Publication of OIG's Guidelines for Evaluating State False Claims Acts, 48552-48554 [E6-13749]
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48552
Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices
will be effective for services provided
on/or after January 1, 2006 to the extent
consistent with payment authorities
including the applicable Medicaid State
plan.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Indian Health Service
Reimbursement Rates for Calendar
Year 2006
Indian Health Service, HHS.
Notice.
AGENCY:
ACTION:
SUMMARY: Notice is given that the
Director of Indian Health Service (IHS),
under the authority of sections 321(a)
and 322(b) of the Public Health Service
Act (42 U.S.C. 248 and 249(b)), Public
Law 83–568 (42 U.S.C. 2001 (a)), and
the Indian Health Care Improvement
Act (25 U.S.C. 1601 et seq.), has
approved the following rates for
inpatient and outpatient medical care
provided by IHS facilities for Calendar
Year 2006 for Medicare and Medicaid
beneficiaries and beneficiaries of other
Federal programs. The Medicare Part A
inpatient rates are excluded from the
table below as they are paid based on
the prospective payment system. Since
the inpatient rates set forth below do not
include all physician services and
practitioner services, additional
payment may be available to the extent
that those services meet applicable
requirements. Public Law 106–554,
section 432, dated December 21, 2000,
authorized IHS facilities to file Medicare
Part B claims with the carrier for
payment for physician and certain other
practitioner services provided on or
after July 1, 2001.
Calendar
year 2006
hsrobinson on PROD1PC72 with NOTICES
Inpatient Hospital Per Diem Rate
(Excludes Physician/Practitioner Services):
Lower 48 States ......................
Alaska .....................................
Outpatient Per Visit Rate (Excluding Medicare):
Lower 48 States ......................
Alaska .....................................
Outpatient Per Visit Rate (Medicare):
Lower 48 States ......................
Alaska .....................................
Medicare Part B Inpatient Ancillary Per Diem Rate:
Lower 48 States ......................
Alaska .....................................
$1,660
2,131
242
406
193
348
340
625
Outpatient Surgery Rate (Medicare)
Established Medicare rates for
freestanding Ambulatory Surgery
Centers.
Effective Date for Calendar Year 2006
Rates
Consistent with previous annual rate
revisions, the Calendar Year 2006 rates
VerDate Aug<31>2005
17:53 Aug 18, 2006
Jkt 208001
Dated: June 27, 2006.
Charles W. Grim,
Assistant Surgeon General, Director, Indian
Health Service.
[FR Doc. E6–13785 Filed 8–18–06; 8:45 am]
BILLING CODE 4165–16–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Office of Inspector General
Publication of OIG’s Guidelines for
Evaluating State False Claims Acts
Office of Inspector General
(OIG), HHS.
ACTION: Notice.
AGENCY:
SUMMARY: Under section 1909 of the
Social Security Act (the Act), 42 U.S.C.
1396h, the Inspector General of the
Department of Health and Human
Services is required to determine, in
consultation with the Attorney General,
whether a State has in effect a law
relating to false or fraudulent claims
submitted to a State Medicaid program
that meets certain enumerated
requirements. If the Inspector General
determines that a State law meets these
requirements, the State medical
assistance percentage, with respect to
any amounts recovered under a State
action brought under such a law, shall
be increased by 10 percentage points.
This notice sets forth the Inspector
General’s guidelines for evaluating
whether a State law meets the
requirements of section 1909 of the Act.
DATES: Effective Date: These guidelines
are effective on August 21, 2006.
FOR FURTHER INFORMATION CONTACT:
Roderick T. Chen, Office of Counsel to
the Inspector General, (202) 401–4134,
or Joel Schaer, Office of External Affairs,
(202) 619–0089.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1909 of the Act, added by
section 6031 of the Deficit Reduction
Act of 2005 (Pub. L. 109–171), creates a
financial incentive for States to enact
legislation that establishes liability to
the State for individuals or entities that
submit false or fraudulent claims to the
State Medicaid program. This incentive
takes the form of an increase in the
State’s share of any amounts recovered
from a State action brought under a
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qualifying law.1 In order for a State to
qualify for this incentive, the State law
must meet certain enumerated
requirements, as determined by the
Inspector General of the Department of
Health and Human Services in
consultation with the Attorney General.
