H. B. 4015
(By Delegate Marshall)
[Introduced January 13, 2010; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact §9-7-2 and §9-7-6 of the Code of West
Virginia, 1931, as amended; and to amend said code by adding
thereto a new article, designated §9-7A-1, §9-7A-2, §9-7A-3,
§9-7A-4, §9-7A-5, §9-7A-6 and §9-7A-7, all relating to civil
actions based upon false or fraudulent claims against the
medical programs of the Department of Health and Human
Resources; providing definitions; defining acts which create
a basis for civil liability; creating a civil penalty for
those acts; allowing for reduced damages under certain
circumstances; creating a cause of action on behalf of the
Department of Health and Human Resources by a private citizen;
providing procedure for actions filed by private citizens;
providing compensation of private citizens bringing valid
actions on behalf of the Department of Health and Human
Resources; barring certain actions by private citizens; creating a private cause of action for employer retaliation
against a private citizen; specifying limitations on actions,
retroactivity of this legislation, burden of proof; and
adopting the legislative history behind the federal False
Claims Act §§31 U.S.C. 3729-3733.
Be it enacted by the Legislature of West Virginia:
That §9-7-2 and §9-7-6 of the Code of West Virginia, 1931, as
amended, be amended and reenacted; and that said code be amended by
adding thereto a new article, designated §9-7A-1, §9-7A-2, §9-7A-3,
§9-7A-4, §9-7A-5, §9-7A-6 and §9-7A-7, all to read as follows:
ARTICLE 7. FRAUD AND ABUSE IN THE MEDICAID PROGRAM.
§9-7-2. Definitions.
For the purposes of this article:
(1) "Assistance" means money payments, medical care,
transportation and other goods and services necessary for the
health or welfare of individuals, including guidance, counseling
and other welfare services and
shall include includes all items of
any nature contained within the definition of "welfare assistance"
in section two, article one of this chapter.
(2) "Benefits" means money payments, goods, services or any
other thing of value.
(3) "Claim" means an application for payment for goods or
services provided under the medical programs of the Department of
Welfare Health and Human Resources.
(4) "Medicaid" means that assistance provided under a state
plan implemented pursuant to the provisions of subchapter nineteen,
chapter seven, Title 42, United States Code, as that chapter has
been and may hereafter be amended.
(5) "Provider" means any individual or entity furnishing goods
or services under the medical programs of the Department of
welfare
Health and Human Resources.
(6) "Unit" means the Medicaid fraud control unit established
under section one of this article.
(7) "Person" includes any natural person, corporation, firm,
association, organization, partnership, business or trust.
(8) "Employer" includes all agencies and authorities.
(9) "Department" refers to the State's Department of Health
and Human Resources.
(10) "Knowing" or "knowingly" means that a person, with
respect to information, has actual knowledge of the information,
acts in deliberate ignorance of the truth or falsity of the
information, or acts in reckless disregard of the truth or falsity
of the information. Proof of specific intent to defraud is not
required.
§9-7-6. Civil remedies.
(a)
Any person, firm, corporation or other entity which
willfully, by means of a false statement or representation, or by
concealment of any material fact, or by other fraudulent scheme, devise or artifice on behalf of himself, itself, or others, obtains
or attempts to obtain benefits or payments or allowances under the
medical programs of the department of welfare to which he or it is
not entitled, or, in a greater amount than that to which he or it
is entitled, shall be liable to the Department of Welfare in an
amount equal to three times the amount of such benefits, payments
or allowances to which he or it is not entitled, and shall be
liable for the payment of reasonable attorney fees and all other
fees and costs of litigation. No person or other entity may:
(1) Knowingly present or cause to be presented to the medical
programs of the Department of Health and Human Resources a false or
fraudulent claim for payment or approval;
(2) Knowingly make, use or cause to be made or used, a false
record or statement to get a false or fraudulent claim paid or
approved by the medical programs of the Department of Health and
Human Resources;
(3) Conspire to defraud the medical programs of the Department
of Health and Human Resources by getting a false or fraudulent
claim allowed or paid;
(4) Possess, or have in the person or other entity's custody
or control, property or money used, or to be used by the medical
programs of the Department of Health and Human Resources and
knowingly deliver or cause to be delivered less property than the
amount for which the person received a certificate of receipt;
(5) Knowingly make or deliver a receipt that falsely
represents property used or to be used by the medical programs of
the Department of Health and Human Resources if the person or other
entity is authorized to make or deliver a document certifying
receipt of the property used or to be used;
(6) Knowingly buy, or receive as a pledge of an obligation or
debt, public property from an officer or employee of the medical
programs of the Department of Health and Human Resources, who
lawfully may not sell or pledge the property;
(7) Knowingly make, use, or cause to be made or used, a false
record or statement to conceal, avoid or decrease an obligation to
pay, repay or transmit money to the medical programs of the
Department of Health and Human Resources; or
(8) Fail to disclose a false claim to the Department of Health
and Human Resources within a reasonable time after discovery of a
false claim if that person or other entity is a beneficiary of an
inadvertent submission of a false claim to the medical programs of
the Department of Health and Human Resources and subsequently
discovers the falsity of the claim.
