Since then, I have had many calls from attorneys about the new state False Claims Act, which includes qui tam provisions allowing whistleblowers to file suit and share in the recovery. Thus, I am summarizing here some major points about the law:

The Georgia Taxpayer Protection False Claims Act is a state version of the extremely successful federal False Claims Act (FCA). The FCA is the federal government’s primary civil tool for combating fraud directed at taxpayer funds. The majority of states already have such a law designed to stop and deter fraud against state government.

Background: The FCA originally was enacted during the Civil War. In 1986, President Ronald Reagan signed into law an amended version of the FCA, which has since generated more than $30 billion in recoveries from those who have defrauded the government. The FCA also helps deter fraud by those who do business with the government.

State False Claims Acts: As noted, based on the federal FCA’s great successes since 1986, Sen. Charles Grassley has helped lead efforts to encourage states to pass their own versions of the FCA. Congress established financial incentives for states that enact their own versions of the FCA that closely follow the FCA’s terms, through the Deficit Reduction Act of 2005. (Those states receive an extra 10% of Medicaid fraud recoveries.) Congress amended the federal FCA in 2009-2010 to increase the FCA’s effectiveness.

At least twenty-eight other states now have enacted their own False Claims Acts, which are also based on the federal FCA. The majority of these states’ laws protect all state spending of any nature.

On May 24, 2007, Georgia’s “State False Medicaid Claims Act” became law. It is based on the 2007 federal FCA, but protects only Medicaid spending. The new 2012 Georgia Taxpayer Protection False Claims Act now protects all state and local government spending.

In sum, the new Georgia Taxpayer Protection False Claims Act (1) protects all state and local government spending from fraud, and not simply Medicaid spending; and (2) amends the State False Medicaid Claims Act to conform to the 2009-2010 federal FCA amendments. All states are required to conform to those amendments by 2013, or lose the federal incentive of an additional 10% of Medicaid fraud recoveries.

The Act authorizes the state to recover from those who defraud it “treble” damages (three times the state’s economic losses) and civil penalties of $5,500 – $11,000 per false or fraudulent claim, just as the federal FCA provides.

Cases may be instituted in the following ways:

1. The Attorney General’s Office may bring an action against any person or entity alleged to have engaged in fraud or false claims directed at state funds.

2. The Attorney General is authorized to delegate authority to District Attorneys or local government attorneys to pursue cases filed concerning fraud directed at county or local government funds.

3. Private citizens (“relators”) with knowledge of fraud may bring an action under the Act. These are known as qui tam cases, which have made the federal FCA so successful. More than 80% of federal FCA recoveries now are in cases of fraud brought by private citizen “relators” (or “whistleblowers”). This law requires advance approval of the Attorney General to file a qui tam action.

Control by Attorney General: The Attorney General retains control over these cases. The Attorney General can withdraw any authority used to delegate a case. As noted, the Attorney General also can essentially stop any case brought by a private citizen that is not deemed meritorious.

Like the federal FCA, the Attorney General’s Office (or his designee) investigates the allegations, while the case remains under seal. Cases are under seal for at least 60 days, but that period is typically extended for more than a year to allow for an investigation to be completed.

How Cases Proceed: The Attorney General or other local government attorney to whom authority has been delegated may elect to “intervene” in any case brought by a private citizen, and thus will control the litigation as it moves forward. The relator’s counsel also participates in the litigation.

If the Attorney General or his designee elects not to intervene in the case, the relator is authorized to pursue the case. It is not unusual for the government initially to decline intervention, only to intervene later after the relator has advanced the case and developed further evidence that leads to a recovery by the state.

If the action is successful and produces a recovery for the state or local government involved, like the federal FCA, the Act authorizes the relator to receive 15-25% of the recovery in cases in which the state or local government has intervened; and 25-30% of any recovery if the state or local government has not intervened. The Act also provides for attorney’s fees and expenses in the event of a successful recovery. Fees and expenses are not paid by the state or local government, but by the defendants.

The Act mirrors other provisions of the federal FCA as well, provisions that are also found in other state False Claims Acts. The Act provides procedures for the state or local government to investigate claims, similar to the federal FCA. It also incorporates the federal law’s anti-retaliation provisions.

State and Local Governments May Recover Their Attorney’s Fees, Costs, and Expenses: Significantly, the state and any local government can recover from the defendant “all costs, reasonable expenses, and reasonable attorney’s fees incurred by the state or local government in prosecuting a civil action brought to recover the damages and penalties provided under this article.”

Other States’ Experiences: Other states have found their false claims laws to be very effective in addressing fraud directed at taxpayer funds. For example, in 2011 Texas obtained a $170 million judgment in a single case involving fraud against the Medicaid program. As another example, Toshiba had to repay California $30 million for knowingly selling defective computer equipment in 2000. Florida, North Carolina and Virginia are among the states that have enacted similar laws and are using them to seek recovery of substantial damages caused by fraud.

Return on Investment: The FCA is very efficient: it usually results in recovery of multiples of the money invested in it. For example, studies have reported that, under the FCA, for every dollar spent to investigate and prosecute health care fraud in civil cases, the federal government receives $15 back in return. Realizing the high return on investment, Texas added significantly to its resources devoted to pursuing health care fraud several years ago.

