Tennessee False Claims Act Laws

Tony Munter summarizes the Tennessee False Claims Act below and compares it to Federal law. He is not licensed  in the jurisdiction of Tennessee.

Tennessee has two False Claims Act Laws – the Tennessee False Claims Act 465 Tenn. Code Ann. §§4-18-101 et seq. (2012) and the Tennessee Medicaid False Claims Act. 466 Tenn. Code Ann. §§71-5-181 et seq. Together these laws create some of the strongest False Claims Act legislation of any state in the country.

The Tennessee False Claims Act is specifically for all kinds of cases besides those involving Medicaid funds. This is clearly a law designed to provide incentives both to the individuals who may report a case of fraud and even to the government agencies who take up the case.

False Claims Against the State

It includes liability for false claims made against the State, as well as all political Subdivisions of Tennessee. The subdivisions are defined to include any city town, municipality, county or other legally authorized local jurisdiction.

This law provides a higher share of a successful case for the individual Relator than both the Federal False Claims Act and the Tennessee Medicaid False Claims Act.

Under the Tennessee False Claims Act the individual who files a case may receive from 25% to 33% for an intervened case, and if the individual proceeds on his or her own then the share is from 35% to 50% of the recovery. Obviously a 50% Relator’s share is an incentive to pursue a case. However, this law creates incentives for the government agencies to pursue the case as well.

The Tennessee False Claims Act has a specific incentive for the Attorney General and for the equivalent prosecuting authority from a political subdivision to pursue such claims. Such agencies are to receive 33% of the recovery to put towards fighting fraud within their offices as opposed to the entire amount being returned to the state treasury.

This law provides the same kind of liability for false claims as under the federal law with the addition of a provision which creates liability for “inadvertent false claims” when someone is the beneficiary of such a claim and fails to report it within a “reasonable” period of time.

The Two False Claims Acts in Tennessee

The Tennessee False Claims Act includes the sensible provision, which limits cases to amount in controversy of at least $500.

The law also includes a provision, which allows for a state employee to file a case, but only if that employee first in good faith exhausted internal procedures for reporting and seeking claimed funds through official channels and the state or political subdivision failed to act. While it allows state employees to recover rewards, it makes such awards optional under the act.

The Tennessee Medicaid False Claims Act provides similar liability for claims as under the Federal False Claims Act including treble damages for violations. However, the Tennessee Medicaid False Claims Act includes a higher civil fine of from $5,000-$25,000.

The share of the proceeds a successful relator can claim under this law is in line with federal standards of 15% to 25% for an intervened case and from 25% to 30% for a non-intervened case.  It is a relatively standard False Claims Law applicable only to Medicaid funds.

The two laws working together meet or exceed virtually every analogous provision of the Federal False Claims Act.

State Disclaimer