Medicaid, authorized under Title XIX
of the Act, 42 U.S.C. 1396–1396v, is a
joint Federal and State program that
pays for medical and other related
benefits provided to needy beneficiaries.
States that participate in Medicaid
administer their own programs within
broad Federal guidelines and receive
matching funds from the Federal
government. The Federal share
generally varies between 50 percent and
83 percent, depending on the State per
capita income.
False or fraudulent claims presented
to State Medicaid programs by
participating providers and others may
give rise to civil liability under the
Federal False Claims Act (FCA), 31
U.S.C. 3729–3733. Under the FCA, any
person who knowingly submits a false
or fraudulent claim to a State Medicaid
program is liable to the Federal
Government for three times the amount
of the Federal Government’s damages
plus penalties of $5,000 to $10,000 for
each false or fraudulent claim. Any
recovery of damages to the State
Medicaid program will be shared with
the State in the same proportion as the
State’s share of the costs of the Medicaid
program. For example, if a State’s
Medicaid share is 40 percent, then the
State would be entitled to receive 40
percent of the damages and the Federal
Government would retain 60 percent of
the damages.
Under the qui tam provisions of the
FCA, private persons (known as
relators) may file lawsuits in Federal
court against individuals and/or entities
that defraud the Federal government by
filing false or fraudulent Medicaid
claims. The Department of Justice (DOJ)
has an opportunity to investigate the
relator’s allegations, and DOJ may
intervene and take over the prosecution
of the action. If DOJ chooses not to
intervene, the relator has the right to
conduct the action. In general, with
respect to recoveries of Federal damages
and penalties in cases in which DOJ has
intervened, the relator is entitled to
between 15 and 25 percent of the
recovery of Federal damages and
penalties depending upon the extent to
which the relator substantially
contributed to the case. In general, the
relator is entitled to between 25 and 30
1 The increase results from a 10-percentage point
decrease in the Federal share of any recovery from
a State action brought under a qualifying law.
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percent of any recoveries of Federal
damages and penalties if DOJ has not
intervened in the case. Because the FCA
applies only to false claims against the
Federal Government, the relator is not
entitled to a share of the State portion
of a Medicaid recovery under the FCA.
Many States have enacted their own
false claims acts that establish civil
liability to the State for individuals and
entities that submit false or fraudulent
claims to the State Medicaid program.
Generally, these laws include qui tam
provisions that reward relators with a
share of the State portion of recoveries
in cases of Medicaid fraud. Currently, if
a State obtains a recovery as the result
of a State action relating to false or
fraudulent claims submitted to its
Medicaid program, it must share the
damages recovered with the Federal
Government in the same proportion as
the Federal Government’s share in the
cost of the State Medicaid program. For
example, if a State’s Medicaid share is
40 percent, then the State would retain
40 percent of any damages recovered
from an individual or entity that has
defrauded Medicaid, and the Federal
Government would be entitled to the
remaining 60 percent of damages.
II. Section 1909 of the Social Security
Act
In order to encourage States to pursue
Medicaid fraud, Congress added a new
section 1909 to the Act, effective
January 1, 2007. Under this section, if a
State has in effect a State false claims
act that meets certain enumerated
requirements, the Federal medical
assistance percentage will be decreased
by 10 percentage points with respect to
any amount recovered under a State
action brought under such a law.
Therefore, the State’s share of any
recovery in an action under such a law
will be increased by 10 percentage
points. For example, if a State has a
qualifying State false claims act and the
State’s Medicaid share is 50 percent, the
State would be entitled to 60 percent of
the amount of the recovery, while the
Federal Government would receive the
remaining 40 percent.
Section 1909(b) of the Act requires the
Inspector General to determine, in
consultation with the Attorney General,
whether a State has in effect a false
claims act that meets the following
requirements:
1. The law must establish liability to
the State for false or fraudulent claims
described in 31 U.S.C. 3729 with respect
to any expenditure described in section
1903(a) of the Act;
2. The law must contain provisions
that are at least as effective in rewarding
and facilitating qui tam actions for false
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Jkt 208001
or fraudulent claims as those described
in 31 U.S.C. 3730–3732;
3. The law must contain a
requirement for filing an action under
seal for 60 days with review by the State
Attorney General; and
4. The law must contain a civil
penalty that is not less than the amount
of the civil penalty authorized under 31
U.S.C. 3729.