Corresponding Amendments to State False Medicaid Claims Act: Finally, the Act updates the State False Medicare Claims Act, to make it consistent with the 2009-2010 amendments to the federal FCA, so that the state continues to be eligible for the financial incentives established by Congress.

Cases involving Medicaid fraud will continue to be brought under the State False Medicaid Claims Act. Cases involving other Georgia or local government spending will be pursued under the new Georgia Taxpayer Protection False Claims Act.

The post Executive Summary of “Georgia Taxpayer Protection False Claims Act” appeared first on Whistleblower Lawyer Blog.

The “Georgia Taxpayer Protection False Claims Act” protects all taxpayer dollars spent not only by the State, but also by counties, municipalities, school districts, hospital authorities, and other local public bodies or entities.

Like the federal False Claims Act, this Act combats fraud and false claims against taxpayer funds by imposing “treble” damages and civil penalties of $5,500 to $11,000 for each false or fraudulent claim. It also provides rewards to whistleblowers.

The post “Taxpayer Protection False Claims Act” Is Signed Into Law in Georgia appeared first on Whistleblower Lawyer Blog.

AAJ will hold a “Qui Tam” Teleseminar on December 6, 2011 at 2:00 pm EST. With recently amended whistleblower laws and several high profile settlements, lawyers need to understand the procedural complexities and pitfalls in qui tam whistleblower cases. Cosponsored by the Qui Tam Litigation Group of AAJ, this teleseminar will provide an understanding this rapidly developing area of law.

View the agenda, faculty and register at www.justice.org/quitam. Use the promotion code QUITAM at online checkout to receive the special rate of $159.

The post Qui Tam Whistleblower Cases Under False Claims Act Explained appeared first on Whistleblower Lawyer Blog.

While she dodged a bullet, the case jolted lawyers handling health care fraud investigations, which are more typically civil cases under the False Claims Act.

Yet also last week, prosecutors succeeded in convicting Raj Rajaratnam for insider trading. Wall Street’s hedge fund industry took note of the government’s use of investigative tools such as recorded phone calls.

The post Fraud Enforcement Adds Teeth by Pursuing Individuals Allegedly Responsible for Organizations’ Frauds appeared first on Whistleblower Lawyer Blog.

This discussion is part of a fascinating gathering this April in South Beach–the OffshoreAlert Conference. As the brochure promises:

Where else could tax collectors mingle with tax minimizers, asset tracers with asset protectors, regulators with the regulated, whistleblowers with their former employers and crooks with prosecutors?

How to protect whistleblowers from criminal and civil liability was a topic my panel discussed at the 2010 IRS Whistleblower Boot Camp in Washington. Because we had the IRS Chief Counsel’s Office participating in that discussion, we were unable to discuss directly what went wrong for Birkenfeld as he brought important information about tax evasion to the attention of the IRS, but ended up serving a prison sentence of 40 months. (We have written previously about Birkenfeld’s errors revealed in the court record.)

At the OffshoreAlert Conference discussion this year, I will moderate the panel discussion about what can be done to protect whistleblowers from criminal and civil exposure. Joining me are former Justice Department official and former General Counsel of the U.S. Department of Homeland Security Joe D. Whitley; former prosecutor and now whistleblower attorney Marc Raspanti; and federal and international tax attorney Richard Rubin.

The program description is reprinted below:

Avoiding the Mistakes of the UBS/Birkenfeld Case: Protecting Whistleblowers from Criminal and Civil Liability

Time: 1:15 PM – 2:30 PM
Date: Tuesday, April 5, 2010
Keywords: Money Laundering & Compliance
“Swiss banker turned whistleblower ended up with a prison sentence” read one headline. How did UBS whistleblower Bradley Birkenfeld end up being prosecuted for a felony, and serving a forty-month prison sentence–even though the IRS found his information essential to its $780 million settlement with UBS? How can other whistleblowers minimize their risks of facing criminal and civil liability when they report substantial financial violations?

This panel of a former senior U.S. Department of Justice official, other former criminal prosecutors, and an international tax attorney will discuss what the UBS whistleblower apparently did to subject himself to criminal prosecution-and the steps a whistleblower must take to avoid that fate. The whistleblower lawyers on the panel will discuss the “ground rules” for minimizing the risks to whistleblowers of criminal and civil liability, both in the United States and other countries.

•Michael A. Sullivan, Whistleblower Lawyer, Finch McCranie (Atlanta)

•Marc S. Raspanti, Whistleblower Lawyer and Former Prosecutor, Pietragallo Gordon Alfano Bosick & Raspanti, LLP (Philadelphia)

•Richard R. Rubin, Federal and International Tax Attorney, Rubin Law (Johannesburg/Atlanta)

•Joe D. Whitley, former U.S. Acting Associate Attorney General and former General Counsel of U.S. Department of Homeland Security, Greenberg Traurig, LLP (Washington, D.C. & Atlanta)

The post Offshore Alert Conference: Protecting Whistleblowers from Criminal and Civil Liability appeared first on Whistleblower Lawyer Blog.

