SB 465 Authorizes individuals to sue for Medicaid fraud and modifies various provisions relating to the reporting and investigating of such fraud
Sponsor: Callahan
LR Number: 1835S.01I Fiscal Note:
Committee: Health and Mental Health
Last Action: 2/8/2007 - Second Read and Referred S Health and Mental Health Committee Journal Page: S228
Title: Calendar Position:
Effective Date: August 28, 2007

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Current Bill Summary


SB 465 - This act provides that any person may bring an action for Medicaid fraud on behalf of the person and the state. The person bringing the action must give a copy of the petition to the Attorney General, and must also disclose to the attorney general all material information in the person's possession. The petition shall be filed in camera, and shall remain under seal for at least 60 days, or until the state elects to intervene, whichever occurs first. Service of the petition shall not be made on the defendant until ordered by the court.

On behalf of the state, the Attorney General may elect to intervene and proceed with the action, not later than 60 days after the date the Attorney General received the petition and information. This deadline may be extended for good cause shown.

The court and the attorney general may consent to a dismissal of an action at any time during which the petition remains under seal. If the state intervenes, it shall have the primary responsibility for investigating and prosecuting the action, and is not bound by any act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to limitations. If the state elects not to intervene, the person initiating the action shall be entitled to conduct the action, but the state may request copies of all pleadings and deposition transcripts, at the state's expense. Even if the state elects not to intervene in the action during the specified time period, upon a showing of good cause, the court may allow the state to intervene at a later date.

No person other than the state may intervene or bring a related action based on the same underlying facts as an action brought under this section.

The state may limit the participation of the person who initiated the action if it finds that the person's participation would cause harassment, or would unduly delay investigation or prosecution of the action, or would be repetitious or irrelevant. Limitations may include, but are not limited to, limiting the number of witnesses, limiting length of testimony, and limiting cross-examination of witnesses.

Even if an action has been brought under this act, the state is free to pursue the claim through any alternate proceeding. The person bringing the initial action will have the same rights in an alternate proceeding as are provided by this act, and any final finding or conclusion in the alternate proceeding shall be conclusive on all parties to the initial action.

If the state intervenes, the person who initiated the action is entitled to at least fifteen but not more than twenty-five percent of the proceeds of any action brought under this section. If the state elects not to intervene, the person who initiated the action is entitled to at least twenty-five but not more than thirty percent of the proceeds of the action. If the court finds that the action is based primarily on information not provided by the person initiating the action, the court shall award the person no more than ten percent of the proceeds. If the court finds that the person bringing the action planned and initiated the violation on which the action is based, it may reduce the share of the proceeds to the extent it deems appropriate. However, any person convicted of a violation shall not be entitled to any share of the proceeds, and shall be dismissed from the action.

A person may not bring an action under this act that is based on allegations that are the subject of another civil suit or administrative penalty proceeding which has already commenced, and in which the state is a party.

A person may not bring an action under this act that is based on the public disclosure of allegations or transactions in a criminal or civil hearing, in a legislative or administrative report, hearing, audit, or investigation, or from the news media, unless the person bringing the action is the original source of such information.

The act also contains "whistle-blower" protections, providing that a person who is discharged, demoted, suspended, threatened, harassed, or in any way discriminated against in terms of employment due to a lawful act taken by the person in furtherance of an action for Medicaid fraud shall be entitled to reinstatement with the same seniority status, not less than two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as the result of such discrimination. A person may bring an action in the appropriate circuit court to redress such grievances.

An action brought under this section shall not be brought more than six years after the date on which the violation was committed, or three years after the date when facts material to the cause of action are known or reasonably known by the Attorney General's office or the Department of Social Services, whichever occurs last.

This act is substantially similar to SB 844 (2005).

ADRIANE CROUSE