A State that, as of January 1, 2007, has
a law in effect that meets the
enumerated requirements shall be
considered in compliance with such
requirements so long as the law
continues to meet such requirements.
The effective date of section 1909 of
the Act is January 1, 2007. Thus, a State
with a law in effect that meets the
enumerated requirements will qualify
for a 10 percentage point increase in its
share of any amounts recovered from a
State action brought under the law if the
recovery is received on or after January
1, 2007. A State may enact a law before,
on, or after January 1, 2007.
Furthermore, the action that gives rise to
the recovery may be commenced before,
on, or after January 1, 2007. As long as
the State’s law meets the enumerated
requirements on or after January 1,
2007, and the recovery from the action
brought under the qualifying law is
received by the State on or after January
1, 2007, the State will qualify for a 10
percent increase in its share of the
amount recovered.
It is important to note that section
1909 of the Act does not require a State
to have in effect a false claims act or to
enact a false claims act that meets these
minimum requirements. States may
choose not to enact false claims acts, or
may choose to enact false claims acts
that do not meet the enumerated
requirements. However, a State that
does not have such a law in effect will
not qualify for the 10 percentage point
increase in its share of any recoveries
from an action brought under such a
law.
III. OIG Guidelines for Evaluating State
False Claims Acts
Section 1909(b) of the Act sets forth
four requirements that a State law must
meet if the State is to qualify for the 10
percentage point increase in any State
Medicaid share recovered under the
law. The Inspector General is required
to determine, in consultation with the
Attorney General, whether a State law
meets these requirements. After
reviewing section 1909 of the Act and
consulting with DOJ, OIG has developed
guidelines to use in evaluating whether
a State law meets the enumerated
requirements. It is important to note that
these guidelines are not model statutory
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48553
provisions. OIG is not requiring any
specific language to be included in State
false claims acts. Rather, the guidelines
reflect the provisions relevant to OIG’s
review of whether a State law meets the
requirements of section 1909(b) of the
Act.
A. Liability for False or Fraudulent
Claims
Under section 1909(b)(1) of the Act,
the State law must establish liability to
the State for false or fraudulent claims
described in 31 U.S.C. 3729, with
respect to any expenditure described in
section 1903(a) of the Act. Section
1903(a) of the Act describes
expenditures related to State Medicaid
plans, including all expenditures for
medical assistance under a State
Medicaid plan. When evaluating a State
law to determine whether it meets the
requirements of section 1909(b)(1) of the
Act, OIG will consider whether the law
provides for the following:
1. Liability to the State for false or
fraudulent claims with respect to
Medicaid program expenditures,
including:
• Knowingly presenting, or causing to
be presented, a false or fraudulent claim
for payment or approval to the Medicaid
program;
• Knowingly making, using, or
causing to be made or used, a false
record or statement to get a false or
fraudulent claim paid or approved by
the Medicaid program;
• Conspiring to defraud the Medicaid
program by getting a false or fraudulent
claim allowed or paid;
• Knowingly making, using, or
causing to be made or used, a false
record or statement to conceal, avoid, or
decrease an obligation to pay or transmit
money or property to the Medicaid
program.
2. Definitions for the terms
‘‘knowing’’ and ‘‘knowingly’’ meaning
that a person, with respect to
information: (a) Has actual knowledge of
the information; (b) acts in deliberate
ignorance of the truth or falsity of the
information; or (c) acts in reckless
disregard of the truth or falsity of the
information. In addition, no proof of
specific intent to defraud should be
required.
B. Qui Tam Provisions
Under section 1909(b)(2) of the Act, a
State law must contain provisions that
are at least as effective in rewarding and
facilitating qui tam actions for false or
fraudulent claims as those described in
31 U.S.C. 3730–3732. When evaluating
a State law to determine whether it
meets the requirements of section
1909(b)(2) of the Act, OIG will consider
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hsrobinson on PROD1PC72 with NOTICES
48554
Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices
whether the law provides for the
following:
1. A provision that authorizes a
person (relator) to bring a civil action for
a violation of the State false claims act
for the person and for the State, which
will be brought in the name of the State.