This approach to qui tam cases allows the government to leverage its limited resources by calling on the resources provided by private attorneys. This is essentially a “joint prosecution effort, ” in which the government counsel and investigators can rely on Relator’s counsel at each stage,

–from the beginning of its investigation,

–to obtaining input for preparation of subpoenas for documentary evidence from the defendants,

–to review of evidence compiled by the government in response to subpoenas,

–to evaluation of the responses and explanations that defendants provide,

–to providing analyses and summaries of evidence rebutting the defendants’ factual arguments,

–to performing research that ultimately will be used by the government to rebut the defendants’ legal arguments,

–to performing damages calculations and marshaling arguments in support,

–to consulting with the government on negotiation strategies and steps to be taken to resolve the matter,

–and, finally, to try the case, or otherwise resolve the case.

The taxpaying members of the public are the beneficiaries of this joint effort, which allows the government both to stop and recover damages for fraud, as well as to make those who steal from taxpayers think twice.

Since the late 1980s, our attorneys have worked with the nation’s major whistleblower law, the False Claims Act. We have represented whistleblowers who reported fraud and false claims in many government procurement programs, including contractor fraud in Iraq reconstruction, other military contracts, NASA programs, Hurricane Katrina and other disaster relief, research grants and cooperative agreements, and of course Medicare/Medicaid fraud.

Ever since the start of the new IRS Whistleblower Program, our whistleblower lawyers at Finch McCranie, LLP also have represented whistleblowers in the new program. We have represented clients with IRS Whistleblower claims in the hedge fund industry, other financial services industries, real estate, manufacturing, and many other businesses, as tax fraud, tax evasion, and other tax noncompliance are not limited to one industry.

We were also contacted by the Senate Banking Committee staff for ideas on how the new SEC Whistleblower program should work, and have already been contacted by Wall Street whistleblowers to represent them in pursuing SEC Whistleblower claims.

For a free consultation about a possible whistleblower claim, please call us at 800-228-9159, or email us HERE.

The post How Whistleblower Lawyers Work Alongside Government Lawyers In Successful Qui Tam Cases Under the False Claims Act appeared first on Whistleblower Lawyer Blog.

As we have discussed at length, in the Deficit Reduction Act of 2005, Congress recognized how effective the False Claims has been in recovering money for fraud against the government, by creating financial incentives for states that enact equally effective versions of the federal False Claims Act.

“Weaker” state versions of the False Claims Act do not qualify for the incentives, however. The Inspector General for the Department of Health and Human Services must approve a state’s False Claims Act before the incentives are available. So far, the IG has approved fourteen state FCAs, while disapproving six other state acts.

Since then, Congress has closed loopholes in the False Claims Act exploited by those who steal taxpayer funds. The 2009 Fraud Enforcement Recovery Act made significant improvements to strengthen the nation’s major whistleblower law, as we have summarized before. In March 2010, Congress modified the False Claims Act’s “public disclosure” and “original source” provisions as part of the major health care overhaul, the Patient Protection and Affordable Care Act.

This week, Grassley asked the Inspector General and Attorney General to review existing state False Claims Acts to ensure that they comply with these recent improvements to the federal False Claims Act.

“Updated information will help states fine tune existing state laws and state-level proposals, in order to be eligible for the federal incentive and beef up fraud-fighting efforts,” Grassley said. “This kind of effort at the state and federal level is more important than ever as Medicaid programs are expanded and face new burdens and growing fiscal challenges. Every dollar lost to fraud is one less dollar for those who depend on the program and harms the sustainability of the Medicaid program.”

“The federal False Claims Act has become the federal government’s most effective tool against health care fraud, and a major factor in its success is the way that it empowers whistleblowers who know about wrongdoing. They are the watchdogs that taxpayers and beneficiaries need working on their behalf, and the more states that recognize the value of whistleblowers in fighting fraud, the better,” Grassley said.

Grassley singled out for special scrutiny proposed state laws that include a “first-to-file” bar that is more restrictive than the federal Act. This provision would preclude whistleblowers (“qui tam relators”) from filing suit under a state FCA if a similar suit is filed under another state FCA. Grassley warned that such rules would not be considered “at least as effective in rewarding and facilitating qui tam actions”:

I am particularly interested in the examination of the “first to file” bar provisions in state FCAs. These provisions will severely limit qui tam actions brought by relators in States where the language is adopted. Such a provision is included in the Oklahoma Medicaid False Claims Act codified at Okla. Stat. tit. 63 § 5053.2(B)(5) (20 I0). While HHS/OIG ultimately concluded the Oklahoma statute was not as effective as the federal FCA in a letter dated July 24, 2008, the “first to file” bar was not addressed as part of HHS/OIG’s analysis of Oklahoma’s statute. Similar language is currently being debated as other States consider enacting state FCAs; thus, guidance from HHS/OIG and the Attorney General on this provision would help clarify if the inclusion of this provision would deem a statute ineligible for the incentive under section 6031.

Grassley, the co-author of the modern False Claims Act’s 1986 amendments that made it the government’s chief tool for combating fraud, has warned states that they cannot adopt this weaker version of the Act if they desire the financial incentives. That is sound advice, as there is no principled basis for this watering down of an important law enforcement tool.

