June 8, 2016, Introduced by Senators HERTEL and SCHUITMAKER and referred to the Committee on Health Policy.
A bill to amend 1977 PA 72, entitled
"The medicaid false claim act,"
by amending sections 2, 7, 10a, 10c, and 12 (MCL 400.602, 400.607,
400.610a, 400.610c, and 400.612), as amended by 2008 PA 421.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Benefit" means the receipt of money, goods, or anything
of pecuniary value.
(b)
"Claim" means any attempt to cause the department of
community
health to pay out sums of money under the social welfare
act.request or demand made for a Medicaid payment,
whether under
contract or otherwise, for money or property that is either of the
following:
(i) Presented to an officer, employee, or agent of the state.
(ii) Made to a contractor, grantee, or other recipient if the
money or property requested or demanded is used on the state's
behalf or to advance a state program or interest and the state
provides or has provided any portion of the money or property
requested or demanded or will reimburse the contractor, grantee, or
other recipient for any portion of the money or property.
(c) "Department" means the department of health and human
services.
(d) (c)
"Deceptive" means making
a claim or causing a claim to
be made under the social welfare act that contains a statement of
fact or that fails to reveal a fact, which statement or failure
leads the department to believe the represented or suggested state
of affair to be other than it actually is.
(e) (d)
"False" means wholly or
partially untrue or deceptive.
(f) (e)
"Health facility or
agency" means a health facility or
agency,
that term as defined in section 20106 of the public health
code, 1978 PA 368, MCL 333.20106.
(g) (f)
"Knowing" and
"knowingly" means mean
that a person is
in possession of facts under which he or she is aware or should be
aware of the nature of his or her conduct and that his or her
conduct
is substantially certain to cause the payment of a medicaid
Medicaid benefit. Knowing or knowingly includes acting in
deliberate ignorance of the truth or falsity of facts or acting in
reckless disregard of the truth or falsity of facts. Proof of
specific intent to defraud is not required.
(h) "Material" means to have a natural tendency to influence,
or be capable of influencing, the payment or receipt of money or
property.
(i) (g)
"Medicaid benefit" means
a benefit paid or payable
under a program for medical assistance for the medically indigent
in accordance with the social welfare act.
(j) "Obligation" means an established duty, whether or not
fixed, arising from an express or implied contractual, grantor-
grantee, or licensor-licensee relationship, from a fee-based or
similar relationship, from statute or regulation, or from the
retention of any overpayment.
(k) "Original source" means either of the following:
(i) An individual who, before public disclosure, voluntarily
disclosed to the state or the department the information on which
the allegation or transaction in a claim is based.
(ii) An individual who has knowledge that is independent of
and materially adds to the publicly disclosed allegation or
transaction, and who has voluntarily provided the information to
the state or the department before filing an action.
(l) (h)
"Person" means an
individual, corporation,
association, partnership, or other legal entity.
(m) (i)
"Social welfare act"
means the social welfare act,
1939 PA 280, MCL 400.1 to 400.119b.
Sec. 7. (1) A person shall not make or present or cause to be
made
or presented to an employee or officer of this state a claim
under
the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b,
upon or against the state, knowing the claim to be false.
(2) A person shall not make or present or cause to be made or
presented
a claim under the social welfare act , 1939 PA 280, MCL
400.1
to 400.119b, that he or she knows
falsely represents that the
goods or services for which the claim is made were medically
necessary in accordance with professionally accepted standards.
Each claim violating this subsection is a separate offense. A
health facility or agency is not liable under this subsection
unless
the health facility or agency, pursuant according to a
conspiracy, combination, or collusion with a physician or other
provider, falsely represents the medical necessity of the
particular goods or services for which the claim was made.
(3) A person shall not knowingly make, use, or cause to be
made
or used a false record or statement material
to conceal,
avoid,
or decrease an obligation to pay or
transmit money or
property to the state pertaining to a claim presented under the
social welfare act or knowingly conceal or knowingly and improperly
avoid or decrease an obligation to pay or transmit money or
property to the state pertaining to a claim presented under the
social welfare act.
(4)
A person who that violates this section is guilty of a
felony punishable by imprisonment for not more than 4 years or a
fine of not more than $50,000.00, or both.
Sec. 10a. (1) Any person may bring a civil action in the name
of this state under this section to recover losses that this state
suffers from a violation of this act. A suit filed under this
section shall not be dismissed unless the attorney general has been
notified and had an opportunity to appear and oppose the dismissal.
The attorney general waives the opportunity to oppose the dismissal
if it is not exercised within 28 days of receiving notice.
