California Strengthens State False Claims Act

February 28, 2013 — California’s False Claims Act recently became stronger when Governor Jerry Brown signed important amendments into law. Patterned after the federal False Claims Act, the California False Claims Act contains qui tam provisions that make it possible for a private individual with knowledge of fraud against the state government to file a whistleblower lawsuit under the Act. If the suit is successful, the informant is entitled to keep a portion of the government’s recovery. Tipsters who file suit on the government’s behalf are referred to as whistleblowers, relators or qui tam plaintiffs.

California’s statute was originally enacted in 1987. The recent amendments to California’s statute became effective January 1, 2013. See California Assembly Bill 2492; Cal. Gov’t Code §§ 12650-56. The changes keep the California statute in close alignment with its federal counterpart.

The recent amendments restore important liability provisions and bolster anti-retaliation provisions for whistleblowers. Any entity that wrongfully holds onto an overpayment of state government funds is now liable under the Act. This would include health care providers that file false claims that are then reimbursed by Medi-Cal, California’s state healthcare program. In addition, the revisions would hold a company liable for terminating a contract or agreement because a contractor or a consultant notifies the state government upon learning that the company is engaged in illegal conduct.

Medi-Cal Fraud Frequently Reported by Insider Employees

Health care providers that overbill Medi-Cal or bill the state program for unnecessary or nonexistent medical procedures drive up the state’s health care costs. Employee insiders are often in the best position to notify the state government about Medi-Cal fraud. Health care workers are likely to know when procedures are not reimbursable by Medi-Cal. Some health care providers even pressure their employees to take part in the fraud.

Before contacting the government, collaborators need to be informed of their legal rights. The California attorneys at Waters & Kraus provide informants with the representation they need to step forward. Contact us or call our whistleblower lawyers at 800.226.9880 to find out more about the revised California False Claims Act and how we can help.