The full text of Sen. Grassley’s April 28 letter is reprinted below:

WASHINGTON, DC 20510 April 28, 2010 The Honorable Daniel R. Levinson Inspector General Department of Health and Human Services 330 Independence Ave, SW Washington, D.C. 20201
The Honorable Eric H. Holder, Jr.
Attorney General U.S. Department of Justice 950 Pennsylvania Avenue, N.W.
Washington, D.C. 20535
Dear Inspector General Levinson and Attorney General Holder:

On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 (ORA) into law. (Pub. L. No. 109- I 71). Section 6031 of the ORA, codified at 42 U.S.C.
§ 1396(h), provides a financial incentive for States to enact state False Claims Acts (FCAs) that “contain provisions that are at least as effective in rewarding and facilitating qui tam actions for false claims as those described in the federal False Claims Act.” The ORA requires that the Office of the Inspector General at the Department of Health and Human Services (HHS/OIG) work in consultation with the Department of Justice (DOJ)
to determine if a state FCA meets the qualifications outlined in section 6031. I write today regarding your responsibilities under section 6031 and the need to update compliance guidance to States to reflect recent changes to the federal False Claims Act (31 U.S.C. § 3729 et seq.) that were included in the Fraud Enforcement Recovery Act (Pub. L. No. 111-21) and the Patient Protection and Affordable Care Act (Pub. L. No.
111-148).

Section 6031 specifically outlines four requirements for determining if a state FCA is eligible for the incentive, specifically:

(1) The law establishes liability to the State for false or fraudulent claims described in section 3729 of title 31 with respect to any expenditure described in [the Medicaid Program];

(2) The law contains provisions that are at least as effective in rewarding and facilitating qui tam actions for false or fraudulent claims as those described in sections 3730 through 3732 of title 31;

(3) The law contains a requirement for filing an action under seal for 60 days with review by the State Attorney General;

(4) The law contains a civil penalty that is not less than the amount of the civil penalty authorized under section 3729 of title 31.

To implement this section, the OIG published guidelines for evaluating state FCAs in the Federal Register on August 21, 2006. Those guidelines outline the basic requirements a state FCA must contain in order to be deemed compliant with the requirements of section 6031. The guidelines expressly state that the OIG will consider whether the state FCA liability provisions include language mirroring section 3729 of the federal False Claims Act. further, the guidelines also describe the procedural requirements and whistleblower protections that a state FC/ must have in order to be compliant. To date, the OIG has deemed fourteen state FCAs compliant with section 6031 and eligible for the incentive.
However, the OIG has determined that six other state FCAs fail to meet the requirements outlined in section 6031 and are not eligible for the incentive. While the requirements of section 6031 and the guidance issued in the Federal Register are clear, some States have continued to seek qualification for the incentive, despite their failure to pass robust legislation modeled after the federal FCA.

On May 20,2009, President Obama signed into law the Fraud Enforcement Recovery Act (FERA) which included, among other things, substantive changes to the federal FCA’s liability provisions located at 31 U.S.c. § 3729. Further, on March 23, 2010,
President Obama signed into law the Patient Protection and Affordable Care Act (Pub. L.
No. 111-148), which included substantive changes to the federal FCA by modifying the public disclosure bar and original source exceptions codified at 31 U.S.C. § 3730. Taken together, these changes represent the most substantial modifications to the federal FCA since I authored the 1986 amendments to revive the FCA.

These changes to the federal FCA removed liability loopholes and statutory confusion that were used to undermine the original intent of the federal FCA. As a result, in order to ensure that state FCA’s that are currently qualified under section 6031, your offices should: (I) conduct a thorough review of state FCA’s to determine if they remain in compliance with the requirements of section 6031 including the requirement to be “as effective as” the federal FCA as revised; (2) review the August 21, 2006, guidance to States that was published in the Federal Register to determine if the changes to the federal FCA impact your advice to States; (3) examine whether proposed state laws that include a “first-to-file” bar that would preclude qui lam relators from filing suit under a state FCA if a similar suit is filed under another state FCA, would be considered “at least as effective in rewarding and facilitating qui tam actions” under section 6031.

I am particularly interested in the examination of the “first to file” bar provisions in state FCAs. Thesc provisions will severely limit qui lam actions brought by relators in States where the language is adopted. Such a provision is included in the Oklahoma Medicaid False Claims Act codified at Okla. Stat. tit. 63 § 5053.2(B)(5) (20 I0). While HHS/OIG ultimately concluded the Oklahoma statute was not as effective as the federal FCA in a letter dated July 24, 2008, the “first to file” bar was not addressed as part of HHS/OIG’s analysis of Oklahoma’s statute. Similar language is currently being debated as other States consider enacting state FCAs; thus, guidance from HHS/OIG and the Attorney General on this provision would help clarify if the inclusion of this provision would deem a statute ineligible for the incentive under section 6031.

I request that you conduct this review expeditiously and provide my office with a briefing to discuss the results of the review upon completion. Should you or your staff have any questions regarding this request please contact Nick Podsiadly of my Judiciary Committee staff at 202-224-9032.

Attachment
Sincerely,

Charles E. Grassley United States Senator

The post State False Claims Acts Must Be Updated to Include New False Claims Act Changes, Grassley Warns appeared first on Whistleblower Lawyer Blog.

DOJ cited the threat to patients of “imminent and serious threat of harm to their lives, health and safety.”

The seven hospitals include East Central Regional Hospital, Georgia Regional Hospital at Savannah, Georgia Regional Hospital at Atlanta, Southwestern State Hospital, Central State Hospital, West Central Georgia Regional Hospital, and Northwest Georgia Regional Hospital.

