The Federal False Claims Act is by far the most successful law enacted by Congress to fight fraud in the history of the United States. Since the modern version of the Act was created by the 1986 Amendments, the federal government has recovered tens of billions of dollars from businesses and groups accused of defrauding the government in FCA cases.
As a result, the concept of empowering whistleblowers to fight fraud has begun to spread throughout the United States. Indeed, some 29 states, plus the District of Columbia now have False Claims Acts. There are even a few municipalities and some counties which have enacted similar legislation. All of these draw upon the basic principles of the federal False Claims Act, but there are quirks and special procedures to consider when filing a case in any state or local jurisdiction. In light of that, we’ve compiled a state-by-state guide to state False Claims Act and how they differ from one another.
How Local Laws Impact a Case
Depending on the type of qui tam case, local laws may have an impact. For example, if a healthcare provider is not licensed by an appropriate state agency and therefore operating illegally, or if state laws require a certain kind of healthcare provider to provide a service, that could potentially be the basis of a False Claims Act case.
When they bill Medicare, it implies that some level of the regulations of the state licensing apparatus is fulfilled. If the state says, “Only this level of healthcare provider can prescribe this drug,” and it turns out they know they were being prescribed by somebody else entirely, that could be the basis of a False Claims Act case.
State law does have a role to play even with respect to federal claims. Having said that, there are also many state False Claims Acts. Those laws are to protect the interest of the state government, and in some cases local government.
State False Claims Acts and Health Care Fraud
Many of the state laws only cover cases regarding healthcare or Medicaid fraud, though some states encourage whistleblowers to file cases regarding any kind of fraud committed against the state. Some states even allow a plaintiff to file a case when a “political subdivision”—such as a city or town within the state—has been defrauded, but others do not. Figuring out what kind of fraud and what governmental entity has been defrauded is an important step to determining exactly what kind of case may work under a specific state’s false claims legislation.
Anti-Retaliation Provisions and State False Claims Acts
Virtually every state law also includes an anti-retaliation provision modeled on the federal law. The Federal False Claims Act gives the whistleblower the right to sue if reporting or fighting fraud the defendant committed against the government also led to retaliation taken against the whistleblower.
Similar to the federal law, prior to filing a state case, the plaintiff will usually want to notify the state in order to preserve their status as an original source. The case should then be filed in court “under seal,” and then the plaintiff must formally serve the state government with the complaint and the supporting evidence.
DC & State FCA Laws May Vary
Of course, the rules that address filing a sealed case in state courts vary from state to state, just as they do among the federal district courts. However, these procedures are not always a burden.
For example, Washington, DC’s False Claims Act has been interpreted to support the proposition that a plaintiff filing a case under that law does so on behalf of the District of Columbia. The Clerk, therefore, has been known to waive the filing fee in such cases.
That being said, each state court will view such procedural requirements differently, so please don’t assume or count on being able to file a case without paying a filing fee. In federal district court, the fee is currently about $400.
Consolidated False Claims Filings
If a case involves a nationwide fraud scheme, and the state law claims involve transactions and events which are the same or similar to those which violate the federal law, it may be possible to file a consolidated action in federal court. That action will cover both state and federal law claims. See the Federal False Claims Act at 31 U.S.C. Section 3732.
Filing a consolidated case still requires adherence to the state law provisions. This means a claimant generally should inform the state(s) of the allegations prior to filing a case in court to qualify as an original source and the claimant must formally serve the state(s) the sealed complaint with supporting evidence.
State by State Guide
It’s important to keep in mind that the information posted here is only a guide to major provisions of the state laws. Each state may be in the process of changing its law at any given moment. Furthermore, each state will have its own civil procedure and case law, which could impact any individual case.
As always, this is not legal advice but simply information intended to help potential whistleblowers and those interested in FCA matters and qui tam law gain a better understanding of the subject. Anybody considering filing a federal or state false claims act case should consult with dedicated legal counsel to discuss these and other issues related to any potential claim or filing.
The following states have False Claims Act laws which allow an individual to sue on behalf of that state and, if successful, obtain a share of any recovery the state may collect.
Under the California False Claims Act, the defendant is liable for any false claim when California or a political subdivision provides any portion of the funds. “Political subdivision” is defined in the Act to include “any city, city and county, county tax or assessment district or other legally authorized local entity with jurisdictional boundaries.”
The Colorado Medicaid False Claims Act, Colo. Rev. Stat. §§25.4-4-303.4 et seq.