2. A provision that requires a copy of
complaint and written disclosure of
material evidence and information to be
served on the State Attorney General in
accordance with State Rules of Civil
Procedure.
3. A provision that provides that
when a relator brings a qui tam action,
no person other than the State may
intervene or bring a related action based
on the facts underlying the pending
action.
4. Provisions that set forth rights of
parties to qui tam actions, including:
• If the State proceeds with the
action, the State has primary
responsibility in the action, but the
relator shall have the right to continue
as a party to the action; and
• If the State elects not to proceed
with the action, the relator may conduct
the action but the State may intervene
at a later date upon a showing of good
cause.
5. Provisions that reward a relator
with a share of the proceeds of the
action or settlement of the claim,
including:
• If the State proceeds with an action
brought by the qui tam relator, the
relator receives at least 15 percent of the
proceeds of the action or settlement of
the claim, and may receive a higher
percentage depending on the relator’s
contribution to the prosecution of the
action;
• If the State does not proceed with
an action, the relator receives at least 25
percent of the proceeds of the action or
settlement, and may receive a higher
percentage depending on the relator’s
contribution to the prosecution of the
action; and
• The court is authorized to award
the relator an amount for reasonable
expenses, including attorneys’ fees and
costs, to be awarded against the
defendant.
6. A statute of limitations period not
shorter than 6 years after the date of the
violation is committed, or 3 years after
the date when facts material to the right
of action are known or reasonably
should have been known by the State
official charged with the responsibility
to act in the circumstances, whichever
occurs last.
7. A provision that establishes the
burden of proof, for each of the elements
of the cause of action including
damages, no greater than a
preponderance of the evidence.
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17:53 Aug 18, 2006
Jkt 208001
8. A provision that provides a cause
of action for relators who suffer
retribution from employers for
whistleblower activities related to the
State false claims act.
OIG is required to consider whether
the State law is at least as effective in
rewarding and facilitating qui tam
actions when compared to the
provisions at 31 U.S.C. 3730–3732. State
false claims acts may include
procedural rights, reductions in relator
awards, jurisdictional bars, and other
qui tam provisions similar to those
found in the FCA that do not conflict
with the requirements of section
1909(b)(2) of the Act. However, if such
provisions are more restrictive than the
provisions in the FCA, OIG may
determine that a State law is not as
effective in rewarding or facilitating qui
tam actions. OIG will make such
determinations on a case-by-case basis
and in consultation with DOJ.
C. Seal Provisions
Under section 1909(b)(3) of the Act, a
State law must contain a requirement
for filing an action under seal for 60
days with review by the State Attorney
General. When evaluating whether a
State law meets the requirements of
section 1909(b)(3) of the Act, OIG will
consider whether the law provides a
provision that requires the complaint to
be filed in camera and to remain under
seal for at least 60 days. In addition, OIG
will consider whether the State law’s
seal provisions operate in a way that
conflict with the Federal seal in a
pendant FCA case.
D. Civil Penalty Provisions
Under section 1909(b)(4) of the Act,
the State law must contain a civil
penalty that is not less than the amount
of the civil penalty authorized under 31
U.S.C. 3729. OIG will review a State law
to determine if these provisions include
a provision that sets at least treble
damages (or double damages in
instances of timely self-disclosure and
full cooperation) and civil penalties at
amounts of at least $5,000 to $10,000
per false claim.2
IV. OIG Procedures for Reviewing State
False Claims Acts
As noted above, the effective date of
section 1909 of the Act is January 1,
2007. A State that, as of January 1, 2007,
2 DOJ is authorized to adjust the civil penalties
under the FCA for inflation and has issued
regulations that raise the FCA penalties. See Public
Law 101–410, 104 Stat. 890 (Oct. 5, 1990); 28 CFR
85.3. However, the statutory provisions of the FCA
identify the range of civil penalties as $5,000 to
$10,000, and OIG will review State laws based on
those statutory provisions.