(b) Any person or other entity found in violation of any
provision of subsection (a) of this section is liable to the
Department of Health and Human Resources for a civil penalty of not
less than $5,000 and not more than $10,000 for each false or
fraudulent claim, plus an amount equal to three times the amount of the benefits, payments or allowances to which the person or entity
is not entitled, and is liable for the payment of reasonable
attorney fees and all other fees and costs of litigation.
(c) Notwithstanding subsection (b) of this section, the court
shall assess at least two times, but not more than three times the
amount of benefits, payments or allowances to which the person or
entity is not entitled, if the court finds the following:
(1) The person who commits the acts furnished the Attorney
General with all information known to the person about the acts
within thirty days after the date on which the person obtained the
information;
(2) The person fully cooperated with any investigation of the
acts by this state; and
(3) At the time the person furnished the Attorney General with
information about the violation, no criminal prosecution, civil
action, or administrative action had commenced with respect to the
violation, and the person did not have actual knowledge of the
existence of an investigation into the violation.
(b) (d) No criminal action or indictment need be brought
against any person, firm, corporation or other entity as a
condition for establishing civil liability
hereunder under this
section. Notwithstanding any other provision of law, a guilty
verdict rendered in a criminal proceeding charging false statements
or fraud, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, estops the defendant from denying the
essential elements of the offense in any action which involves the
same transaction as in the criminal proceeding and which is brought
under this section.
(c) (e) A civil action under this section may be prosecuted
and maintained on behalf of the Department of Health and Human
Resources by the Attorney General and his
or her assistants or a
prosecuting attorney and his
or her assistants or by any attorney
in contract with or employed by the Department of Health and Human
Resources to provide such representation.
(f) A private citizen may also bring a civil action under this
section as provided in article seven-a of this chapter.
(g) This section shall be liberally construed and applied to
promote the public interest. This section also adopts the
congressional intent behind the federal False Claims Act, 31 U.S.C.
§§3729-3733, including the legislative history underlying the 1986
Amendments to the federal False Claims Act.
ARTICLE 7A. CIVIL ACTIONS ON BEHALF OF THE DEPARTMENT OF WELFARE
BY PRIVATE CITIZENS,
§9-7A-1. Definitions.
(a) When used in this article, or in the administration of
this article, terms defined in section two, article seven of this
chapter have the meanings ascribed to them by that section, unless
a different meaning is clearly required by either the context in which the term is used, or by specific definition, in this article.
(b) As used in this article, "plaintiff" refers to a private
person or other entity who is bringing or has brought a civil
action on behalf of the Department of Health and Human Resources
under subsection (f), section six, article seven of this chapter.
§9-7A-2. Dismissal of actions; special procedures.
(a) Once filed, a civil action brought by a private person
under subsection (f), section six, article seven of this chapter of
the code may only be dismissed with written consent of the court,
taking into account the best interest of the parties involved and
the public purposes behind this article and article seven of this
chapter.
(b) A plaintiff bringing a civil action under subsection (f),
section six, article seven of this chapter shall follow the
following special procedures:
(1) A copy of the complaint and written disclosure of
substantially all material evidence and information the plaintiff
possesses shall be served on the Attorney General. The complaint
shall be filed in camera, shall remain under seal for at least
sixty days, and may not be served on the defendant until the court
so orders. The Attorney General may elect to intervene and proceed
with the action within sixty days after it receives the complaint,
material evidence and information.
(2) The Attorney General may, for good cause shown, move the court for extensions of the time during which the complaint remains
under seal. The motion or motions may be supported by affidavits
or other submissions in camera.
(3) When a plaintiff brings a valid action under subsection
(f), section six, article seven of this chapter, no person other
than the Attorney General may intervene or bring a related civil
action based on the facts underlying the pending civil action.
