Medical
34 Assistance and Health Services, as determined by said division;
35 provided, further, that if preliminary notification of an overpayment
36 is not given to a provider by the division within 180 days after
37 completion of the field audit as defined by regulation, no interest
38 shall accrue during the period beginning 180 days after completion
39 of the field audit and ending on the date preliminary notification is
40 given to the provider.
41 (g) All interest and civil penalties provided for in this act and all
42 medical assistance and other benefits to which a person, firm,
43 corporation, partnership, or other legal entity was not entitled shall
44 be recovered in an administrative procedure held pursuant to the
45 "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1, et
46 seq.), except that recovery actions against minors or incompetents
47 shall be initiated in a court of competent jurisdiction.
48 (h) Upon the failure of any person, firm, corporation, partnership
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or other legal entity to comply within 10 days 1 after service of any
2 order of the director or his designee directing payment of any
3 amount found to be due pursuant to subsection (g) of this section, or
4 at any time prior to any final agency adjudication not involving a
5 recipient or former recipient of benefits under this act, the director
6 may issue a certificate to the clerk of the superior court that such
7 person, firm, corporation, partnership or other legal entity is
8 indebted to the State for the payment of such amount. A copy of
9 such certificate shall be served upon the person, firm, corporation,
10 partnership or other legal entity against whom the order was
11 entered. Thereupon the clerk shall immediately enter upon his
12 record of docketed judgments the name of the person, firm,
13 corporation, partnership or other legal entity so indebted, and of the
14 State, a designation of the statute under which such amount is found
15 to be due, the amount due, and the date of the certification. Such
16 entry shall have the same force and effect as the entry of a docketed
17 judgment in the Superior Court. Such entry, however, shall be
18 without prejudice to the right of appeal to the Appellate Division of
19 the Superior Court from the final order of the director or his
20 designee.
21 (i) In order to satisfy any recovery claim asserted against a
22 provider under this section, whether or not that claim has been the
23 subject of final agency adjudication, the division or its fiscal agents
24 is authorized to withhold funds otherwise payable under this act to
25 the provider.
26 (j) The Attorney General may, when requested by the
27 commissioner or his agent, apply ex parte to the Superior Court to
28 compel any party to comply forthwith with a subpoena issued under
29 this act. Any party who, having been served with a subpoena issued
30 pursuant to the provisions of this act, fails either to attend any
31 hearing, or to appear or be examined, to answer any question or to
32 produce any books, records, accounts, papers or documents, shall be
33 liable to a penalty of $500.00 for each such failure, to be recovered
34 in the name of the State in a summary civil proceeding to be
35 initiated in the Superior Court. The Attorney General shall
36 prosecute the actions for the recovery of the penalty prescribed in
37 this section when requested to do so by the commissioner or his
38 agent and when, in the judgment of the Attorney General, the facts
39 and law warrant such prosecution. Such failure on the part of the
40 party shall be punishable as contempt of court by the court in the
41 same manner as like failure is punishable in an action pending in
42 the court when the matter is brought before the court by motion
43 filed by the Attorney General and supported by affidavit stating the
44 circumstances.
45 (cf: P.L.1979, c.365, s.16)
46
47 17. (New section) This act shall not abrogate or modify any
48 existing statutory or common law privileges or immunities.
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18. (New section) This act shall be 1 liberally construed to
2 effectuate its remedial and deterrent purposes. If any provision of
3 this act or its application to any particular person or circumstance is
4 held invalid, that provision or its application is severable and does
5 not affect the validity of other provisions or applications of this act.
6
7 19. This act shall take effect on the 60th day after enactment.