The announcement is repinted below:

Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASE Friday, January 29, 2010 Justice Department Files for Immediate Relief Regarding Conditions in Georgia’s Hospitals WASHINGTON – The Justice Department’s Civil Rights Division today announced that it has filed a motion for immediate relief to protect individuals confined in seven state-run psychiatric hospitals in Georgia from the imminent and serious threat of harm to their lives, health and safety. The motion, filed late yesterday, seeks appointment of a monitor who will set binding targets and timetables for reducing the number of residents at the hospitals and expanding appropriate community based services.
A year ago, the state of Georgia and the Justice Department entered into an agreement to ensure that individuals in the hospitals were served in the most appropriate integrated settings and that unlawful conditions in the hospitals were remedied. The agreement was filed in United States v. Georgia, and the parties asked U.S. District Judge Charles A. Pannell Jr. to approve the agreement. However, the court has not yet approved the agreement.
The Justice Department has been monitoring conditions in the hospitals and has found that the facilities continue to be dangerous and that hundreds of individuals who could and should be served in the community remain institutionalized and continue to be exposed to dangerous conditions. Georgia continues to fail to serve patients in the most integrated setting appropriate to their needs, and preventable deaths, suicides and assaults continue to occur with alarming frequency in the hospitals.
“States responsible for the care of individuals living in state run facilities have a duty to protect them from harm. Individuals in Georgia’s hospitals are being subjected to a widespread pattern of violence and are not being protected from preventable deaths,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “We need quick action to protect these individuals.”
More than a decade ago, in Olmstead v. L.C., the Supreme Court found that Georgia Regional Hospital in Atlanta was impermissibly segregating two individuals with disabilities in that hospital when they could have been served in more integrated settings. The Supreme Court ordered states to serve individuals with disabilities in the most integrated settings appropriate to their needs. In the same hospital involved in that landmark case, and the other six run by Georgia, the state continues to impermissibly segregate hundreds of individuals.
In addition to the unlawful segregation, individuals in the hospitals are exposed to egregious harm. Some examples include:
• In 2009, the state failed to adequately supervise an individual who had killed previously. The individual assaulted and killed another individual in the hospital.
• In 2008, hospital staff failed to intervene in a fight between individuals. One of the individuals was knocked unconscious and died a few days later from blunt force trauma to the head.
• In 2009, staff failed to adequately supervise an individual who raped another individual.
• In 2009, an individual committed suicide by tipping his bed up and hanging himself from the upended bed. The Justice Department’s experts had repeatedly warned hospital staff during on-site visits of the dangers posed by these beds that were not bolted to the floor.
• This month, the state failed to adequately supervise an individual who expressed suicidal thoughts the day before she committed suicide.
The seven hospitals include East Central Regional Hospital, Georgia Regional Hospital at Savannah, Georgia Regional Hospital at Atlanta, Southwestern State Hospital, Central State Hospital, West Central Georgia Regional Hospital and Northwest Georgia Regional Hospital.
The Civil Rights Division is authorized to conduct investigations under the Civil Rights of Institutionalized Persons Act (CRIPA) and the Americans with Disabilities Act (ADA). CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to psychiatric hospitals, these institutions include nursing homes, residential facilities serving persons with developmental disabilities, jails, prisons and juvenile correctional facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. The ADA authorizes the Attorney General to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Please visit http://www.justice.gov/crt to learn more about CRIPA, the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
The motion for immediate relief was filed by Mary Bohan, Timothy Mygatt, Robert Koch and Emily Gunston, Trial Attorneys in the Special Litigation Section of the Civil Rights Division.
10-103 Civil Rights Division

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I am pleased to be on the panel discussing “False Claims Act Developments,” moderated by Jack Boese of Fried Frank. This will be a particularly interesting year for this annual meeting, as Congress enacted major changes to the False Claims Act that took effect on May 20, 2009.

In addition, the “Health Care Fraud Enforcement Act” pending in the Senate would enhance further the government’s tools used to investigate and remedy Medicare and Medicaid fraud. This bill would remove any question that all payments made pursuant to illegal kickbacks are “false” for purposes of the False Claims Act.

Among the significant 2009 changes to the False Claims Act made by the Fraud Enforcement and Recovery Act are the following:

1. The amendments expanded the definition of “claim,” and fraud directed against government contractors, grantees, and other recipients is now plainly covered by the False Claims Act.

2. Funds administered by the United States government (e.g., in Iraq) are now protected.

3. Retaining overpayments of money from the government is now a stated basis of liability, which is a source of concern for health care providers, among others.

4. Liability for “conspiracy” to violate the Act is now broader.

5. Protection of whistleblowers and others against “retaliation” now extends not only to “employees,” but also to “contractors” and “agents”; and persons other than “employers” potentially may be liable for retaliation.

6. In investigations, the government now has authority to use “Civil Investigative Demands” more broadly, and to share information more with state and local authorities and with whistleblowers/relators.

7. A standard definition of what is “material” now applies in False Claims Act cases.

8. The statute of limitations has been clarified for when the government asserts its own claims, after the whistleblower (or “relator”) has filed a qui tam case under the False Claims Act.

