Civil Law

Re: 2009 House Bill 4117

bugman — Mon, 23 Mar 2009 15:45:58 GMT

is it the intent of this bill to force criminals to 'make whole' victims 15 times over, then to pay the claimant? we already have laws against theft.

Re: 2009 House Bill 4117

qui tam — Mon, 23 Mar 2009 15:42:45 GMT

Not exactly---it incentivizes reports of false claims by compensating and protecting those who report and are demoted, ostracized and punished. Contractors being aware of the procedure will, and anecdotally has, deterred fraud. since most if not all false claims/qui tam actions are settled for statutory damages and fines far in excess of the amount "stolen," the government is made whole, to the extent that the funds are recovered, and the whistleblower is still paid a reward that comes, effectively, from the double or triple damages and fines assessed against the "bad" guys. Evidence suggests that the federal government, and most of the states with and Act, have recovered $15 for every dollar it costs to prosecute these cases. Not a bad deal?

Re: 2009 House Bill 4117

bugman — Mon, 23 Mar 2009 15:31:25 GMT

offering a claimant a 'piece of the action' disincentivizes false claims how?

Re: 2009 House Bill 4117

qui tam — Mon, 23 Mar 2009 14:54:18 GMT

Interesting. Under most False Claims Acts, the complaints stay sealed for anywhere from 60-120 days initially while the government investigates the Relator's allegations, checks computer records, interviews the Relator and witnesses, subpoenas evidence and may even execute a search warrant. Under the federal Act, the government can (and often does) request that the court extend the seal because the investigations, especially with large companies and frauds are very complicated and can take months, if not years, to develop. In some states, there is no right to extend and the government must decide to intervene (i.e., go forward with the lawsuit) or decline (leaving it up to the relator and her counsel to proceed or dismiss). If the government intervenes, the complaint and all further proceedings are unsealed land public like a regular lawsuit. If the government declines, the case may be unsealed and proceed with the government monitoring but participating only if it requests, or it may be unsealed (under seal or not--depending on the court's discretion).

Re: 2009 House Bill 4117

bugman — Mon, 23 Mar 2009 14:41:54 GMT

when do these 'sealed' complaints get to see the light of day? or do they ever?

Re: 2009 House Bill 4117

qui tam — Mon, 23 Mar 2009 13:57:29 GMT

First, this bill does not deal with waste in government, per se, but with the difficulty of effective oversight because of inexperienced, over-worked investigators and prioritization of resources.

Second, Michigan does have an effective Medicaid False Claims Act (which will entitle Michigan to the 10% increase in the federal share of Medicaid fraud recoveries as soon as the HHS-OIG approves our latest amendment) and this bill is merely expanding it to other areas of government funding. Both the House and Sen. Kuipers facilitated the passage of the Medicaid False Claims Act (and a recent amendment) so there isn't a partisan battle here...just priorities during a troublesome economic time. This bill is a little confusing and so it just takes some constructive comments and encouragement to get it moving, not rhetoric or personal attacks, frankly. I think that both parties and all legislators are in favor of stopping fraud.

Third, only 23 other states have Qui Tam type False Claims Acts and most are of recent vintage so Michigan is actually progressive and in the forefront.

Finally, there just is no empirical evidence that these acts encourage frivolous lawsuits. They protect whistleblowers and further a public-private partnership at little cost to the government.

Re: 2009 House Bill 4117

thepungentpundit — Mon, 23 Mar 2009 13:19:58 GMT

The Unmaking of a False Claims Act

Re: 2009 House Bill 4117

beverlytran — Sat, 21 Mar 2009 01:58:01 GMT

The end purpose is not to prevent a crowding of the courts, as it has been pointed out that these cases are filed under seal (thus dismissing the overcrowding myth); the end purpose is to create a more efficient government by empowering the people to complete the deficiencies of the status quo: fraudfeasor operations of the state and statutory constraints of the Attorney General.

