April 14, 2011

OIG Finds Various State’s False Claims Acts, Including New York’s, To Be Noncompliant

The term “qui tam” comes from the latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, which means “[he] who sues in this matter for the king as [well as] for himself.”  In our legal system, qui tam actions are brought by private individuals, or whistleblowers, with knowledge of fraud against the government, who are permitted to stand in the shoes of the government and bring suit on its behalf.  Although qui tam actions were initially only available under a federal law called the False Claims Act, in 2005 the federal government gave states a significant financial incentive to pass their own false claims acts.  Under the 2005 Deficit Reduction Act, states with false claims acts that are at least as effective in rewarding and facilitating qui tam actions as the federal False Claims Act will have the ability to recover up to an additional 10% of any state share of fraud recoveries.

On March 21, 2011, the Office of the Inspector General (OIG) of Health and Human Services completed its review of various states’ false claims acts to determine compliance with the federal False Claims Act, which was amended in 2009 and 2010.  On this date, the OIG issued letters to state officials advising states of their law’s noncompliance and specifying the reasons for its determination.

Numerous states’ laws that were previously in compliance were found deficient and in need of changes.  For instance, the State of New York received this letter, detailing the ways in which the NY False Claims Act fails to measure up to the federal False Claims Act, as amended.  For states like New York that were previously in compliance, they will have until March 31, 2013 to make the requisite amendments.  New York will undoubtedly amend its statute and seek the OIG’s approval.

This post was contributed by Kurt E. Bratten.