The full agenda for tomorrow’s “SOUTHEASTERN HEALTH CARE FRAUD INSTITUTE” is below:

SOUTHEASTERN HEALTH CARE FRAUD INSTITUTE
DECEMBER 17, 2009

State Bar of Georgia Headquarters 104 Marietta St. NW Atlanta, GA

Co-Sponsors:
Health Law Section, State Bar of Georiga
Presiding:
Joe D. Whitley, Program Chair, Greenberg Traurig LLP, Atlanta & Washington, DC Paul B. Murphy, Program Co-Chair, King & Spalding LLP, Atlanta
7:45 REGISTRATION AND CONTINENTAL BREAKFAST (All attendees must check in upon arrival. A removable jacket or sweater is recommended.)

8:20 WELCOME AND PROGRAM OVERVIEW Joe D. Whitley Paul B. Murphy
8:30 FEDERAL AND STATE–HEALTH CARE FRAUD INITIATIVES Moderator:
Paul B. Murphy
Panelists:
Randy S. Chartash, Assistant United States Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Charles M. Richards, Director, State Health Care Fraud Control Unit, Tucker Kirk Ogrosky, Deputy Chief for Health Care Fraud, U.S. Department of Justice, Fraud Section, Criminal Division, Washington, DC Paul J. Fike, Supervisory Special Agent, Federal Bureau of Investigation, Atlanta
9:30 BREAK
9:45 FEDERAL AND STATE-FALSE CLAIMS ACT DEVELOPMENTS Moderator:
John T. Boese, Fried Frank, Washington, DC
Panelists:
Christopher J. Huber, Assistant U.S. Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Michael A. Sullivan, Finch McCranie, LLP, Atlanta Marlan B. Wilbanks, Wilbanks & Bridges, Atlanta Paul N. Monnin, DLA Piper US LLP, Atlanta
10:45 ANTI-KICKBACK STATUTES and STARK ENFORCEMENT Moderator:
Gabriel Imperato, Broad & Cassel, Ft. Lauderdale, FL
Panelists:
Robert M. Keenan III, King & Spalding LLP, Atlanta Charlene L. McGinty, McKenna Long & Aldridge LLP, Atlanta Jacqueline C. Baratian, Alston & Bird LLP, Washingtion, DC
11:45 LUNCHEON (Included in registration fee)
“Looking Forward: Professionalism in 2010”
Amy Levine Weil, The Weil Firm, Atlanta; Former Chief, Appellate Section, U.S. Attorney’s Office, Northern District of Georgia, Atlanta
12:45 Health Care providers: general counsel ROUNDTABLE Moderator:
Joe D. Whitley
Panelists:
Jay D. Mitchell, Executive Vice President and General Counsel, Piedmont Healthcare, Inc., Atlanta Jane E. Jordan, Deputy General Counsel/Chief Health Counsel, Office of the General Counsel, Emory University, Atlanta Paul Justice, Vice President and General Counsel, Saint Joseph’s Hospital, Atlanta
1:45 before the government knocks: internal investigations and voluntary disclosure Moderator:
R. Joseph Burby, IV, Bryan Cave LLP, Atlanta
Panelists:
Christopher C. Burris, King & Spalding LLP, Atlanta Mark P. Schnapp, Greenberg Traurig LLP, Miami, FL Don J. DeGabrielle, Fulbright & Jaworski LLP, Houston, TX
2:35 after the government knocks: handling a health care fraud case (emphasis on parallel proceedings)
Moderator:
Anthony L. Cochran, Chilivis, Cochran, Larkins & Bever, LLP, Atlanta
Panelists:
Glenn D. Baker, Assistant U.S. Attorney, U.S. Attorney’s Office for the Northern District of Georgia, Atlanta Richard H. Deane, Jones Day, Atlanta Michael L. Brown, Alston & Bird LLP, Atlanta
3:25 BREAK
3:40 Office of inspector general initiatives Moderator:
Nancy E. Taylor, Greenberg Traurig LLP, Washington, DC
Panelists:
Kenneth E. Hooper, Hooper Cornell PLLC, Boise, ID Julie L. Nielsen, Health Care Litigation & Investigations Consultant, Tampa, FL Jonathan Diesenhaus, Hogan & Hartson LLP, Washington, DC
4:30 ADJOURN

The post Health Care Fraud Lawyers Gather to Discuss Amendments to False Claims Act and Other Whistleblower Developments appeared first on Whistleblower Lawyer Blog.

After a Senate Judiciary Committee hearing Wednesday on “Effective Strategies for Preventing Health Care Fraud,” Senators Leahy, Kaufman, Specter, Kohl, Schumer, and Klobuchar sponsored the new anti-fraud measure.

Excerpts of the Senate announcement follow:

The bill makes straightforward but critical improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes, all of which would strengthen prosecutors’ ability to combat this particularly destructive form of fraud. These improvements include:

o Increasing funding: Money spent on health care fraud prevention and enforcement is returned manifold through costs savings and civil and criminal recoveries. This bill authorizes a modest, yet significant, increase in federal antifraud spending of $20,000,000 per year through 2016.

The new bill would add to legislation earlier this year to strengthen law enforcement statutes aimed at fraud, the Fraud Enforcement and Recovery Act.

Of particular importance to qui tam whistleblower cases under the False Claims Act, the nation’s major whistleblower law, the new bill removes any ambiguity that “kickbacks” violate the False Claims Act. The official summary discusses kickbacks in section 2(c):

Section 2(c). Kickbacks
All too often, health care providers secure business by paying illegal kickbacks, which needlessly increase health care risks and costs. When a doctor’s independent judgment is compromised by a kickback, the patient faces the risk that the doctor is making decisions that are not in the patient’s best interest. In addition, excessive payments to doctors increase health care costs, may result in unfair competition, and may compromise medical research independence and the standards of scientific integrity.

