Georgia False Claims Act Interview

This is the first part of a series where Tony Munter and Jason Marcus discuss some of the novel and interesting issues regarding the false claims laws in Georgia. In this segment, Jason Marcus explains the False Claims Act in Georgia and how they work.
Click here for Part 2

Tony

I know that Georgia passed a new state false claims act. What happened?

Jason

Well Georgia actually has two false claims acts. One is Medicaid specific and then one that is for everything that’s not Medicaid.

The Medicaid one has been around since 2007, and it pretty much mirrors the federal false claims act. When we file a case if it’s not attached to a federal claim, it is filed in the county where               the case arises. Service is on the Attorney General’s office and then they have a dedicated state Medicaid Fraud Control Unit, which is constantly growing and getting really good.

So it’s handled basically the same as a federal False Claims Act case. But then the newer statute, which was enacted in 2012, is called the Georgia Taxpayer Protection False Claims Act. And              that one’s a little bit weird in both good ways and bad ways.

Tony

Right well just start with the good ways – why is it good?

Jason

Now the flipside of that, kind of the exchange for making it so broad, is that the Attorney General has a lot more control over these cases than a normal false claims act case. So you have to go            through a very specific process to get one of these cases filed. And before you can file the case, you actually have to have the authority of the Attorney General of Georgia to file it. Anything                that you could possibly consider the government, even hospital authorities, it’s all covered under the Act.

And I’m not aware of anywhere in the country that’s as broad as that, that really gets down into specific agencies and anything, county level and local level. So it’s really wonderful, because                it’s intended to encapsulate and incorporate anything that could be considered government money. So if the Attorney General looks at your case and passes on it, and that could be because                maybe he doesn’t believe it or it’s just not good enough or whatever, then they can say no you’re not allowed to file the case and basically your case is over.

There’s nothing you can do from there. I think it’s about as broad of a false claims act as is anywhere in the country, and they specifically framed it to try to encompass every possible type of            government money in existence. That includes school boards, city, state, county, public transit—Atlanta’s public rail system is called MARTA, any sort of misuse of MARTA funds is also                      covered.

 

Tony:

So it’s not a question of waiting until they decline and being able to go forward on your own? You actually need the AG’s flat out permission just to even file it.

Jason:

That’s correct. Yes. You cannot file it at all without permission. It’s a two-step process. First, you have to pass the initial screening of whether you can file it, and then once you file it, it falls into the role of a normal false claims act case where they investigate and decide whether to intervene. But you still must get through that first step.

Tony:

So in your experience what happens?

Jason:

Well, it’s interesting, we’ve had a handful of cases under the new statute and because it’s so new and it’s not anything anyone has ever done before, we’re all still kind of trying to figure it out.

In our experience, if they feel like it’s a legitimate case against a nongovernmental entity, they will probably allow it to be filed. Where you run into some obstacles, for example, may be in cases in which one government agency was getting funds from another government agency and misusing those funds, they don’t want to a suit against themselves.

Tony:

    Well, it’s very difficult to get a successful case involving misuse of government funds as opposed to fraud against the government in a federal case. I mean that doesn’t strike me as all that outside of what we normally think of as liability for fraud against the government —

Jason:

    Right. But I guess where it’s a little different is because it gets down to all these little levels, if you have, for example, a local school board who is receiving grants from the state, you think, okay, they’re fraudulently misusing those grants, then you may feel the state should want to get involved and make sure that the state money that is set aside for a certain purpose is being used for that purpose. At the same time, the School Board is still a government entity, so there may be a little hesitation to let you go after them.

Tony:

    Okay. Okay. But even after you file it you would still have to let them go forward with an investigation and intervention decision? I mean this is just like two steps of this or one or is it one-

Jason:

    Yes.

Tony:

    It’s an additional step.

Jason:

    Right, it is an additional step. The first is just a yes or no screening and then it’s more of the standard investigation to see if is something they want to do. I think because it’s a new office, and they’re still kind of building up their resources, I think they’re a bit quicker to decline and let the private counsel handle these cases.

Tony:

    Uh-hum.

Jason:

    • I don’t mean that in the sense that they’re only looking for the gems. I mean that more in the sense of, for example, our firm handles declined cases routinely and we let them know that upfront and we get responses from them that if we can take the case by ourselves, by all means run with the ball. Go ahead. We’re more than happy to do that. And then we have some cases that are sort of in limbo. Unlike the federal cases, there is no seal extension being checked. It’s sort of normal in a federal case every three months or six months for the government to have to file for an extension and the court reviews it and grants it or does not.

Under this law, there’s not really a time limit on how long these cases are to be investigated. The way the statute is written it very generally suggests that they’re expected to move quickly. But there’s nothing keeping them from holding cases indefinitely.

So we have some cases where if there’s an understanding that they’re waiting to see how some things play out before they’re going to do anything. So that’s another weird hiccup in this statute is that if they don’t want to pursue it they don’t even have to decline it, they can just kind of hang on to it.

Tony:

    Wow. As an administrative issue that’s kind of a problem in that you have to call them every once in a while and remind them that there’s this case out there I guess.

Jason:

    Yes a little, but in the cases where they have done that, they have been upfront with us. They said here is our reason why and we’re going to go ahead with some other things and we’re going to see how this plays out. So on the bright side there’s nothing we can do so we’re not expending resources, but obviously it’s a little frustrating. We hope that things get resolved in our favor.

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