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has a law in effect that meets the
enumerated requirements shall be
deemed in compliance with such
requirements for so long as the law
continues to meet such requirements.
With the publication of these
guidelines, OIG will accept requests for
review of State laws to determine if they
meet the requirements of section
1909(b) of the Act. In order to request
OIG review of a State law, the State
Attorney General’s office should submit
a complete copy of the State law, or any
other relevant information, to the
following address: Office of Inspector
General, Department of Health and
Human Services, Cohen Building, Mail
Stop 5527, 330 Independence Avenue,
SW., Washington, DC 20201, Attention:
Roderick Chen, Office of Counsel to the
Inspector General.
Submissions by telecopier, facsimile,
or other electronic media will not be
accepted. OIG will review the State law
under these guidelines and in
consultation with DOJ, and inform the
State Attorney General’s office in
writing whether the State law meets the
requirements of section 1909(b) of the
Act.
Dated: August 16, 2006.
Daniel R. Levinson,
Inspector General.
[FR Doc. E6–13749 Filed 8–18–06; 8:45 am]
BILLING CODE 4150–04–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
Recovery Plan for the Chittenango
Ovate Amber Snail
Fish and Wildlife Service,
Interior.
ACTION: Notice of document availability:
final revised recovery plan.
AGENCY:
SUMMARY: We, the Fish and Wildlife
Service (Service), announce availability
of a final revised recovery plan for the
endangered Chittenango ovate amber
snail (Novisuccinea chittenangoensis).
The final plan incorporates comments
received during the public and peer
review period and updates the
objectives, criteria, and actions for
recovering this endangered species.
ADDRESSES: A copy of the revised plan
may be requested by contacting the Fish
and Wildlife Service’s New York Field
Office (NYFO), 3817 Luker Road,
Cortland, New York 13045. Copies will
also be available for downloading from
the NYFO’s Web site at https://
www.fws.gov/northeast/nyfo/es/
recoveryplans.htm, and from the
E:\FR\FM\21AUN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 161 (Monday, August 21, 2006)]
[Notices]
[Pages 48552-48554]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-13749]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of OIG's Guidelines for Evaluating State False Claims
Acts
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: Under section 1909 of the Social Security Act (the Act), 42
U.S.C. 1396h, the Inspector General of the Department of Health and
Human Services is required to determine, in consultation with the
Attorney General, whether a State has in effect a law relating to false
or fraudulent claims submitted to a State Medicaid program that meets
certain enumerated requirements. If the Inspector General determines
that a State law meets these requirements, the State medical assistance
percentage, with respect to any amounts recovered under a State action
brought under such a law, shall be increased by 10 percentage points.
This notice sets forth the Inspector General's guidelines for
evaluating whether a State law meets the requirements of section 1909
of the Act.
DATES: Effective Date: These guidelines are effective on August 21,
2006.
FOR FURTHER INFORMATION CONTACT: Roderick T. Chen, Office of Counsel to
the Inspector General, (202) 401-4134, or Joel Schaer, Office of
External Affairs, (202) 619-0089.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1909 of the Act, added by section 6031 of the Deficit
Reduction Act of 2005 (Pub. L. 109-171), creates a financial incentive
for States to enact legislation that establishes liability to the State
for individuals or entities that submit false or fraudulent claims to
the State Medicaid program. This incentive takes the form of an
increase in the State's share of any amounts recovered from a State
action brought under a qualifying law.\1\ In order for a State to
qualify for this incentive, the State law must meet certain enumerated
requirements, as determined by the Inspector General of the Department
of Health and Human Services in consultation with the Attorney General.
---------------------------------------------------------------------------
\1\ The increase results from a 10-percentage point decrease in
the Federal share of any recovery from a State action brought under
a qualifying law.
---------------------------------------------------------------------------
Medicaid, authorized under Title XIX of the Act, 42 U.S.C. 1396-
1396v, is a joint Federal and State program that pays for medical and
other related benefits provided to needy beneficiaries. States that
participate in Medicaid administer their own programs within broad
Federal guidelines and receive matching funds from the Federal
government. The Federal share generally varies between 50 percent and
83 percent, depending on the State per capita income.