Before the expiration of the sixty-day period or any extensions
obtained under the preceding subsection, the Attorney General
shall:
(A) Proceed with the civil action, in which the civil action
shall be prosecuted by the Attorney General; or
(B) Notify the court that it declines to take over the civil
action, in which case the plaintiff has the right to proceed with
the civil action.
(4)The defendant is not required to respond to any complaint
filed under this section until after the complaint is unsealed and
served upon the defendant. The defendant is then required to
respond in accordance with Rule 12 of the West Virginia Rules of
Civil Procedure.
(c) If the Attorney General proceeds with the action, then
he or she has the primary responsibility for prosecuting the
action, and is not bound by an act of the plaintiff. The plaintiff
has the right to continue as a party to the action, subject to the following limitations:
(1) The Attorney General may seek to dismiss the action for
good cause notwithstanding the objections of the plaintiff if the
plaintiff has been notified by the Attorney General of the filing
of the motion and the court has provided the plaintiff with an
opportunity for a hearing on the motion.
(2) The Attorney General may settle the action with the
defendant notwithstanding the objections of the plaintiff if the
court determines, after a hearing providing the plaintiff an
opportunity to present evidence, that the proposed settlement is
fair, adequate and reasonable under all of the circumstances.
(3) Upon a showing by the Attorney General that unrestricted
participation during the course of the litigation by the plaintiff
would interfere with or unduly delay the Attorney General's
prosecution of the case, or would be repetitious, irrelevant or for
purposes of harassment, the court may, in its discretion, impose
limitations on the plaintiff's participation, such as:
(A) Limiting the number of witnesses the plaintiff may call;
(B) Limiting the length of the testimony of such witnesses;
(C) Limiting the plaintiff's cross-examination of witnesses;
or
(D) Otherwise limiting the participation by the plaintiff in
the litigation.
(4) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the plaintiff
would be for purposes of harassment or would cause the defendant
undue burden or unnecessary expense, the court may limit the
participation by the plaintiff in the litigation.
(d) If the Attorney General elects not to proceed with the
action, the plaintiff has the right to continue the action. If the
Attorney General so requests, it shall be served with copies of all
pleadings filed in the action and shall be supplied with copies of
all deposition transcripts at the Attorney General's expense. When
a plaintiff proceeds with the action, the court, without limiting
the status and rights of the plaintiff, may nevertheless permit the
Attorney General to intervene at a later date upon a showing of
good cause.
(e) Whether or not the Attorney General proceeds with the
action, upon a showing by the Attorney General that certain actions
of discovery by the plaintiff would interfere with the Attorney
General's investigation or prosecution of a criminal or civil
matter arising out of the same facts, the court may stay the
discovery for a period of not more than sixty days. Such a showing
shall be conducted in camera. The court may extend the sixty-day
period upon a further showing in camera that the Attorney General
has pursued the criminal or civil investigation or proceedings with
reasonable diligence and any proposed discovery in the civil action
will interfere with the ongoing criminal or civil investigation of proceedings.
(f) Notwithstanding subsection (a) of this section, the
Attorney General may elect to pursue the claim through any
alternate remedy available, including an administrative proceeding
to determine a civil money penalty. If an alternate remedy is
pursued in another proceeding, the plaintiff has the same rights in
that proceeding as the plaintiff would have had if the action had
continued under subsection (f), section six, article seven of this
chapter. Any finding of fact or conclusion of law made in the
other proceeding that has become final is conclusive on all parties
to an action under section six, article seven of this chapter. For
purposes of the preceding sentence, a finding or conclusion is
final if it has been finally determined on appeal to the
appropriate court of the state, if all time for filing the appeal
with respect to the finding or conclusion has expired, or if the
finding or conclusion is not subject to judicial review.
§9-7A-3. Compensation of private citizens bringing actions on
behalf of the Department of Health and Human Resources;
state not liable for certain expenses.
(a) Except as provided in subsections (b) and (e) of this
section, if the Attorney General proceeds with an action brought by
a plaintiff under subsection (f), section six, article seven of
this chapter, or the Attorney General pursues an alternate remedy
relating to the same acts under subsection (f), section two of this article, the plaintiff shall receive at least fifteen percent, but
not more than twenty-five percent of the proceeds of the action or
settlement of the claim, depending upon the extent to which the
plaintiff contributed to the prosecution of the action or claim.
