Maryland enacts state False Claims Act, likely fails to meet Deficit Reduction Act criteria

by Ben Vernia | April 19th, 2010

On April 13, Maryland Governor Martin O’Malley signed into law the Maryland False Health Claims Act of 2010. The law creates a cause of action for submitting false health claims similar to that of the federal False Claims Act, but falls short of satisfying the requirements of the Deficit Reduction Act, as interpreted by the OIG-HHS in its published guidance for reviewing state acts’ compliance with that law.

Most notably, the Maryland law provides for maximum fines of $10,000 per violation and treble damages, but these represent maximum amounts, with judges given several factors to consider in granting penalties up to $10,000 and damages greater than single damages.

In addition, under Maryland’s new law, if the state declines to intervene in a whistleblower’s case, the court must dismiss it. The court may, but is not required to award attorney’s fees and costs to a whistleblower in a prevailing case.

For these differences, it seems likely that Maryland’s law would fail to obtain OIG-HHS’s approval, which is necessary for the state to qualify for the Deficit Reduction Act’s 10% increase in state shares of Medicaid recoveries.

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