This section remedies the problem by amending the AKS to ensure that all claims resulting from illegal kickbacks are false, even when the claims are not submitted directly by the wrongdoers themselves. (Notably, in such circumstances, neither AKS nor FCA liability will lie against an innocent third party that submitted the claim but lacked the requisite intent required under those statutes.)

The full text of the bill is below:

HEN09A48 S.L.C.
111TH CONGRESS 1ST SESSION S. ll To improve health care fraud enforcement.
IN THE SENATE OF THE UNITED STATES llllllllll Mr. KAUFMAN (for himself, Mr. LEAHY, and Mr. SPECTER) introduced the following bill; which was read twice and referred to the Committee on llllllllll A BILL To improve health care fraud enforcement.
1 Be it enacted by the Senate and House of Representatives2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ”Health Care Fraud 5 Enforcement Act of 2009”.
6 SEC. 2. ENHANCEMENTS TO CRIMINAL LAWS RELATING TO 7 HEALTH CARE FRAUD.
8 (a) FRAUD SENTENCING GUIDELINES.-
9 (1) DEFINITION.-In this subsection, the term 10 ”Federal health care offense” has the meaning given 2 HEN09A48 S.L.C.
1 that term in section 24 of title 18, United States 2 Code, as amended by this Act.
3 (2) REVIEW AND AMENDMENTS.-Pursuant to 4 the authority under section 994(p) of title 28,
5 United States Code, and in accordance with this 6 subsection, the United States Sentencing Commis7 sion shall-
8 (A) review the Federal Sentencing Guide9 lines and policy statements applicable to per10 sons convicted of Federal health care offenses;
11 (B) amend the Federal Sentencing Guide12 lines and policy statements applicable to per13 sons convicted of Federal health care offenses 14 involving Government health care programs to 15 provide that the aggregate dollar amount of 16 fraudulent bills submitted to the Government 17 health care program shall constitute prima facie 18 evidence of the amount of the intended loss by 19 the defendant; and 20 (C) amend the Federal Sentencing Guide21 lines to provide-
22 (i) a 2-level increase in the offense 23 level for any defendant convicted of a Fed24 eral health care offense relating to a Gov25 ernment health care program which in3 HEN09A48 S.L.C.
1 volves a loss of not less than $1,000,000 2 and less than $7,000,000;
3 (ii) a 3-level increase in the offense 4 level for any defendant convicted of a Fed5 eral health care offense relating to a Gov6 ernment health care program which in7 volves a loss of not less than $7,000,000 8 and less than $20,000,000;
9 (iii) a 4-level increase in the offense 10 level for any defendant convicted of a Fed11 eral health care offense relating to a Gov12 ernment health care program which in13 volves a loss of not less than $20,000,000;
14 and 15 (iv) if appropriate, otherwise amend 16 the Federal Sentencing Guidelines and pol17 icy statements applicable to persons con18 victed of Federal health care offenses in19 volving Government health care programs.
20 (3) REQUIREMENTS.-In carrying this sub21 section, the United States Sentencing Commission 22 shall-
23 (A) ensure that the Federal Sentencing 24 Guidelines and policy statements-
4 HEN09A48 S.L.C.
1 (i) reflect the serious harms associ2 ated with health care fraud and the need 3 for aggressive and appropriate law enforce4 ment action to prevent such fraud; and 5 (ii) provide increased penalties for 6 persons convicted of health care fraud of7 fenses in appropriate circumstances;
8 (B) consult with individuals or groups rep9 resenting health care fraud victims, law enforce10 ment officials, the health care industry, and the 11 Federal judiciary as part of the review de12 scribed in paragraph (2);
13 (C) ensure reasonable consistency with 14 other relevant directives and with other guide15 lines under the Federal Sentencing Guidelines;
16 (D) account for any aggravating or miti17 gating circumstances that might justify excep18 tions, including circumstances for which the 19 Federal Sentencing Guidelines, as in effect on 20 the date of enactment of this Act, provide sen21 tencing enhancements;
22 (E) make any necessary conforming 23 changes to the Federal Sentencing Guidelines;
24 and 5 HEN09A48 S.L.C.
1 (F) ensure that the Federal Sentencing 2 Guidelines adequately meet the purposes of sen3 tencing.
4 (b) CRIMINAL OFFENSE.-Section 1347 of title 18,
5 United States Code, is amended-
6 (1) by inserting ”(a) IN GENERAL.-” before 7 ”Whoever knowingly”; and 8 (2) by adding at the end the following:
9 ”(b) WILLFUL CONDUCT.-For the purposes of this 10 section, a person acts willfully if the person acts volun11 tarily and purposefully to do what the law forbids and the 12 person need not have actual knowledge of the law or spe13 cific intent to violate the law.”.
14 (c) KICKBACKS.-Section 1128B of the Social Secu15 rity Act (42 U.S.C. 1320a-7b) is amended by adding at 16 the end the following new subsection:
17 ”(g) In addition to the penalties provided for in this 18 section or section 1128A, a claim for items or services that 19 are provided in violation of this section constitutes a false 20 or fraudulent claim for purposes of subchapter III of chapter 21 37 of title 31, United States Code.”.
