Maryland False Claims Act

Tony Munter is not a Maryland False Claims Act lawyer. He summarizes the Maryland False Claims Act statutes on this page, but he is not licensed to practice in Maryland.

Md. code Ann. Health-Gen. §§ 2-601 et seq.

As the title of the law implies, Maryland’s False Health Claims Act is limited to claims regarding state health programs. The limited scope of the law stands in contrast to the Federal False Claims Act and several other state FCA laws, which create liability for a defendant that commits fraud whenever government funding is involved.

However, the Maryland law does provide the state with a legal way to join in nationwide cases of health care fraud.  Since those claims are generally the most frequent and involve the largest cases, it makes sense for every state to at least take the step that Maryland has taken. It’s hard to understand why a state would not enact such a law. Of course, every state has a special interest in being sure there is a way to fight fraud related to health care since there is often an impact on the care of citizens as well as the government’s funds.

Maryland FCA and Health Care Fraud

Even though this law is relatively narrow in scope compared to other false claims acts we should put that definition of “narrow” in perspective.  Upon releasing the 2014 State Budget, the Gov. Martin O’Malley stated:

To date, the O’Malley-Brown Administration has expanded health care to over 367,000 Marylanders – the Governor’s FY 2014 budget will expand health care to even more families.

You can find a copy of the budget here.

Clearly there are many institutions, which would be subject to this law if they defraud Maryland of health care related funds.

Maryland FCA Provisions

The Maryland law includes at least one unusual provision. It is not what we have come to expect from what is usually called qui tam law.  The term qui tam meaning “who as well” is short for a longer Latin phrase meaning “he who will sue on behalf of himself as well as the king.” In the False Claims context lawyers tend to refer to qui tam to describe the provisions of these laws that allow individuals to sue on behalf of the government.

Maryland’s law does allow an individual to sue on behalf of the State of Maryland.  However, if the state decides not to join the action the case is to be dismissed.  The Federal Law allows the government to join the action, but if the government declines to do so a litigant may continue to pursue the case in court without the support of the government.

This provision gives the Attorney General within the state of Maryland, considerable power to control the fate of the case, even more than the government has under the federal law. There are other whistleblower reward laws, which follow this same idea. For example the whistleblower offices created by the Dodd-Frank Legislative reforms allow a whistleblower to provide information to an agency but not to maintain an action in court on behalf of the government.  The Whistleblower can receive a reward if for example the Securities and Exchange Commission (SEC) pursues the case, but cannot sue on behalf of the SEC.

Maryland FCA Rewards and Liability

Maryland’s whistleblower rewards track with the Federal Law’s provisions for rewards when the government “joins” the action.  The government’s decision to join the case means that it will take over prosecution. Both the federal False Claims Act and the Maryland Law provide for a reward of 15 percent to 25 percent of any recovery under those circumstances.

Since there is no opportunity to pursue the case without the state joining there is no higher reward under the Maryland law as there is under the Federal Law.  By contract under the federal law, if a whistleblower pursues a case without the government’s help and prevails the individual can earn a reward of between 25 percent and 30 percent of the total recovery.

Liability for the defendant is similar to the federal law. There are treble, or triple, the damages and civil fines for violations of the Maryland False Health Claims Act.

Maryland FCA and Federal FCA Laws

Maryland, like the other states with a False Claims Acts — and even those that have liability only for health care claims — is in a strong position to be rewarded by cases filed alleging a nationwide scheme.  Under the federal law, such cases can be filed as one action if there is a common core of facts giving rise to the scheme.

The Maryland law is still relatively new and we will continue to watch to see how many cases are filed and what kind of success they have under the Maryland False Health Claims Act.  Under the federal law, cases can take several years to come to fruition.  Individuals in Maryland may only now be learning about and thinking of availing themselves of the rights provided by this law.  Hopefully, if there is fraud committed in the State of Maryland, and it impacts state health care funds, whistleblowers will understand that this law provides an option to them.

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