A perfect 10: the Deficit Reduction Act of 2005 provides incentive for Florida to amend its own False Claims Act Legislation.

• Author: Igel, Michael A.

False claims lawsuits have long been a nemesis of medical providers and those who represent them, while simultaneously offering whistleblowers in the health care field the prospect of substantial financial reward for bringing qui tam actions. (1) Recent federal legislation gave the State of Florida an opportunity to receive increased revenue from successful false claim prosecutions in exchange for strengthening the state False Claims Act. Florida failed to satisfy federal standards in its initial attempt to amend its False Claims Act, but has since enacted simple amendments to existing Florida law that should remedy this defect. The changes will likely boost state false claims lawsuits, a development of which practitioners should be aware.

Congress has long provided a cause of action against medical providers who make false claims for reimbursement from federally funded programs. Under the federal False Claims Act, anyone who knowingly submits a false or fraudulent claim to a state Medicaid program must pay three times the federal government's damages plus penalties of $5,000 or $10,000 for each false or fraudulent claim. (2) On February 1, 2006, Congress provided an incentive for states to enact their own false claims legislation or improve existing legislation to emulate federal standards by passing [section] 6031 of the Deficit Reduction Act of 2005 (DRA). (3) When a state that has its own false claim law is victorious in a false claim prosecution, the state receives a share of the judgment equal to the percentage it contributes to its Medicaid program. (4) The DRA provides an incentive for states to pass their own legislation by stipulating that if a state's false claims legislation meets certain federally mandated standards, then the state is entitled to a 10 percent increase of any amount recovered in a false claims case brought under the state's False Claims Act. (5)

False Claims Act litigation generates a tremendous amount of money for the federal government. The Department of Justice recently announced that it recovered $3.1 billion in false claims awards in fiscal year 2006. (6) Over 70 percent of these recoveries were in health care cases, (7) and these numbers are likely to grow once Medicaid providers implement mandatory False Claims Act education for their employees. (8) States, then, are acting in their best interests by choosing to pass their own false claims laws in order to reap some of these huge economic benefits and to ensure that they no longer lose money to false medical claims.

Satisfaction of the requirements necessary to receive the bonus is no easy task. For a state to qualify for the incentive, its law must meet requirements detailed in [section] 6031(b) of the DRA. On August 21, 2006, the Office of the...