(b) Except as provided in subsection (e) of this section, if
an action or claim is one in which the court or other adjudicator
finds to be based primarily upon disclosures of specific
information not provided by the plaintiff relating to allegations
or transactions specifically in a criminal, civil, or
administrative hearing, or in a legislative or administrative
report, hearing, audit, or investigation, or report made by the
news media, the court or other adjudicator may award an amount it
considers appropriate, but not more than ten percent of the
proceeds of the action or settlement of the claim, depending upon
the significance of the information and the role of the plaintiff
in advancing the prosecution of the action or claim.
(c) Except as provided in subsection (e) of this section, in
addition to any amount received under subsections (a) or (b) of
this section, a plaintiff shall be awarded his or her reasonable
expenses necessarily incurred in bringing the action together with
the person's costs and reasonable actual attorney fees. The court
or other adjudicator shall assess any award under this program
against the defendant.
(d) Except as provided in subsection (e) of this section, if the Attorney General does not proceed with an action or an
alternate proceeding under subsection (f), section two of this
article, the plaintiff shall receive an amount that the court
decides is reasonable for collection of the civil penalty and
damages. The amount may not be less than twenty-five percent, but
not more than thirty percent of the proceeds of the action and
shall be paid from the proceeds. In addition the person shall be
paid his or her expenses, costs and fees under subsection (c) of
this section.
(e) Whether or not Attorney General proceeds with the action
or an alternate proceeding under subsection (f), section two of
this article, if the court or other adjudicator finds that an
action was brought by a plaintiff who planned or initiated a
violation upon which the action or proceeding is based, then the
court may, to the extent that the court considers appropriate,
reduce the share of the proceeds of the action that the person
would otherwise receive under subsections (a), (b) or (d) of this
section, taking into account the role of the plaintiff in advancing
the prosecution of the action or claim and any other relevant
circumstance pertaining to the violation, except that if the
plaintiff is convicted of criminal conduct arising from his or her
role in a violation specified in article seven of this chapter, the
court or other adjudicator shall dismiss the person as a party and
the person may not receive any share of the proceeds of the action or claim or any expenses, costs and fees under subsection (c) of
this section.
(f) The state is not liable for any expenses incurred by a
private person in bringing an action under subsection (f), section
six, article seven of this chapter.
§9-7A-4. Certain actions barred.
(a) No court has jurisdiction over an action brought by a
plaintiff under subsection (f), section six, article seven of this
chapter against a state public official if the action is based upon
information known to the Attorney General at the time that the
action is brought.
(b) No person may bring an action under subsection (f),
section six, article seven of this chapter that is based upon
allegations or transactions that are the subject of a civil action
or an administrative proceeding to assess a civil forfeiture in
which the state is a party if that action or proceeding was
commenced prior to the date that the action is filed.
§9-7A-5. Private action for retaliation.
Any employee who is discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against
in the terms and conditions of employment by his or her employer
because of lawful acts done by the employee on behalf of the
employee or others in furtherance of an action under this
subsection (f), section six, article seven of this chapter, including investigation for, initiation of, testimony for, or
assistance in an action filed or to be filed under that subsection,
is entitled to all relief necessary to make the employee whole.
The relief shall include reinstatement with the same seniority
status the employee would have had but for the discrimination, two
times the amount of back pay, interest on the back pay, and
compensation for any special damages sustained as a result of the
discrimination, including litigation costs and reasonable
attorneys' fees. An employee may bring an action in the
appropriate court of this state for the relief provided in this
subsection.
§9-7A-6. Limitation of actions; retroactivity; burden of proof.
(a) A civil action under subsection (f) section six, article
seven of this chapter may not be brought more than ten years after
the date on which the violation was committed. A civil action
under that subsection may be brought for activity that occurred
before the effective date of this article if the limitations period
has not lapsed.
(b) In any action brought under subsection (f), section six,
article seven of this chapter, the Attorney General or the
plaintiff is required to prove all essential elements of the cause
of action, including damages, by a preponderance of the evidence.
§9-7A-7. Liberality of legislative construction and adoption of
legislative history.
This article shall be liberally construed and applied to
promote the public interest. This article adopts the congressional
intent behind the federal False Claims Act, 31 U.S.C. §§3729-3733,
including the legislative history underlying the 1986 Amendments to
the federal False Claims Act.
NOTE: The purpose of this bill is to modify existing law
concerning civil remedies for false claims against the medical
programs of the Department of Health and Human Resources, and to
adopt the congressional intent behind the federal False Claims Act,
31 U.S.C. §§3729-3733.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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