(2) If a person other than the attorney general initiates an
action under this section, the complaint shall remain under seal
and the clerk shall not issue the summons for service on the
defendant until after the time for the attorney general's election
under subsection (3) expires. At the time of filing the complaint,
the person shall serve a copy of the complaint on the attorney
general and shall disclose, in writing, substantially all material
evidence and information in the person's possession supporting the
complaint to the attorney general.
(3) The attorney general may elect to intervene in an action
under this section. Before the expiration of the later of 90 days
after service of the complaint and related materials or any
extension of the 90 days that is requested by the attorney general
and granted by the court, the attorney general shall notify the
court and the person initiating the action of 1 of the following:
(a) That the attorney general will proceed with the action for
this state and have primary responsibility for proceeding with the
action.
(b) That the attorney general declines to take over the action
and the person initiating the action has the right to proceed with
the action.
(4) If an action is filed under this section, a person other
than the attorney general shall not intervene in the action or
bring another action on behalf of this state based on the facts
underlying the action.
(5) If the attorney general elects to proceed with the action
under subsection (3) or (6), the attorney general has primary
responsibility for prosecuting the action and may do all of the
following:
(a) Agree to dismiss the action, notwithstanding the objection
of the person initiating the action, but only if that person has
been notified of and offered the opportunity to participate in a
hearing on the motion to dismiss.
(b) Settle the action, notwithstanding the objection of the
person initiating the action, but only if that person has been
notified of and offered the opportunity to participate in a hearing
on the settlement and if the court determines that the settlement
is fair, adequate, and reasonable under the circumstances. Upon a
showing of good cause, the settlement hearing may be held in
camera.
(c) Request the court to limit the participation of the person
initiating the action. If the attorney general demonstrates that
unrestricted participation by the person initiating the action
during the litigation would interfere with or unduly delay the
attorney general's prosecution of the case or would be repetitious,
irrelevant, or unduly harassing, the court may do any of the
following:
(i) Limit the number of the person's witnesses.
(ii) Limit the length of the testimony of the person's
witnesses.
(iii) Limit the person's cross-examination of witnesses.
(iv) Otherwise limit the person's participation in the
litigation.
(6) If the attorney general notifies the court that he or she
declines to take over the action under subsection (3), the person
who initiated the action may proceed with the action. At the
attorney general's request and expense, the attorney general shall
be provided with copies of all pleadings filed in the action and
copies of all deposition transcripts. Notwithstanding the attorney
general's election not to take over the action, the court may
permit the attorney general to intervene in the action at any time
upon a showing of good cause and, subject to subsection (7),
without affecting the rights or status of the person initiating the
action.
(7) Upon a showing, conducted in camera, that actions of the
person initiating the action during discovery would interfere with
the attorney general's investigation or prosecution of a criminal
or civil matter, the court may stay the discovery for not more than
90 days. The court may extend the stay upon a further showing that
the attorney general is pursuing the investigation or proceeding
with reasonable diligence and the discovery would interfere with
the ongoing investigation or proceeding.
(8) As an alternative to an action permitted under this
section, the attorney general may pursue a violation of this act
through any alternate remedy available to this state, including an
administrative proceeding. If the attorney general pursues an
alternate remedy, a person who initiated an action under this
section shall have equivalent rights in that proceeding to the
rights that the person would have had if the action had continued
under this section to the extent consistent with the law governing
that proceeding. Findings of fact and conclusions of law that
become final in an alternative proceeding shall be conclusive on
the parties to an action under this section. For purposes of this
subsection, a finding or conclusion is final if it has been finally
determined on appeal to the appropriate court, if the time for
filing an appeal with respect to the finding or conclusion has
expired, or if the finding or conclusion is not subject to judicial
review.
(9) Subject to subsections (10) and (11), if a person other
than the attorney general or the attorney general prevails in an
action that the person initiates under this section, separate from
any monetary proceeds awarded under this act, the court shall award
the person necessary expenses, costs, reasonable attorney fees,
and, based on the amount of effort involved, the following
percentage of the monetary proceeds resulting from the action or
any settlement of the claim:
(a) If the attorney general intervenes, not less than 15% to
25%.
(b) If the attorney general does not intervene, not less than
25% to 30%.
(10)
If Unless opposed by the
attorney general, if the court
finds
an action under this section to be is not based primarily on
information disclosure of specific information that was not
provided
by the person bringing the action, such as but is based
primarily
on disclosure of specific information from
relating to an
allegation or transaction in a state criminal, civil, or
administrative
hearing in a which the state or federal department
or
agency, its agent is a party,
a state legislative or other state
report, hearing, audit, or investigation, or the news media, and
the attorney general proceeds with the action, the court may award
the person bringing the action no more than 10% of the monetary
recovery in addition to reasonable attorney fees, necessary
expenses, and costs.