False or fraudulent claims presented to State Medicaid programs by
participating providers and others may give rise to civil liability
under the Federal False Claims Act (FCA), 31 U.S.C. 3729-3733. Under
the FCA, any person who knowingly submits a false or fraudulent claim
to a State Medicaid program is liable to the Federal Government for
three times the amount of the Federal Government's damages plus
penalties of $5,000 to $10,000 for each false or fraudulent claim. Any
recovery of damages to the State Medicaid program will be shared with
the State in the same proportion as the State's share of the costs of
the Medicaid program. For example, if a State's Medicaid share is 40
percent, then the State would be entitled to receive 40 percent of the
damages and the Federal Government would retain 60 percent of the
damages.
Under the qui tam provisions of the FCA, private persons (known as
relators) may file lawsuits in Federal court against individuals and/or
entities that defraud the Federal government by filing false or
fraudulent Medicaid claims. The Department of Justice (DOJ) has an
opportunity to investigate the relator's allegations, and DOJ may
intervene and take over the prosecution of the action. If DOJ chooses
not to intervene, the relator has the right to conduct the action. In
general, with respect to recoveries of Federal damages and penalties in
cases in which DOJ has intervened, the relator is entitled to between
15 and 25 percent of the recovery of Federal damages and penalties
depending upon the extent to which the relator substantially
contributed to the case. In general, the relator is entitled to between
25 and 30
[[Page 48553]]
percent of any recoveries of Federal damages and penalties if DOJ has
not intervened in the case. Because the FCA applies only to false
claims against the Federal Government, the relator is not entitled to a
share of the State portion of a Medicaid recovery under the FCA.
Many States have enacted their own false claims acts that establish
civil liability to the State for individuals and entities that submit
false or fraudulent claims to the State Medicaid program. Generally,
these laws include qui tam provisions that reward relators with a share
of the State portion of recoveries in cases of Medicaid fraud.
Currently, if a State obtains a recovery as the result of a State
action relating to false or fraudulent claims submitted to its Medicaid
program, it must share the damages recovered with the Federal
Government in the same proportion as the Federal Government's share in
the cost of the State Medicaid program. For example, if a State's
Medicaid share is 40 percent, then the State would retain 40 percent of
any damages recovered from an individual or entity that has defrauded
Medicaid, and the Federal Government would be entitled to the remaining
60 percent of damages.
II. Section 1909 of the Social Security Act
In order to encourage States to pursue Medicaid fraud, Congress
added a new section 1909 to the Act, effective January 1, 2007. Under
this section, if a State has in effect a State false claims act that
meets certain enumerated requirements, the Federal medical assistance
percentage will be decreased by 10 percentage points with respect to
any amount recovered under a State action brought under such a law.
Therefore, the State's share of any recovery in an action under such a
law will be increased by 10 percentage points. For example, if a State
has a qualifying State false claims act and the State's Medicaid share
is 50 percent, the State would be entitled to 60 percent of the amount
of the recovery, while the Federal Government would receive the
remaining 40 percent.
Section 1909(b) of the Act requires the Inspector General to
determine, in consultation with the Attorney General, whether a State
has in effect a false claims act that meets the following requirements:
1. The law must establish liability to the State for false or
fraudulent claims described in 31 U.S.C. 3729 with respect to any
expenditure described in section 1903(a) of the Act;
2. The law must contain provisions that are at least as effective
in rewarding and facilitating qui tam actions for false or fraudulent
claims as those described in 31 U.S.C. 3730-3732;
3. The law must contain a requirement for filing an action under
seal for 60 days with review by the State Attorney General; and
4. The law must contain a civil penalty that is not less than the
amount of the civil penalty authorized under 31 U.S.C. 3729.
A State that, as of January 1, 2007, has a law in effect that meets
the enumerated requirements shall be considered in compliance with such
requirements so long as the law continues to meet such requirements.
The effective date of section 1909 of the Act is January 1, 2007.
