Georgia False Medicaid Claims Act

By: Joel M. Androphy1Rachel Grier and Nisha Ghosh

Georgia’s version of the Federal False Claims Act (FCA)2 is the Georgia False Medicaid Claims Act (GFMCA).3 The statute was recently amended to look more like its federal counterpart. The changes became effective on July 1, 2012. Generally, the GFMCA models the federal FCA, although there are some differences.

1. LIABILITY AND DAMAGES PROVISIONS

An individual will generally be liable under the GFMCA for the same violations that trigger liability in the federal FCA.4 For example, an individual will be liable for knowingly presenting or causing the presentation of a false or fraudulent claim for payment or approval to the Georgia Medicaid program, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim.5 Similar to the federal FCA, the GFMCA explicitly excludes false tax claims.6 However, unlike the federal FCA, the GFMCA only covers fraudulent Medicaid claims.7

The damages provision in the GFMCA is identical to the statutory language of the federal FCA and allows for treble damages and civil penalties ranging from $5,500 to $11,000 per claim.8 In addition, the GFMCA follows the federal act and provides for the reduction of liability to twice the damages the state incurred if the defendant voluntarily discloses the violations within thirty days of obtaining the information, if there is no criminal, civil, or administrative action yet taken on the violation, and if the defendant cooperates with the investigation.9

2. PROCEDURAL ISSUES

a. General Procedural Provisions 

The GFMCA states that a civil suit may be brought by a “private person” on behalf of the state.10 Several of the other procedural provisions are the same as in the federal statute, including the sixty-day sealing requirement and the state’s right to request an extension of the seal upon a showing of good cause;11 the required written disclosure to the state of all material evidence in the relator’s possession;12 the state’s primary responsibility for litigating the action if it chooses to intervene and the right to limit the relator’s participation;13 and the state’s right to dismiss the case over the objection of the relator, as long as the state notifies the relator and provides an opportunity for a hearing.14 The government also has a right to settle the case despite the relator’s objections as long as the court determines that the settlement is “fair, adequate, and reasonable under all circumstances.”15 If the government declines to intervene, the relator may proceed with the litigation.16 However, unlike the federal FCA, the state can intervene at a later date for “any purpose,” regardless of a showing of good cause.17

The GFMCA, like the federal FCA, provides that the state or person bringing the suit must prove all the elements of the cause of action, including damages, by a preponderance of the evidence.18 Also, like the federal FCA, the state may explicitly request a stay of proceedings if discovery would interfere with the investigation of a criminal matter arising from the same facts and may also request an extension of the stay if it can show that it has pursued the matter with reasonable diligence.19

b. Statute of Limitations

The GFMCA provides a slightly different limitations period than its federal counterpart.20 Like the federal FCA, an action must be brought within six years after a violation of the statute occurred.21 However, the Georgia statute states that an action may not be brought more than four years from the date when the state knew or reasonably should have known of material facts of the violation, while the federal FCA states that an action may not be brought more than three years after the state knew or reasonably should have known of material facts of the violation.22 Both statutes provide that the action may not be brought later than ten years after the violation was committed.23 Also, like the post-FERA federal FCA,24 the GFMCA allows the state’s pleading to relate back to the filing date of the relator’s complaint for statute of limitations purposes if the state decides to intervene.25

3. JURISDICTIONAL BARS TO ACTIONS

a. First to File Bar 

Like its federal counterpart, the GFMCA provides jurisdictional bars to certain qui tam actions. The GFMCA contains a first to file bar and a bar26 against actions based on transactions or allegations that are the subject of another civil or administrative proceeding to which the government is already a party.27

b. Public Disclosure Bar

The GFMCA also contains a public disclosure bar that is similar to the federal FCA. The GFMCA prohibits a relator from bringing an action if it contains the same substantial allegations or transactions which were publicly disclosed

“(A) In any criminal, civil, or administrative hearing in which the State of Georgia or its employee, agent, or contractor is a party; (B) In a congressional, legislative, or other state or federal report, hearing, audit, or investigation; or (C) from the news media, unless the civil action is brought by the Attorney General or the person bringing the civil action is an original source of the information.”28

The GFMCA states that, in order to be an “original source,” the relator must have either 1) voluntarily disclosed the information to the state prior to the public disclosure or 2) have independent knowledge which materially adds to the publicly disclosed information and which the relator voluntarily provided to the state before filing the action.29 This is similar to the federal FCA language,30 which was amended in 2010 by the Patient Protection and Affordable Care Act (“the Affordable Care Act”).31

The previous version of the federal FCA required an original source to have “direct and independent knowledge.” In the amended version of the federal statute, the definition of “original source” was changed and now allows a person to qualify as an “original source” if that person discloses the information to the government before the public disclosure is made or if they have “knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions.”32 Also, in the amended version of the federal FCA, the court can only dismiss an action based upon a public disclosure if the government does not oppose the dismissal.33 In addition, qui tam actions based on public disclosures made in non-governmental civil litigation are not barred in the amended version of the federal statute.34 The state statute mirrors these changes.35

