Texas False Claims Act

Tony Munter summarizes the Texas False Claims Acts below. He does not practice in the jurisdiction of Texas. The summaries of other states can be found in our state by state guide page.

Texas laws provide for penalties and damages when defrauding the state of health care funds only. Unfortunately, there is still no right to pursue a claim, which is not related to health care.

Similar to other states with this kind of legal structure, Texas Claims can be brought as part of a consolidated action under the Federal False Claims Act if there are claims involving Texas funds, which arise out of a common nucleus of facts or transactions.

The laws are codified within the Texas Human Resources Code and Government Code and include the Medical Assistance Program Damages and Penalties, the Medicaid Fraud Prevention (including actions by Private Persons) and the Award for reporting Medicaid Fraud, Abuse or Overcharges.

Texas does allow for individuals to file a claim when there is a health care related fraud committed in the State of Texas using Texas money under the Medicaid Fraud Prevention Act.

Texas law leaves no room for doubt that it does not allow for kickbacks or bribes in State healthcare plans. The State codifies language similar to the Federal Anti-Kickback Statute indicating that a violation is committed if a person “solicits or receives” any such illegal remuneration and makes clear what is illegal and how such remuneration may not be used as an inducement.

Civil fines are issued in a bit of an unusual manner. Violations which result in injury to an elderly person or disabled person or a child carry heightened fine provisions of $5,000 to $15,000 as opposed to the federal law (although the Federal law’s fines are being raised as a result of inflation.)

One detail of these laws is that Texas specifically makes it a false claim to knowingly present or cause to be presented a claim for payment under the Medicaid program for a product provided or a service rendered by a person who “is not licensed to provide the product or service…or is not licensed in the manner claimed…” See §36.002.6(A) and (B).

One might think that to be an obvious violation of law that need not be spelled out, but a great deal of litigation on the Federal level has revolved around what licensing or lack thereof creates a false claim to the United States. It is good to see this specifically spelled out in Texas law.

The qui tam rights are similar to the Federal Law and the resulting Relator’s shares are 15 percent to 25 percent awarded if the State intervenes in the Action and 25 percent to 30 percent if the State does not and the Relator proceeds and obtains an award. Of course, Texas also includes anti-retaliation provisions.

Meanwhile, in another unusual provision, the State codifies its right to appoint a Private Attorney to proceed with an action if it decides to intervene in the case. This is a sensible provision which really ought to be spread to other jurisdictions.

State’s Attorney Generals might well intervene in and support more cases if they did not have to burden the office directly with the work involved in maintaining such litigation.

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