Indiana False Claims Act

On this page, Tony summarizes the Indiana False Claims Act. Tony Munter is not an Indiana False Claims Act lawyer. He is not licensed to practice in Indiana.

Enacted in 2005, the Indiana False Claims Act is a particularly strong False Claims Act.  That is because the Indiana law offers a strong and expansive definition of a claim. Ind. Code §§5-11-5.5 et seq does not limit liability for actions regarding Medicaid funding, as several other state False Claims Acts do. Rather, in Indiana any kind of fraud which impacts Indiana state funds is the proper subject of an action under this law.

Indiana FCA is Similar to Federal FCA

The Indiana law is similar to federal FCA law in most important respects. Defendants face liability for triple damages and civil fines, as is the case in the federal False Claims Act. Procedurally the Indiana law provides concurrent jurisdiction to the Indiana Attorney General and the Indiana Inspector General to investigate these claims. There are a few differences which probably don’t make a huge difference; for example, the Indiana Law has an initial seal period of 120 days as opposed to the federal law, which has an initial seal period of 60 days. Since both statutes allow for an extension of the seal based upon a showing of good cause, the amount of time a case may be kept under seal could be much more than either of those periods of time.

Liability in Indiana FCA Cases

Liability for false claims under this law appears to be limited solely to cases involving Indiana state funds. A few states fall into this category of False Claims Acts. They do not afford the local communities or the cities a chance to recover funds or have plaintiffs sue on behalf of funds lost to fraud by cities and towns within their jurisdiction. While it is always possible for an individual city or town to have its own false claims act, the practical difficulties of pursuing matters on a town-by-town basis make it difficult to know how to proceed.  Having said that this law is relatively strong and affords Indiana ample opportunity to participate in nationwide prosecutions of Medicare or Medicaid cases as well as to let citizens bring cases involving fraud against the state itself.

The Indiana Attorney General’s office provides helpful information about the federal and state law and certainly takes an encouraging public posture towards whistleblowers. The state’s website states:

“Medicaid fraud can be exposed and stopped if employees are willing to step forward and report it to the authorities. Becoming a whistleblower to help combat fraud takes courage. Workers who know about fraud might be understandably reluctant to report it out of fear of job retaliation, long-term financial consequences or difficulty in finding new employment elsewhere.”

“Fortunately, the law is on the whistleblower’s side.”

It is a hopeful thing to see an Attorney General’s office both encouraging whistleblowers and citing the law to support whistleblowers. We don’t see enough of that throughout the country. The website says whistleblowers can expect rewards of 10 percent to 30 percent. I’m not here to pick a fight with the Attorney General, but I think that is a conservative estimate of what is contained in the law.  The law generally provides for a minimum of 15 percent in an action intervened by the Attorney General or Inspector General, and a maximum of 30 percent if not intervened, which is similar to federal law.

Those amounts can be reduced to “not more than 10 percent” under some pretty specific circumstances:

If the attorney general or the inspector general intervened in the action and the court finds that the evidence used to prosecute the action consisted primarily of specific information contained in: (A) a transcript of a criminal, a civil, or an administrative hearing; (B) a legislative, an administrative, or another public report, hearing, audit, or investigation; or (C) a news media report; the person is entitled to receive not more than ten percent (10%) of the proceeds of the action or settlement, plus reasonable attorney’s fees and an amount to cover the expenses and costs of bringing the action.

See IC 5-11-5.5-6.

This adds to procedures and requirements generally addressed under the federal law as part of what is called the “public disclosure bar.”  The federal law was amended to allow the Attorney General to effectively waive the public disclosure bar and both laws include provisions for what is called an “original source” under the federal law. If a case survives that analysis, either as not including a public disclosure in the first place or it is brought by an original source, under the federal law the whistleblower is entitled to the rewards.

The Indiana law has slightly different wording and criteria and does seem to allow the judge presiding over the matter to make a determination to reduce the whistleblower’s reward on the basis of relying on public information. We will all just have to watch and see how this plays out in Indiana cases in the future.

Having said all that, the Indiana law appears to reward whistleblowers virtually the same way as the federal law, with 15 percent to 30 percent of a successful case’s outcome. We’ll be watching to see how things play out under this relatively new law.

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