Michigan is the one and only, yes, the very last state in the United States of America, that does not have an effective false claims act. This legislation would entitle Michigan to a 10% decrease in certain federal funding share formulas and allow the state to recoup an increase of 10% in recoveries.

Alas, the main contention that must be addressed is the concern of the multitude of cases that would be filed in the courts. If the opposition of this bill is so fearfully concerned about a stampede to the court house, then, just maybe, the opposition to this bill may want to stop for a moment and figure out why the court doors will be rammed down by masses of "original sources" to file thousands of these false claims cases. Let me give you a hint:

HINT: "It's called false claims....shhhh."

Beverly Tran

Re: 2009 House Bill 4117

qui tam — Fri, 20 Mar 2009 01:15:52 GMT

There are some 2000 SEALED complaints pending, none of which are clogging the courts sincethey are sealed and under investigation. Other than a semi-annual ex parte request by the government to extend the seal to continue the investigation, the courts are not involved. The delay is merely because of the hidden, complex nature of the frauds--concocted by the bad guys.

Actually, NYC, DC and 23 states have qui tam laws--because all of those jurisdictions have tremendous fraud and need all the help they can get. So far it doesn't look like Madoff ripped off the government, just private and charitable institutions. The FCAs deal with fraud against the government. Private entities and charities have other remedies--and are exercising them.

The FCA stopped Columbia-HCA, Merck-Medco, Quest, etc., etc. and will deal with Iraq fraud, tons of pharmaceutical fraud, etc.

Look at www.taf.org for all the information.

Re: 2009 House Bill 4117

uber-liberal — Thu, 19 Mar 2009 22:16:10 GMT

one would think that a seventy percent increase would bother some people. i'm sure that there are more than just 70 lawsuits pending in the courts system involving allegations of fraud. there are thousands, which is why it takes years. by the way, both new york and dc have qui tam laws. it didn't stop madoff.

Re: 2009 House Bill 4117

qui tam — Thu, 19 Mar 2009 19:11:54 GMT

Do you mean 70% in thses types of suits? After 1863, and then because of some legislative moves in 1943, the law was effectively gutted and suits where the government merely had "evidence" of the fraud in someone's government office, drawer, desk (like the Madoff information" that Harry Markopoulus sent in) the suits were barred no matter if the government was doing anything about it or not, whether the evidence was buried, etc. the changes eliminated this prohibition and barred such suits only if the information was "public"--like in the newspaper, in an actual investigation, criminal indictment, etc. (effectively prohibiting 'parasitic" suits)--but permnitting them if the whistleblower was an "Original Source" who had "direct and independent knowledge" and had voluntarily (ie., not because of a subpoena) broght it to the government before filing suits.

The jump was because the suits had been unfairly prevented before and we had $900 toilet seats floating around. further, when the Berlin Wall fell and the money flowed to health care, the thieves came out of the woodwork and started stealing from Medicare and Medicaid. Employees and doctors in the medical industry aren't as intimidated as those in the military.

Today, the spread is about 61% Health related and the rest military, roads, grants, education, etc.--wherever the governments money is or coming to (can you say "Stimulus?").

So a jump from one or two suits to 70 is not so large when there are 50 states, most with more than one federal District. Even 450 suits means only a few per state and they tend to take 4 or 5 years to fruition, settlement,e tc. Not a real burden on the courts when they are sealed during most of that time and only an investigation, not litigation is going on. In the end, the government "intervenes" (pursues) only 1 in 6--not because they are frivolous, but because the allegations don't pan out--sometimes information seems apparent but because of HIPAA etc. (the "true" facts indicate mistake, misinterpretation, etc.), the government doesn't want to screw with a powerful or important supplier and settles administratively, there is a bigger fish they want to fry, the defendant is so bad he/it doesn't have any money--he used the government contract like an ATM machine and spent all the money so a judgment and the time to get it would be fruitless, or other reasons.

