Medicaid fraud recovery.

WORKING DRAFT
2011
STATE OF
WYOMING
11LSO-0536.E1

SENATE FILE
NO.
SF0145

Medicaid fraud recovery.

Sponsored by:
Senator(s) Peterson, Dockstader, Meier and Perkins and Representative(s) Miller

A BILL

for

AN ACT relating to
Medicaid; creating the Wyoming Medicaid False Claims Act; authorizing civil recoveries
for the state and persons reporting false claims as specified
;

prescribing duties of the attorney general; providing procedures; providing for a limitations period and applicability of the act;
providing definitions; prescribing criminal penalties as specified for failure to maintain required records;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 42
‑
4
‑
301
through

42
‑
4
‑
30
6

are
created to read:

ARTICLE 3
FALSE MEDICAID CLAIMS

42
‑
4
‑
301.

Short title
.

This act shall be known and may be cited as the
"
Wyoming
Medicaid
False Claims Act
.
"

42
‑
4
‑
302.

Definitions.

(a)

As used in this act:

(i)

"
Claim
"

means any request or demand under the Medicaid program, whether under a contract or otherwise, for money or property and whether or not the
United States
has title to the money or property, that:

(A)

Is presented to an officer, employee or agent of the
United States
; or

(B)

Is made to a contractor, grantee or other recipient, if the money or property is to be spent or used on the
state
's behalf or to advance a
state
program or interest, and if the
state
:

(I)

Provides or has provided any portion of the money or property requested or demanded; or

(II)

Will reimburse the contractor, grantee or other recipient for any portion of the money or property which is requested or demanded; and

(C
)

Is not a request or demand for money or property that the
state
has paid to an individual as compensation for federal employment or as an income subsidy with no restriction on that individual's use of the money or property.

(ii)

"
Knowing
"
and
"
knowingly
"
mean that a person, with respect to information, and with or without specific intent to defraud:

(
A
)

Has actual knowledge of the information
;

(
B
)

Acts in deliberate ignorance of the truth or falsity of the information
; or

(
C
)

Acts in reckless disregard of the truth or falsity of the information.

(iii)

"Material" means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property;

(iv)

"Obligation" means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee or licensor-licensee relationship, from a fee based or similar relationship, from statute or regulation or from the retention of any overpayment;

(v)

"Original source" means an individual who:

(A)

Prior to a public disclosure
,
has voluntarily disclosed to the
state
the information on which allegations or transactions in a claim are based; or

(B)

Who has knowledge that is independent of an
d
materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the
state
before filing an action under W.S. 42
‑
4
‑
304.

(v
i
)

"This act" means W.S. 42
‑
4
‑
301 through 42
‑
4
‑
306.

42
‑
4
‑
303.

Acts subjecting person to treble damages; costs and civil penalties; exceptions.

(a)

Any person who commits any of the following acts
in relation to the Wyoming Medical Assistance and Services Act
shall be liable to the
state
for three
(3)
times the amount of damages which the
state
sustains because of the act of that person. A person who commits any of the following acts shall also be liable to the
state
for the costs of a civil action brought to recover any of those penalties or damages, and shall be liable to the
state
for a civil penalty of not less than
five thousand dollars (
$5,000
.00)
and not more than
ten thousand dollars (
$10,000
.00)
for each violation:

(
i
)

Knowingly presents or causes to be presented a false or

fraudulent claim for payment or approval
;

(
ii
)

Knowingly makes
or

uses
,
or
causes to be made or used,

a false record or statement
material to a false or fraudulent claim;

(
iii
)

Conspires to
commit a violation of paragraph
(i), (ii), (iv), (v), (vi) or (vii) of this subsection;

(
iv
)

Has possession,
custody
or
control of public property

or money used or to be used by the
state
and knowingly

delivers or causes to be delivered less
than all of that money or property
;

(
v
)

Is authorized to make or deliver a document certifying

receipt of property used or to be used by the
state and, intending to defraud the state, makes or delivers a receipt without completely knowing that the information on the receipt is true;

(
vi
)

Knowingly buys, or receives as a pledge of an obligation

or debt, public property from
an officer or employee of the state
who lawfully

may
not sell or pledge the property;

(
vii
)

Knowingly makes,
uses
or
causes to be made or used,

a false record or statement
material to
an obligation to pay or transmit money or property to the

state

or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state.

