The wave of new state False Claims Acts with qui tam whistleblower provisions has been a frequent topic of this whistleblower lawyer blog. In 2007, New York, Georgia, and Oklahoma joined the 16 other states that have enacted versions of the federal False Claims Act, the government’s primary weapon for fighting fraud against taxpayers.
Today, New Jersey’s Assembly unanimously passed the New Jersey State False Claims Act, which upon signature by the Governor will make New Jersey the 20th state to have a state version of the venerable qui tam whistleblower statute.
We congratulate New Jersey for taking the prudent action of passing a state False Claims Act. As we have written about extensively, Congress through the Deficit Reduction Act of 2005 has created financial incentives for states that pass such qui tam whistleblower laws that are at least as effective as the federal False Claims Act.
The New Jersey False Claims Act expands on the federal Act. It also includes criminal provisions as well as civil liability for treble damages and civil penalties. The text of the Act passed today is reprinted below:
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 ACS for A3428 CONAWAY, GREENWALD 3 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 ACS for A3428 CONAWAY, GREENWALD 4 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.
ACS for A3428 CONAWAY, GREENWALD 5 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 ACS for A3428 CONAWAY, GREENWALD 6 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 ACS for A3428 CONAWAY, GREENWALD 7 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 ACS for A3428 CONAWAY, GREENWALD 8 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 ACS for A3428 CONAWAY, GREENWALD 9 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 ACS for A3428 CONAWAY, GREENWALD 10 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 ACS for A3428 CONAWAY, GREENWALD 11 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 ACS for A3428 CONAWAY, GREENWALD 12 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 ACS for A3428 CONAWAY, GREENWALD 13 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 ACS for A3428 CONAWAY, GREENWALD 14 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.
ACS for A3428 CONAWAY, GREENWALD 15 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.