(11) If the court finds that the person bringing an action
under this section planned and initiated the conduct upon which the
action is brought, then the court may reduce or eliminate, as it
considers appropriate, the share of the proceeds of the action that
the person would otherwise be entitled to receive. A person who is
convicted of criminal conduct arising from a violation of this act
shall not initiate or remain a party to an action under this
section and is not entitled to share in the monetary proceeds
resulting from the action or any settlement under this section.
(12)
A In no event may a person other than the attorney
general
shall not bring an action under
this section that is based
on allegations or transactions that are the subject of a civil suit
or an administrative civil money penalty proceeding to which this
state
or the federal government is already a party. The court shall
dismiss an action brought in violation of this section.
(13) Unless the person is the original source of the
information, a person, other than the attorney general, shall not
initiate an action under this section based upon the public
disclosure of allegations or transactions in a criminal, civil, or
administrative hearing, in a state or federal legislative,
investigative, or administrative report, hearing, audit, or
investigation,
or from the news media. The person is the original
source
if he or she had direct and independent knowledge of the
information
on which the allegations are based and voluntarily
provided
the information to the attorney general before filing an
action
based on that information under this section.
(14) This state and the attorney general are not liable for
any expenses, costs, or attorney fees that a person incurs in
bringing an action under this section. Any amount awarded to a
person initiating an action to enforce this act is payable solely
from the proceeds of the action or settlement.
(15) If a person proceeds with an action under this section
after being notified that the attorney general has declined to
intervene
and the court finds that the claim was frivolous, as
defined
in section 2591 of the revised judicature act of 1961, 1961
PA
236, MCL 600.2591, clearly
frivolous, clearly vexatious, or
brought primarily for the purpose of harassment, the court shall
award the prevailing defendant actual and reasonable attorney fees
and expenses and, in addition, shall impose a civil fine of not
more than $10,000.00. The civil fine shall be deposited into the
Michigan
medicaid Medicaid benefits trust fund established in
section 5 of the Michigan trust fund act, 2000 PA 489, MCL 12.255.
(16) For the purpose of the statute of limitations, any
government complaint in intervention, whether filed separately or
as an amendment to the relator's complaint, shall relate back to
the filing date of the relator's complaint, to the extent that the
claim of the government arises out of the conduct, transaction, or
occurrence set forth, or attempted to be set forth, in the
relator's complaint.
(17) Any information obtained by the attorney general or his
or her designee under this section may be shared with any qui tam
realtor if the attorney general or designee determines it is
necessary as part of a Medicaid false claims act investigation.
Sec. 10c. (1) An employer shall not discharge, demote,
suspend, threaten, harass, or in any other manner, discriminate
against an employee, contractor, or agent, in the terms and
conditions of employment because the employee, contractor, or
agent, engaged in lawful acts, including initiating, assisting in,
or participating in the furtherance of an action under this act or
because the employee, contractor, or agent, cooperates with or
assists in an investigation under this act. This prohibition does
not apply to an employment action against an employee or agent or
an action relating to a contract for a contractor who the court
finds
brought a frivolous claim, as defined in section 2591 of the
revised
judicature act of 1961, 1961 PA 236, MCL 600.2591; claim
that was clearly frivolous, clearly vexatious, or brought primarily
for the purpose of harassment; the court finds to have planned and
initiated the conduct upon which the action is brought; or is
convicted of criminal conduct arising from a violation of this act.
(2)
An employer who A person
that violates this section is
liable to the employee, contractor, or agent for all of the
following:
(a) Reinstatement to the employee's or agent's position
without loss of seniority or reinstatement or renewal of the
contract.
(b) Two times the amount of lost back pay or in the case of a
contractor, 2 times the amount of the damages arising from the
breach of contract.
(c) Interest on the back pay or in the case of a contractor,
interest on the damages arising from the breach of contract.
(d) Compensation for any special damages, including reasonable
attorney fees and litigation costs.
(e) Any other relief necessary to make the employee,
contractor, or agent, whole.
(3) A civil action under this subsection may not be brought
more than 3 years after the date when the retaliation occurred.
Sec. 12. (1) A person who receives a benefit that the person
is not entitled to receive by reason of fraud or making a
fraudulent statement or knowingly concealing a material fact, or
who engages in any conduct prohibited by this statute, shall
forfeit and pay to the state the full amount received, and for each
claim
a civil penalty of not less than $5,000.00 $5,500.00 or more
than
$10,000.00 $11,000.00 plus triple the amount of damages
suffered by the state as a result of the conduct by the person.
(2) The penalties under this section may be adjusted for
inflation in the same manner as provided for federal penalties
under the federal civil penalties inflation adjustment act of 1990,
Public Law 101-410.
(3) (2)
A criminal action need not be
brought against the
person for that person to be civilly liable under this section.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.