As the name implies, Colorado’s Law is a “Medicaid Only” False Claims Act. This means that an individual can sue only for false claims when Colorado’s Medicaid program has been defrauded, not for more general kinds of fraud.
The Connecticut False Claims Act, Conn. Gen. Stat. §§17b-301a–17b-301p (2010 Supplement)
This law protects Connecticut’s medical assistance programs. The law’s language is somewhat broad, allowing fraud claims for more than just Medicaid, but the effect is essentially the same. General fraud committed against the State of Connecticut is not the subject of an action under this law.
The Delaware False Claims and Reporting Act, Section 1201(a) of the Delaware False Claims and Reporting Act, Del. Code Ann. tit. 6, §§ 1201 et seq.
Under the Delaware False Claims and Reporting Act, the defendant is liable for any false claims when the Government of Delaware provides any portion of the funds. “Government” is defined under the law to include all departments, boards or commissions of the executive branch of the State, and all political subdivisions.
The District of Columbia False Claims Act, DC Code §§ 2-381.01 et seq.
The District of Columbia does not really have a “political subdivision,” so that term is not found in its False Claims Act. Otherwise, the law provides an opportunity for a whistleblower to file a suit regarding virtually any kind of false claim made against the District of Columbia.
Florida False Claims Act, Fla. Stat. Ann. §§68.081 et seq.
While the Florida False Claims Act does allow for virtually any kind of false claim made against the State of Florida to be the subject of a suit, it is a little restrictive. There is no provision allowing for a case to be filed under this law for damages to a political subdivision. Florida funds must in some way be the subject of fraud under the Florida False Claims Act.
The Georgia False Medicaid Claims Act, Ga. Code Ann. § 49-4-168 et seq.
Under this law, only claims regarding Medicaid Fraud are the proper subject of a suit.
Hawaii False Claims Act, Haw. Rev. Stat. Ann. §§661-21 et seq.
Under this law, any kind of fraud which has been perpetrated against the State of Hawaii is the proper subject of a suit. As to political subdivisions, Hawaii has an additional law allowing plaintiffs to bring cases in each of Hawaii’s counties for fraud committed against those counties.
Illinois False Claims Act, 740 Ill. Comp. Stat. Ann. 175/1 et seq.
Under the Illinois False Claims Act, the defendant is liable for any false claim when the State provides any portion of the funds. “State” is defined to mean the State of Illinois and any agency of state government, the system of state colleges and universities, any school district, community college district, county, municipality, municipal corporation, unit of local government, and any combination of the above under an intergovernmental agreement that includes provisions for a governing body of the agency created by the government. Chicago has also enacted its own False Claims Act.
The Indiana False Claims Act and Whistleblower Protection Act, Ind. Code §§5-11-5.5 et seq.
The State of Indiana’s law is similar to Florida’s. Virtually any kind of false claim made against the state is the proper subject of this act.
However, only programs using Indiana State Funds, which have been defrauded, are the proper subjects of a suit. There is no basis for a case if a city or a town within Indiana using only its own funds has been defrauded under this law.
Iowa False Claims Act, Iowa Code §685.1 et seq.
The Iowa False Claims Act allows for a case regarding virtually any kind of fraud committed against the State. However, there is no provision allowing for funds from a political subdivision to be the subject of a case.
Louisiana Medical Assistance Program Integrity Law, La. Rev. Stat. Ann. §§6:438.1 et seq.
This is a False Claims Act for medical assistance programs only.
The Maryland False Health Claims Act, Md. Code Ann. Health-Gen.§§2‑601 et seq.
This is a medical health plan False Claims Act only.
The Massachusetts False Claims Act, Mass. Ann. Laws ch. 12, §§5 et seq.
Under the Massachusetts False Claims Act, the defendant is liable for any kind of false claim if the Commonwealth of Massachusetts or its “political subdivisions” provides any portion of the funds. The term “Political subdivision” is defined to include any city, town, county or other governmental entity authorized or created by state law, including public corporations and authorities.
The Michigan Medicaid False Claims Act, Mich. Comp. Laws. Serv.§§400.601 et seq.
This law only allows for cases regarding fraud committed against the Michigan Department of Community Health.
The Minnesota False Claims Act, Minn. Stat. §§15C.01 et seq.
Under the Minnesota False Claims Act, the Defendant is liable for any false claims if the State of Minnesota or any political subdivision provides any portion of the funds.