22 (d) HEALTH CARE FRAUD OFFENSE.-Section 24(a)
23 of title 18, United States Code, is amended-
6 HEN09A48 S.L.C.
1 (1) in paragraph (1), by striking the semicolon 2 and inserting ” or section 1128B of the Social Secu3 rity Act (42 U.S.C. 1320a-7b); or”; and 4 (2) in paragraph (2)-
5 (A) by inserting ”1349,” after ”1343,”;
6 and 7 (B) by inserting ”section 301 of the Fed8 eral Food, Drug, and Cosmetic Act (21 U.S.C.
9 331), or section 411, 501, or 511 of the Em10 ployee Retirement Income Security Act of 1974 11 (29 U.S.C. 1111, 1131, and 1141),” after 12 ”title,”.
13 SEC. 3. SUBPOENA AUTHORITY RELATING TO HEALTH 14 CARE.
15 (a) SUBPOENAS UNDER THE HEALTH INSURANCE 16 PORTABILITY AND ACCOUNTABILITY ACT OF 1996.-Sec17 tion 1510(b) of title 18, United States Code, is amended-
18 (1) in paragraph (1), by striking ”to the grand 19 jury”; and 20 (2) in paragraph (2)-
21 (A) in subparagraph (A), by striking 22 ”grand jury subpoena” and inserting ”subpoena 23 for records”; and 24 (B) in the matter following subparagraph 25 (B), by striking ”to the grand jury”.
7 HEN09A48 S.L.C.
1 (b) SUBPOENAS UNDER THE CIVIL RIGHTS OF IN2 STITUTIONALIZED PERSONS ACT.-The Civil Rights of 3 Institutionalized Persons Act (42 U.S.C. 1997 et seq.) is 4 amended by inserting after section 3 the following:
5 ”SEC. 3A. SUBPOENA AUTHORITY.
6 ”(a) AUTHORITY.-The Attorney General, or at the 7 direction of the Attorney General, any officer or employee 8 of the Department of Justice may require by subpoena 9 access to any institution that is the subject of an investiga10 tion under this Act and to any document, record, material,
11 file, report, memorandum, policy, procedure, investigation,
12 video or audio recording, or quality assurance report relat13 ing to any institution that is the subject of an investiga14 tion under this Act to determine whether there are condi15 tions which deprive persons residing in or confined to the 16 institution of any rights, privileges, or immunities secured 17 or protected by the Constitution or laws of the United 18 States.
19 ”(b) ISSUANCE AND ENFORCEMENT OF SUB20 POENAS.-
21 ”(1) ISSUANCE.-Subpoenas issued under this 22 section-
23 ”(A) shall bear the signature of the Attor24 ney General or any officer or employee of the 8 HEN09A48 S.L.C.
1 Department of Justice as designated by the At2 torney General; and 3 ”(B) shall be served by any person or class 4 of persons designated by the Attorney General 5 or a designated officer or employee for that 6 purpose.
7 ”(2) ENFORCEMENT.-In the case of contu8 macy or failure to obey a subpoena issued under this 9 section, the United States district court for the judi10 cial district in which the institution is located may 11 issue an order requiring compliance. Any failure to 12 obey the order of the court may be punished by the 13 court as a contempt that court.
14 ”(c) PROTECTION OF SUBPOENAED RECORDS AND 15 INFORMATION.-Any document, record, material, file, re16 port, memorandum, policy, procedure, investigation, video 17 or audio recording, or quality assurance report or other 18 information obtained under a subpoena issued under this 19 section-
20 ”(1) may not be used for any purpose other 21 than to protect the rights, privileges, or immunities 22 secured or protected by the Constitution or laws of 23 the United States of persons who reside, have re24 sided, or will reside in an institution;
9 HEN09A48 S.L.C.
1 ”(2) may not be transmitted by or within the 2 Department of Justice for any purpose other than to 3 protect the rights, privileges, or immunities secured 4 or protected by the Constitution or laws of the 5 United States of persons who reside, have resided,
6 or will reside in an institution; and 7 ”(3) shall be redacted, obscured, or otherwise 8 altered if used in any publicly available manner so 9 as to prevent the disclosure of any personally identi10 fiable information.”.
11 SEC. 4. ADDITIONAL AUTHORIZATION OF APPROPRIATIONS 12 TO THE DEPARTMENT OF JUSTICE FOR 13 CRIMINAL AND CIVIL ENFORCEMENT OF 14 HEALTH CARE FRAUD.
15 (a) AUTHORIZATION.-There is authorized to be ap16 propriated to the Attorney General, to remain available 17 until expended, $20,000,000 for each of fiscal years 2011 18 through 2016 for the purposes of investigations, prosecu19 tions, and civil or other proceedings relating to fraud and 20 abuse in connection with any health care benefit program,
21 as defined in section 24(b) of title 18, United States Code.
22 (b) ALLOCATIONS.-With respect to each of fiscal 23 years 2011 through 2016, the amount authorized to be 24 appropriated under subsection (a) shall be allocated as fol25 lows:
10 HEN09A48 S.L.C.
1 (1) For the offices of the United States attor2 neys, $10,000,000.
3 (2) For the Criminal Division of the Depart4 ment of Justice, $5,000,000.
5 (3) For the Civil Division of the Department of 6 Justice, $5,000,000.

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