Chapter 7. State False Claims Acts

By Katrina A. Pagonis[1] and Bridget Gordon[2]

The federal False Claims Act (FCA) (31 U.S.C. §§ 3729–3733) was enacted in 1863 by Congress to address concerns that suppliers of goods to the Union army during the American Civil War were defrauding the army. The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty of $2,000 for each false claim. Since then, the FCA has been amended several times.

One of the primary purposes of false claims laws is to combat fraud and abuse in government healthcare programs. False claims laws do this by making it possible for the government to bring civil actions to recover damages and penalties when healthcare providers submit false claims. These laws often permit qui tam suits, which are lawsuits brought by whistleblowers known as “relators,” typically employees or former employees of healthcare facilities that submit false claims.

In the wake of the federal FCA, numerous states have also enacted false claims statutes, which often run parallel to the FCA. Since 2005, states have been eligible to receive an additional 10% of a recovery in Medicaid-related false claims actions if, among other things, the state has a false claims act that is deemed by the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) to match or exceed the effectiveness of the federal FCA.[3]

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