(b)

Notwithstanding sub
section
(a)
of this section
, the

court may assess not less than two
(2)
times the amount of damages

which the
state
sustains because of the act of the person

described in that subdivision, and no civil penalty, if the court

finds all of the following:

(
i
)

The person committing the violation furnished

officials of the
state
who are responsible for investigating

false claims violations with all information known to that

person about the violation within
thirty (
30
)
days after the date on

which the person
first obtained the information;

(
ii
)

The person fully cooperated with any investigation by
the
state
;

(
iii
)

At the time the person furnished the
state
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
.

42
‑
4
‑
304.

Attorney general investigations and prosecutions; powers of prosecuting authority; civil actions by individuals as qui tam plaintiff and as private citizens; jurisdiction of courts.

(a)

The
attorney
general
shall
diligently investigate a
n alleged
violation under
W.S. 42
‑
4
‑
303(a)
.

In conducting an investigation, the attorney general shall
have the authority to conduct prefiling discovery as authorized by
federal False Claims Act,
31 U.S.C. 3730
.
If the
attorney general
finds that a person has violated or

is violating
W.S. 42
‑
4
‑
303(a)
, the
attorney general
may bring
a civil

action under this section against that person.

(b)

A person may bring a civil action for a violation of this

a
ct for the person and for the
state
in the name of the

state
, subject to the following:

(i)

The person bringing the action shall be referred to as

the qui tam plaintiff.
The action may be dismissed only if the court and the attorney general give written consent to the dismissal and their reasons for consenting;

(
ii
)

A copy of the complaint and written disclosure of substantially

all material evidence and information the person

possesses shall be served on the
a
ttorney
g
eneral.

The complaint shall
also
be filed in camera, shall remain

under seal for at least
sixty (
60
)
days, and shall not be served on

the defendant until
ordered by the court
. The
state
may

elect to intervene and proceed with the action within
sixty (
60
)

days after it receives both the complaint and the material

evidence and the information
;

(
iii
)

The
state
may, for good cause shown, move the court

for extensions of the time during which the complaint

remains under seal
.
The
motions

may be supported by affidavits or other submissions in

camera. The defendant shall not be required to respond to

any complaint filed under this section until after the complaint

is unsealed and served upon the defendant pursuant

to
the
Wyoming
rules of c
ivil
p
rocedure
;

(
iv
)

Before the expiration of the
sixty (
60
)
day period or any

extensions obtained under paragraph (
iii
)
of this subsection
, the
state
shall
p
roceed with the action, in which case the action

shall be conducted by the
state
,
or

n
otify the court that it declines to take over the

action, in which case the person bringing the action shall

have the right to conduct the action
;

(v
)

When a person brings a valid action under this subsection,

no person other than the
state
may intervene or bring

a related action based on the facts underlying the pending

action.

(c)

T
he parties to qui tam actions
shall have the following rights:

(
i
)

If the
state
proceeds with the action, it shall have the

primary responsibility for prosecuting the action, and shall

not be bound by an act of the person bringing the action.

The
person shall have the right to continue as a party to

the action, subject to the limitations set forth in paragraph

(ii) of this
subsection
;

(
ii
)

The
following shall apply
:

(A)

The state may seek to d
ismiss the action for good

cause notwithstanding the objections of the qui tam plaintiff

if the qui tam plaintiff has been notified by the
state

of the filing of the motion and the court has provided the

qui tam plaintiff with an opportunity
for a hearing on the motion;

(B)

The state may s
ettle the action with the defendant

notwithstanding the objections of the qui tam plaintiff if

the co
urt determines, after a hearing
, that the proposed settlement is fair, adequate and reasonable under all of the circumstances
. Upon a showing of good cause, a hearing under this subparagraph may be held in camera;

(
C
)

U
pon
a
showing by the state that
unrestricted

participation during the course of the litigation by the

person initiating the action would interfere with or

unduly delay the
state
'
s prosecution of the case, or would

be repetitious,
irrelevant
or
for purposes of harassment
;

t
he court
may, in its discretion, impose limitations on the

person
'
s participation, such as
:

(
I
)

L
imiting the number of witnesses the person may

call;

(
II
)

L
imiting the length of the testimony of
the
witnesses;

(
III
)

L
imiting the person
'
s cross-examination of witnesses;

or

(IV
)

O
therwise limiting the participation by the person

in the litigation.

