Action Alert: Stop bounty hunter provisions in false claims acts

In response to the federal Deficit Reduction Act (DRA) of 2005, a number of states have filed various forms of false claims acts in order to increase the amount of money recovered from Medicaid fraud. To receive a 10% increase in Medicaid recoveries, the DRA requires states to enact false claims acts with “qui tam” provisions. These provisions enable whistleblowers to file lawsuits in the name of the state alleging Medicaid fraud, claim a bounty (15-25%) from any proceeds recovered for the state and recover attorney’s fees and expenses from the defendant.

The Kentucky Chamber agrees the state should recover fraudulent claims. However, creating such lucrative financial incentives to file lawsuits against employers is not the most effective way to pursue claims. Moreover, the federal False Claims Act and three Kentucky statutes already enable the state to recover money lost to false Medicaid claims. In fact, through these measures, the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse Control has recovered $154 million for the Medicaid program since January 2008 without having to pay a dime to whistleblowers.

Despite these legal avenues, two false claims acts have been filed in the General Assembly and both contain qui tam provisions that incentivize lawsuits and require the state to share a portion of its recoveries with whistleblowers. While SB 11 (Jensen) remains stalled in the House, HB 4 (Stumbo) is expected to be heard by the Senate Judiciary Committee this week. HB 4 is similar to SB 11 but includes all state funds and is not limited to Medicaid, which would expand the scope of employer liability even more. Additionally, the House bill contains no repercussions for plaintiffs that file frivolous claims. Please contact Senate Republican and Democratic leadership at 1-800-372-7181 and urge them to oppose HB 4. Leadership includes the following members:

Sen. David L. Williams, President
Sen. Katie Kratz Stine, President Pro Tem
Sen. Robert Stivers, Majority Floor Leader
Sen. Dan Seum, Majority Caucus Chairman
Sen. Carroll Gibson, Majority Whip

Sen. R.J. Palmer, Minority Floor Leader
Sen. Johnny Ray Thompson, Minority Caucus Chairman
Sen. Jerry Rhoads, Minority Whip