Thus, a State with a law in effect that meets the enumerated
requirements will qualify for a 10 percentage point increase in its
share of any amounts recovered from a State action brought under the
law if the recovery is received on or after January 1, 2007. A State
may enact a law before, on, or after January 1, 2007. Furthermore, the
action that gives rise to the recovery may be commenced before, on, or
after January 1, 2007. As long as the State's law meets the enumerated
requirements on or after January 1, 2007, and the recovery from the
action brought under the qualifying law is received by the State on or
after January 1, 2007, the State will qualify for a 10 percent increase
in its share of the amount recovered.
It is important to note that section 1909 of the Act does not
require a State to have in effect a false claims act or to enact a
false claims act that meets these minimum requirements. States may
choose not to enact false claims acts, or may choose to enact false
claims acts that do not meet the enumerated requirements. However, a
State that does not have such a law in effect will not qualify for the
10 percentage point increase in its share of any recoveries from an
action brought under such a law.
III. OIG Guidelines for Evaluating State False Claims Acts
Section 1909(b) of the Act sets forth four requirements that a
State law must meet if the State is to qualify for the 10 percentage
point increase in any State Medicaid share recovered under the law. The
Inspector General is required to determine, in consultation with the
Attorney General, whether a State law meets these requirements. After
reviewing section 1909 of the Act and consulting with DOJ, OIG has
developed guidelines to use in evaluating whether a State law meets the
enumerated requirements. It is important to note that these guidelines
are not model statutory provisions. OIG is not requiring any specific
language to be included in State false claims acts. Rather, the
guidelines reflect the provisions relevant to OIG's review of whether a
State law meets the requirements of section 1909(b) of the Act.
A. Liability for False or Fraudulent Claims
Under section 1909(b)(1) of the Act, the State law must establish
liability to the State for false or fraudulent claims described in 31
U.S.C. 3729, with respect to any expenditure described in section
1903(a) of the Act. Section 1903(a) of the Act describes expenditures
related to State Medicaid plans, including all expenditures for medical
assistance under a State Medicaid plan. When evaluating a State law to
determine whether it meets the requirements of section 1909(b)(1) of
the Act, OIG will consider whether the law provides for the following:
1. Liability to the State for false or fraudulent claims with
respect to Medicaid program expenditures, including:
Knowingly presenting, or causing to be presented, a false
or fraudulent claim for payment or approval to the Medicaid program;
Knowingly making, using, or causing to be made or used, a
false record or statement to get a false or fraudulent claim paid or
approved by the Medicaid program;
Conspiring to defraud the Medicaid program by getting a
false or fraudulent claim allowed or paid;
Knowingly making, using, or causing to be made or used, a
false record or statement to conceal, avoid, or decrease an obligation
to pay or transmit money or property to the Medicaid program.
2. Definitions for the terms ``knowing'' and ``knowingly'' meaning
that a person, with respect to information: (a) Has actual knowledge of
the information; (b) acts in deliberate ignorance of the truth or
falsity of the information; or (c) acts in reckless disregard of the
truth or falsity of the information. In addition, no proof of specific
intent to defraud should be required.
B. Qui Tam Provisions
Under section 1909(b)(2) of the Act, a State law must contain
provisions that are at least as effective in rewarding and facilitating
qui tam actions for false or fraudulent claims as those described in 31
U.S.C. 3730-3732. When evaluating a State law to determine whether it
meets the requirements of section 1909(b)(2) of the Act, OIG will
consider
[[Page 48554]]
whether the law provides for the following:
1. A provision that authorizes a person (relator) to bring a civil
action for a violation of the State false claims act for the person and
for the State, which will be brought in the name of the State.
2. A provision that requires a copy of complaint and written
disclosure of material evidence and information to be served on the
State Attorney General in accordance with State Rules of Civil
Procedure.
3. A provision that provides that when a relator brings a qui tam
action, no person other than the State may intervene or bring a related
action based on the facts underlying the pending action.
4. Provisions that set forth rights of parties to qui tam actions,
including:
If the State proceeds with the action, the State has
primary responsibility in the action, but the relator shall have the
right to continue as a party to the action; and
If the State elects not to proceed with the action, the
relator may conduct the action but the State may intervene at a later
date upon a showing of good cause.
