June 3, 2013 — The Federal False Claims Act makes government contractors liable when they submit false claims for reimbursement to the federal government. The cost for violators is steep — as much as $11,000 per false claim along with three times the government’s actual loss. The False Claims Act is so effective because of brave insider informants who choose to collaborate with the Justice Department in fighting fraudulent activity. The whistleblower language in the Act authorizes “relators” to initiate lawsuits against companies engaged in fraud against the government. Should the government recover anything as a result of the suit, the informant may receive up to 30 percent of that amount, depending on a variety of factors.
Expanded Minnesota False Claims Act to Maximize Medicaid Recoveries
In April, the Minnesota Legislature amended the Minnesota False Claims Act (Minn. Stat. § 15C.01, et seq.) to broaden its scope and offer greater incentives for qui tam lawsuits by whistleblowers. The new statute goes into effect in August 2013, Lexology reports.
The new statute includes the following changes:
- It covers false claims submitted to a state or local government and also to government intermediaries, such as prime government contractors that dispense funds in furtherance of government programs.
- The statute makes employers liable for the misconduct of non-managerial employees, regardless of whether they knew about the misconduct or ratified it.
- The amended statute gives more protection to whistleblowers whose employers subject them to retaliation for their lawful efforts to notify the government of False Claims Act violations.
- The Act requires an award of costs and attorneys’ fees to successful plaintiffs.
- Qui tam whistleblowers receive a bigger percentage of the government’s recovery even if the government intervenes early in the lawsuit.
Minnesota will now be eligible to receive a larger share of any recovery in broader Medicaid fraud actions where the recovery is split among the federal government and the 50 states. The federal Deficit Reduction Act of 2005 (DRA) gave states an incentive to enact or beef up state false claims legislation by awarding the states an added ten percent recovery in Medicaid cases, so long as they have a state false claims act with provisions at least as broad as the federal statute and as favorable to private qui tam suits by whistleblowers.
Company Insiders Make the Most Likely Whistleblowers
Like Minnesota, many states have their own False Claims Act statutes that parallel the provisions of the federal Act. Private False Claims Act lawsuits are frequently filed by insider employees who are outraged by schemes to defraud the federal or state governments. These courageous citizens have rights to protect them under the False Claims Act. The qui tam lawyers at Waters & Kraus have experience in safeguarding tipsters’ interests. Contact us by email or phone our whistleblower attorneys across the country at 855.784.0268 to learn more about how we can assist you.