Re: 2009 House Bill 4117

uber-liberal — Thu, 19 Mar 2009 18:50:30 GMT

just wondering about the seventy percent jump in the amount of federal lawsuits when those laws were put into effect. how many of them were without merit?

Re: 2009 House Bill 4117

qui tam — Thu, 19 Mar 2009 18:09:28 GMT

I disagree. The consequences of filing a frivolous suit here are severe and involve penalties in the Act, penalties under the Court Rules, the fact that the government can decline to intervene making the attorney go forward on her own at even greater expense and risk for sanctions and fees being assessed. In addition, once the initial suit is filed, the client will need to be interviewed by the government and false statement to the government are severely punished.

Under the federal False Claims Act --with similar incentives and protections--only some 400 or so suits are filed in the entire United States annually and yet over $25 Billion (used to be a lot of money) has been recovered since 1986 with untold hundreds of Billions deterred. I don't know more than one or two which have ever been dismissed or sanctioned as frivolous. The canard about frivolous lawsuits is just that and I hate them as much as you do.

Fraud is a bipartisan problem. That's why the federal Act was revised in 1986 at the co-sponsorship of Sen. Charles Grassley, Republican of Iowa and Rep. Howard Berman, Democrat of California and signed by President Ronald Reagan (Republican of California). Our Michigan Medicaid False Claims Act passed both Houses in 2005 almost unanimously after our Republican Attorney General, Mike Cox and Rep. David Law, Republican of Commerce, originally pushed for it and Democratic Governor, Jennifer Granholm signed it.

Currently a Democratic Representative of Dearborn, Gino Polidori has sponsored it, it was unanimously reported out of the House Judiciary Committee and unanimously passed by the House and is now before the Senate.

There isn't --and frankly, in my opinion, be--any opposition. Who can be "for" fraud?? The Attorney General likes it so there is no new burden on him and in the federal system, DOJ recovers $15 for every $1 spent on enforcement and prosecution! Truly.

I respect and understand your concern about more "lawsuits" but, on balance, that is a very small (if no) price to pay to protect the millions and billions being stolen.

Re: 2009 House Bill 4117

uber-liberal — Thu, 19 Mar 2009 17:31:48 GMT

qui tam:
There is too much work involved and too much effort needed to warrant attorneys filing frivolous suits..

i know several attorneys that would disagree.

i agree with you that is how this bill is SUPPOSED to work but with all the amendments and changes, it is starting to look less and less like a 'protection' law and more like a 'financial incentive' law. anytime you offer money for a certain service, you can bet you are going to get 'serviced' a lot, and not all of it will be honest.

Re: 2009 House Bill 4117

qui tam — Thu, 19 Mar 2009 17:03:52 GMT

The Bill is very clear, mirrors the federal False Claims Act which, since 1863 (and since it was strengthened in 1986) is the federal government's most effective fraud-fighting vehicle. HB 4117 recently passed the House unanaimously and is front of the Senate with virtually no opposition. Not only does it offer effective whistleblower protection, it has a stroing fiscal component and creates the opportunity for an effective public-private partnership that assists the fraud-fighters in the Attorney General's office with their very important duty to see that state funds are expended for meaningful, appropriate projects in the areas of Medicaid, social services, roads and business ventures.

With the Stimulus money comng here soon, the need for effective oversight is more evident.

While the bill does incentivize and encourge whistleblowing, it also punishes frivolous lawsuits and recognizes that the effect of reporting fraus is a courageous, often financially dangerous, undertaking and, thus, compensates the whistleblower for the risk.

No one should profit illegally at the expense of the taxpayer and this just sends that message to the fraudsters. The process assists the aG and other agencies because the private client and attorney vet and prepare the cases and file the complaints together with providing the AG with a complet set of documents and other evidence. What this does is clean out the AG's "inbox" of "hotline" (but usnsubstantiated) tips adn allows him or her to concentrate on the real, sytematic frausd (that actually form the business plans of the fraudsters).

There is too much work involved and too much effort needed to warrant attorneys filing frivolous suits..