(
D
)

Upon a showing by the defendant that unrestricted

participation during the course of the litigation by the

person initiating the action would be for purposes of

harassment or would cause the defendant undue burden

or unnecessary expense, the court may limit the participation

by the person in the litigation
.

(
i
ii
)

If the
state
elects not to proceed with the action, the

person who initiated the action shall have the right to

conduct the action. If the
state
so requests, it shall be

served with copies of all pleadings filed in the action and
, at the state
'
s expense,

shall be supplied with copies of all deposition transcripts.

When a person proceeds with the

action, the court, without limiting the status and rights of

the person initiating the action, may nevertheless permit

the
state
to intervene at a later date upon a showing of

good cause
;

(
iv
)

Whether or not the
state
proceeds with the action,

upon a showing by the
state
that certain actions of discovery

by the person initiating the action would interfere with

the
state
'
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 (
60
)
days.
The state
'
s
showing shall be conducted in camera. The court may

extend the
sixty (
60
)
day period upon a further showing in camera

that the
state
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 or proceedings
;

(
v
)

Notwithstanding subsection (b)
of this section
, the
state
may elect

to pursue its claim through any alternate remedy available

to the
state
, including any administrative proceeding to

determine a civil money penalty. If any alternate remedy

is pursued in another proceeding, the person initiating

the action shall have the same rights in
the
proceeding as

the
person would have had if the action had continued

under this section. Any finding of fact or conclusion of law

made in
the
other proceeding that has become final shall

be conclusive on all parties to an action under this section.

For purposes of the preceding sentence, a finding or conclusion

is final if it has been finally determined on appeal

to the
supreme
court, if all time for filing

an appeal with respect to the finding or conclusion

has expired or if the finding or conclusion is not subject to

judicial review.

(d)

A
qui tam plaintiff
may receive an award as follows:

(
i
)

If the
state
proceeds with an action brought by a

person under subsection (b)
of this section
,
the
person shall, subject to

the second sentence of this paragraph, receive at least
fifteen

percent
(15%)
but not more than
twenty-five percent (
25
%)
of the proceeds of

the action or settlement of the claim,

depending upon the extent to which

the person
or his counsel substantially contributed

to the prosecution of the action. Where the action is one

which the court finds to be based primarily on disclosures

of specific information
,
other than information provided

by the person bringing the action
,
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 from the news media,

the court may award such sums as it considers appropriate,

but in no case more than
ten
percent
(10%)
of the proceeds,

taking into account the significance of the information and

the role of the person bringing the action in advancing the

case to litigation. Any payment to a person under the first

or second sentence of this paragraph shall be made from

the proceeds.
The
person shall also receive an amount

for reasonable expenses which the court

finds to have been necessarily incurred, plus reasonable

attorneys
'
fees and costs.
The
expenses, fees and

costs shall b
e awarded against the defendant;

(
ii
)

If the
state
does not proceed with an action under

this section, the person bringing the action or settling the

claim shall receive an amount which the court decides is

reasonable for collecting the civil penalty and damages.

The amount shall be not less than
twenty-five
percent
(25%)
and not

more than
thirty
percent
(30%)
of the proceeds of the action or

settlement and shall be paid out of
the
proceeds. Such person shall

also receive an amount for reasonable expenses which the

court finds to have been necessarily

incurred, plus reasonable attorneys
'
fees and costs.
The
expenses, fees and costs shall be awarded against the

defendant
;

(
iii
)

Whether or not the
state
proceeds with the action, if

the court finds that the action was brought by a person

who planned and initiated the violation of
W.S. 42
‑
4
‑
303(a)
upon

which the action was brought, then the court may, to the

extent the court considers appropriate, reduce the share of

the proceeds of the action which the person would otherwise

receive under paragraph (
i
) or (
ii
) of this subsection,

taking into account the role of that person in advancing

the case to litigation and any relevant circumstances pertaining

to the violation. If the person bringing the action is

convicted of criminal conduct arising from
the person
'
s
role

in the violation of
W.S. 42
‑
4
‑
303(a)
, that person shall be dismissed

from the civil action and shall not receive any share of the

proceeds of the action. Such dismissal shall not prejudice

the right of t
he
state
to continue the action;

(
iv
)

If the
state
does not proceed with the action and the

person bringing the action conducts the action, the court

may award to the defendant its reasonable attorneys
'
fees

and expenses if the defendant prevails in the action and the

court finds that the claim of the person bringing the action

was clearly frivolous, clearly vexatious or brought primarily

for purposes of harassment.