4. RETALIATION

The GFMCA, like its federal counterpart, protects whistleblowers from retaliation by their employers. The damages recoverable under the state statute are almost identical to those recoverable under the federal FCA.36 Damages include reinstatement with the same seniority status and all damages necessary to make the employee whole, such as double the amount of back pay, interest on the back pay, and special damages, including litigation costs and reasonable attorney’s fees.37

5. RELATOR’S SHARE

The relator’s recovery under the GFMCA is identical to the relator’s recovery under the federal FCA. If the state decides to intervene on an action, the relator is entitled to fifteen to twenty-five percent of the proceeds.38 If the state declines to intervene, the relator is entitled to twenty-five to thirty percent of the proceeds.39 The statute also allows for a recovery of reasonable attorney’s fees and costs.40 Like the federal FCA, the statute allows for a reduction of the award to not more than ten percent of the proceeds if the suit is based upon public disclosure and the relator is not an original source.41 Both statutes also allow a reduction of the award if the relator “planned and initiated” the violation.42 If the relator is convicted of criminal conduct due to his role in the fraud, the relator shall be dismissed from the civil action and will not share in the proceeds.43 The GFMCA allows a successful defendant to recover reasonable attorney’s fees and expenses if the suit was filed for purposes of harassment or if the suit was clearly frivolous or vexatious.44

 

  1. Author of treatise,Federal False Claims Act and Qui Tam Litigation, Law Journal Press (2010), research source of the issues discussed in this article.
  2. 31 U.S.C. §§ 3729- 3733.  Federal False Claims Act.
  3. Ga. Code Ann. §§ 49-4-168 to 49-4-168.6.  Georgia False Medicaid Claims Act.
  4. Ga. Code Ann. § 49-4-168.1(a).
  5. Id.
  6. Ga. Code Ann. § 49-4-168.2(k). Compare 31 U.S.C. § 3729(d).
  7. Ga. Code Ann. § 49-4-168(1).
  8. Ga. Code Ann. § 49-4-168.1(a).  Compare 31 U.S.C. § 3729(a). The civil penalties under the federal FCA have now been raised to $5,500 and $11,000 to account for inflation.  See Chapter 4, supra, for further discussion of this issue.
  9. Ga. Code Ann. § 49-4-168.1(b).
  10. Ga. Code Ann. § 49-4-168.2(b).
  11. Ga. Code Ann. §§ 49-4-168.2(c)(2)-(3).
  12. Ga. Code Ann. § 49-4-168.2(c)(1).
  13. Ga. Code Ann. §§ 49-4-168.2(d)(1) & (4).
  14. Ga. Code Ann. § 49-4-168.2(d)(2).
  15. Ga. Code Ann. § 49-4-168.2(d)(3).
  16. Ga. Code Ann. § 49-4-168.2(f).
  17. Id.  Compare § 31 U.S.C. § 3730(c)(3).
  18. Ga. Code Ann. § 49-4-168.3(a).  Compare 31 U.S.C. § 3730(c)(4).  The federal FCA states only that the “United States” must prove all elements by a preponderance of the evidence).
  19. Ga. Code Ann. § 49-4-168.2(f).
  20. Ga. Code Ann. § 49-4-168.5.  Compare 31 U.S.C. § 3731(b).
  21. Id.
  22. Id.
  23. Id.
  24. Fraud Recovery and Enforcement Act, Pub. L. No. 111-21.  § 4, 123 Stat. 1623 (May 20, 2009).
  25. Ga. Code Ann. § 49-4-168.3(c).  See also, 31 U.S.C. 3731(c).
  26. Ga. Code Ann. § 49-4-168.2(c)(6).
  27. Ga. Code Ann. § 49-4-168.2(j).
  28. Ga. Code Ann. § 49-4-168.2(l)(2).
  29. Ga. Code Ann. § 49-4-168.2(l)(1).
  30. 31 U.S.C. § 3730(e)(4)(B).
  31. Patient Protection and Affordable Care Act (“the Affordable Care Act”), Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010).
  32. Pub. L. No. 111-148, § 1303(j)(2), 124 Stat. 119 (March 23, 2010), amending 31 U.S.C. §3730(e)(4).
  33. Id.
  34. Id.  Actions based on public disclosures are only barred if they are made in a criminal, civil, or administrative hearing in which the government is a party
  35. Ga. Code Ann. § 49-4-168.2(l).
  36. Ga. Code Ann. § 49-4-168.4(b).  See also,31 U.S.C. § 3730(h).
  37. Id.
  38. Ga. Code Ann. § 49-4-168.2(i)(1).
  39. Ga. Code Ann. § 49-4-168.2(i)(2).
  40. Ga. Code Ann. §§ 49-4-168.2(i)(1)-(2).
  41. Ga. Code Ann. § 49-4-168.2(i)(1).
  42. Ga. Code Ann. § 49-4-168.2(i)(3).
  43. Id.
  44. Ga. Code Ann. § 49-4-168.2(i)(4).

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