5. Provisions that reward a relator with a share of the proceeds of
the action or settlement of the claim, including:
If the State proceeds with an action brought by the qui
tam relator, the relator receives at least 15 percent of the proceeds
of the action or settlement of the claim, and may receive a higher
percentage depending on the relator's contribution to the prosecution
of the action;
If the State does not proceed with an action, the relator
receives at least 25 percent of the proceeds of the action or
settlement, and may receive a higher percentage depending on the
relator's contribution to the prosecution of the action; and
The court is authorized to award the relator an amount for
reasonable expenses, including attorneys' fees and costs, to be awarded
against the defendant.
6. A statute of limitations period not shorter than 6 years after
the date of the violation is committed, or 3 years after the date when
facts material to the right of action are known or reasonably should
have been known by the State official charged with the responsibility
to act in the circumstances, whichever occurs last.
7. A provision that establishes the burden of proof, for each of
the elements of the cause of action including damages, no greater than
a preponderance of the evidence.
8. A provision that provides a cause of action for relators who
suffer retribution from employers for whistleblower activities related
to the State false claims act.
OIG is required to consider whether the State law is at least as
effective in rewarding and facilitating qui tam actions when compared
to the provisions at 31 U.S.C. 3730-3732. State false claims acts may
include procedural rights, reductions in relator awards, jurisdictional
bars, and other qui tam provisions similar to those found in the FCA
that do not conflict with the requirements of section 1909(b)(2) of the
Act. However, if such provisions are more restrictive than the
provisions in the FCA, OIG may determine that a State law is not as
effective in rewarding or facilitating qui tam actions. OIG will make
such determinations on a case-by-case basis and in consultation with
DOJ.
C. Seal Provisions
Under section 1909(b)(3) of the Act, a State law must contain a
requirement for filing an action under seal for 60 days with review by
the State Attorney General. When evaluating whether a State law meets
the requirements of section 1909(b)(3) of the Act, OIG will consider
whether the law provides a provision that requires the complaint to be
filed in camera and to remain under seal for at least 60 days. In
addition, OIG will consider whether the State law's seal provisions
operate in a way that conflict with the Federal seal in a pendant FCA
case.
D. Civil Penalty Provisions
Under section 1909(b)(4) of the Act, the State law must contain a
civil penalty that is not less than the amount of the civil penalty
authorized under 31 U.S.C. 3729. OIG will review a State law to
determine if these provisions include a provision that sets at least
treble damages (or double damages in instances of timely self-
disclosure and full cooperation) and civil penalties at amounts of at
least $5,000 to $10,000 per false claim.\2\
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\2\ DOJ is authorized to adjust the civil penalties under the
FCA for inflation and has issued regulations that raise the FCA
penalties. See Public Law 101-410, 104 Stat. 890 (Oct. 5, 1990); 28
CFR 85.3. However, the statutory provisions of the FCA identify the
range of civil penalties as $5,000 to $10,000, and OIG will review
State laws based on those statutory provisions.
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IV. OIG Procedures for Reviewing State False Claims Acts
As noted above, the effective date of section 1909 of the Act is
January 1, 2007. A State that, as of January 1, 2007, has a law in
effect that meets the enumerated requirements shall be deemed in
compliance with such requirements for so long as the law continues to
meet such requirements.
With the publication of these guidelines, OIG will accept requests
for review of State laws to determine if they meet the requirements of
section 1909(b) of the Act. In order to request OIG review of a State
law, the State Attorney General's office should submit a complete copy
of the State law, or any other relevant information, to the following
address: Office of Inspector General, Department of Health and Human
Services, Cohen Building, Mail Stop 5527, 330 Independence Avenue, SW.,
Washington, DC 20201, Attention: Roderick Chen, Office of Counsel to
the Inspector General.
Submissions by telecopier, facsimile, or other electronic media
will not be accepted. OIG will review the State law under these
guidelines and in consultation with DOJ, and inform the State Attorney
General's office in writing whether the State law meets the
requirements of section 1909(b) of the Act.
Dated: August 16, 2006.
Daniel R. Levinson,
Inspector General.
[FR Doc. E6-13749 Filed 8-18-06; 8:45 am]
BILLING CODE 4150-04-P
