The wave of new State False Claims Acts has generated a flurry of letters from the Office of Inspector General of HHS this past week. OIG has now “approved” the new State False Claims Acts of California, Georgia, Indiana, and Rhode Island, but has “disapproved” those of six other states: Florida, Louisiana, Michigan, New Hampshire, New Mexico, and Oklahoma.
As this whistleblower lawyer blog has written about extensively, Congress has created financial incentives for states to enact their own versions of the highly successful qui tam whistleblower law, the False Claims Act, which is the government’s primary tool for combating fraud directed at taxpayer funds.
Under the Deficit Reduction Act of 2005, each state that has a False Claims Act that is at least as effective in facilitating and rewarding qui tam actions as the Federal False Claims Act in protecting state Medicaid funds is entitled to a greater share of fraud recoveries from those actions.
OIG must “approve” the state’s whistleblower law for the state to be eligible for the additional funds. In effect, states may enact laws with stronger or more effective provisions than the federal False Claims Act, but cannot enact a “weaker” or less effective version of the False Claims Act and still receive the increased funds.
Fortunately, these problems are easily corrected. OIG has now informed these states precisely how their statutes should be amended to entitle them to receive the additional share of fraud recoveries.