The Montana False Claims Act, Mont. Code Ann. §§17-8-401 et seq.
Under the Montana False Claims Act, the Defendant is liable for any false claim if any Montana governmental entity provides a portion of the funds. “Governmental entity” is defined to mean the state, any city, town, county school district, tax or assessment district, or other political subdivision of the state, or a unit of the Montana university system.
The Nevada Submission of False Claims to State or Local Government Act, Nev. Rev. Stat. Ann. §§357.010 et seq.
Under the Nevada Submission of False Claims to State or Local Government Act, the defendant is liable for false claims if the State of Nevada or a political subdivision provided any portion of the funds. “Political subdivision” is defined to mean a county, city, assessment district, or any other local government under NRS §354.474.
The New Hampshire False Claims Act, N.H. Rev. Stat. Ann. §§167:61-b et seq.
This is a Medicaid-only statute with additional restrictions. The law restricts the right of an individual to file a case unless the defendant has its principal place of business within New Hampshire or collects at least ten percent (10%) of all its aggregate Medicaid funds in the preceding year from New Hampshire.
The New Jersey False Claims Act, N.J. Stat. Ann. §§ 2A:32C-1 et seq.
Under the New Jersey False Claims Act, the defendant is liable for any false claims made if the “state” provided any of the funds. “State” is defined to mean any of the principal departments in the Executive Branch of State Government; any division, board, bureau, office, commission or other instrumentality within or created by such department; and any independent state authority, commission, instrumentality or agency.
The New Mexico Medicaid False Claims Act, N.M. Stat. Ann. §§27-14-1 et seq., and The New Mexico Fraud Against Taxpayers Act, N.M. Stat. Ann. §§44-9-1 et seq.
Under these laws, the defendant is liable for any false claims made involving the State of New Mexico’s Medicaid program, and other false claims when the state provides any portion of the funds. “State” is defined to mean the State of New Mexico or any of its branches, agencies, departments, boards, commissions, officers, institutions or instrumentalities, including the New Mexico finance authority, New Mexico Mortgage finance authority, and New Mexico lottery authority.
The New York False Claims Act. N.Y. State Fin. Law §§188 et seq.
Under the New York False Claims Act, the defendant is liable for any false claim made if the State of New York or “local government” provides any portion of the funds. “Local government” is defined to include any New York county, city, town, village, school district, board of cooperative educational services, local public benefit corporation or other municipal corporation, or political subdivision of the state or of such local government. New York City also has its own False Claims Act.
The North Carolina False Claims Act, N.C. Gen. Stat. §§1-605 et seq.
Under the North Carolina False Claims Act, a case can be filed regarding any false claim if the state provides any portion of the funds. However, there is no provision for a political subdivision’s funds being the proper basis of a suit.
The Oklahoma Medicaid False Claims Act, Okla. Stat. tit. 63, §§5053 et seq.
Oklahoma has a Medicaid-only law.
The Rhode Island False Claims Act, R.I. Gen. Laws §§9-1.1-1 et seq.
Under the Rhode Island False Claims Act, the defendant is liable for any false claim when the state provides any portion of the funds. “State” is defined under the law to mean any agency of state government and any political subdivision, meaning any city, town, county, or other governmental entity authorized or created by state law, including public corporations and authorities.
Tennessee False Claims Act, T.C.A §§ 4-18-101 et seq., and the Tennessee Medicaid False Claims Act, T.C.A. §§ 71-5-181 et seq.
Under these laws, the defendant is liable for any false claim if the State of Tennessee or a political subdivision of the State of Tennessee provided any portion of the funds.
The Texas Medicaid Fraud Prevention Act, Tex. Hum. Res. Code Ann.§§36.001 et seq.
Texas has a Medicaid-only Law. The statute has specific language in the law prohibiting kickbacks in Medicaid, which is worth noting.
Virginia Fraud Against Taxpayers Act, Va. Code Ann. §§8.01-216.1 et seq.
Under the Virginia Fraud Against Taxpayers Act, the Defendant is liable for any false claim if the Commonwealth has provided any portion of the money. “Commonwealth” is defined under the law to means the Commonwealth of Virginia, any agency of state government, and any political subdivision. Virginia also has an unusual provision setting forth specific requirements for an employee of Virginia to be a plaintiff under the law.
The Washington Medicaid Fraud Act, RCW 74.66.005 et seq.
Washington has a Medicaid-only false claims law.