We discuss the federal False Claims Act quite a bit in this Milwaukee Employment Law Blog. The False Claims Act allows citizens to file lawsuits on behalf of the government against individuals and organizations that are defrauding the government. The qui tam provision of the False Claims Act allows these whistle-blowers to share in any financial recovery that results from the lawsuit. The False Claims Act is a very important federal statute, and Congress has been pushing states to enact similar state false claims laws, too.
Congress is particularly interested in motivating states to write false claims laws that would help fight Medicaid fraud. In 2005, the federal Deficit Reduction Act allowed states who adopted such laws to receive 10 percent of any settlements resulting from Medicaid fraud cases.
When this incentive became available, 14 states, including Wisconsin, enacted such laws and qualified for it. However, subsequent federal laws strengthened protections for whistle-blowers and in turn the state laws were no longer compliant and the states thus were no longer eligible for the 10 percent bonus.
The states were given a grace period during which they could amend their false claims statutes in order to regain compliance and earn the incentive, but Wisconsin has already missed its deadline to do this. Nine other states will also lose their bonuses unless they pass new legislation prior to August.
While Wisconsin has declined to match its false claims act protections to federal law, this does not mean that Wisconsin residents cannot file false claims act lawsuits. Wisconsin residents can still file these claims under the federal law, and when the government recovers compensation as a result of a claim, the whistle-blower will generally receive a cut.
It is quite difficult to file a whistle-blower claim, and whistle-blowers do face some risks, including retaliation. Those who are considering filing a False Claims Act lawsuit may benefit from legal counsel.
Source: Thomson Reuters News & Insights, “States pressured to match their false claims acts to federal law,” Adam Kerlin, May 24, 2013