Tony Munter summarizes the Michigan False Claims Act below and compares it to Federal law. He is not licensed in the jurisdiction of Michigan.
As the name implies, Michigan’s Medicaid False Claims Act (Mich. Comp. Laws. Serv. §§400.601 et seq.) is limited to violations that “cause the Department of Community Health to pay out sums of money under the social welfare act,” meaning that it is a Medicaid-only law. It is not possible to use this law to sue for false claims involving any other kind of state funds.
However, unlike the vast majority of state False Claims Acts, the Michigan law specifically includes serious criminal provisions. One such provision includes liability of imprisonment of up to 10 years and a fine of $50,000. For attorneys that are accustomed to practicing in the civil world of Federal False Claims Act law, this is a little stunning to read, although it may not make that much of a difference in practice.
Relation to Federal False Claims Act
The U.S. Department of Justice has made a procedural decision to refer all filed False Claims Act cases to its criminal division for review, so of course the Department can act upon facts presented to it that create criminal liability. However, there is nothing comparable in the Federal False Claims Act itself to the criminal liability established under the Michigan False Claims Act.
To hold a defendant liable under federal criminal law for allegations brought under the Federal False Claims Act by a relator, the Department of Justice has to use the information in conjunction with authority granted in other laws. The Department certainly can—and has—done that in the past, but there is nothing directly in the Federal False Claims Act that makes it a criminal act, as opposed to civil statute.
Penalties Created by Michigan False Claims Act
The Michigan False Claims Act also incorporates various legal theories which appear in the Federal Anti-Kickback statute. The Federal Anti-Kickback Statute, while creating false claims act liability, is also a criminal statute.
The Michigan Medicaid False Claims Act again creates a criminal violation punishable by imprisonment for not more than four years or a fine of not more than $30,000, or both for kickbacks involved in a scheme to defraud the state of Medicaid funds. This provision is important in that it clearly provides additional authority to extend the kind of liability generally associated with kickback violations to federal healthcare programs to Michigan State Medicaid funds.
The civil provisions of the Michigan law generally mirror those of the Federal False Claims Act. For example, the Michigan law provides the possibility of a relator obtaining a reward of between 15 to 25 percent for a case, in which the government intervenes, and from 25 to 30 percent for a case in which the government does not, just as in the Federal Law.
The triple damages provision in the Michigan law also reflects the federal standard but appears to also go one step further, stating that a person who receives a benefit through fraud shall forfeit that amount and pay the full amount received, plus triple the amount of damages suffered by the state and additional civil fines. Furthermore, there are anti-retaliation provisions which provide similar relief under the Michigan law as to the Federal law.
A minor difference between the law is that the initial seal period of 60 days under the Federal law is set for 90 days in Michigan.