(e)

This act shall not be construed to authorize:

(
i
)

A
n action brought

under
W.S. 42
‑
4
‑
30
4
(
b
)
against a member of the
state
legislative

branch, a member of the judiciary or a senior executive

branch official if the action is based on evidence or information

known to the
state
when the action was brought;

(
ii
)

A
n action under
W.S. 42
‑
4
‑
30
4
(
b
)
which is based upon allegations or transactions

which are the subject of a civil suit or an administrative

civil money penalty proceeding in which the
state
is
already a party;

(iii)

The court shall dismiss an action or claim under W.S. 42
‑
4
‑
304(b), unless opposed by the state, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed:

(A)

In a criminal, civil or administrative hearing in which the state or an agent of the state is a party;

(B)

In a legislative or administrative report, hearing, audit or investigation; or

(C)

By the news media, unless the action is brought by the attorney general or the person bringing the action is an original source of the information.

(f)

The
state

shall
not
be
liable

for expenses which a person incurs in bringing an action under

this section.

(g)

Any employee, contractor or agent shall be entitled to all relief necessary to make that employee, contractor or agent whole if that employee, contractor or agent is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop one (1) or more violations of this article. Relief under this subsection shall include reinstatement with the same seniority status that the employee, contractor or agent would have had but for the discrimination, two (2) times the amount of back pay, interest on the back pay and compensation for any special damages incurred as a result of discharge, demotion, suspension, threat, harassment or other discrimination including litigation costs and reasonable attorneys' fees. An action under this subsection may not be brought more than three (3) years after the date when the retaliation occurred.

42
‑
4
‑
305.

Limitation of actions
;
retroactivity; burden of proof.

(a)

A civil action under
W.S. 42
‑
4
‑
304
may

not be brought more than
six (6)
)
years after the date on which the

violation was committed
or more than three (3) years after the date when facts material to the right of action are known or reasonably should have been known by the official of the state charged with responsibility to act in the circumstances, whichever occurs last, provided that in no event shall a civil action be brought more than ten (10) years after the date on which the violation is committed
.

(
b
)

In any action brought under
W.S. 42
‑
4
‑
304
,

the
state
or the
qui tam

plaintiff shall be required to prove all

essential elements of the cause of action, including damages, by

a preponderance of the evidence.

(
c
)

If the state elects to intervene and proceed with an action brought under W.S. 42
‑
4
‑
304(b), the state may file its own complaint or amend the complaint of a person who has brought an action under W.S. 42
‑
4
‑
304(b) to clarify or add detail to the claims in which the state is intervening and to add any additional claims with respect to which the state contends it is entitled to relief. For statute of limitations purposes, the state pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim o
f
the state arises out of the conduct, transactions or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.

(
d
)

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 contender
e
, shall estop 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
W.S. 42
‑
4
‑
304
.

42
‑
4
‑
306.

Remedies under other laws; liberality of construction; adoption of legislative history.

(a)

The provisions of this
act
are

n
ot exclusive, and the remedies provided for in this
act
shall be

in addition to any other remedies provided for in any other law

or available under common law.

(
b
)

This
act
shall be liberally construed and

applied to promote the public interest.

Section
2
.

W.S. 42
‑
4
‑
102(a) by creating new paragraph
s
(xi)
and (xii)
and 42
‑
4
‑
111 by creating a new subsection (e) are amended to read:

42
‑
4
‑
102.

Definitions.

(a)

As used in this chapter:

(xi)

"
Intentional
"
means that a person, with respect to information, intended to act in violation of the law
;

(xi
i
)

"
Knowing
"
o
r
"
knowingly
"
includes intentional
or intentionally a
nd means that a person, with respect to information, acts:

(A)

With actual knowledge of the information;

(B)

In deliberate ignorance of the truth or falsity of the information; or

(C)

In reckless disregard of the truth or falsity of the information.

42
‑
4
‑
111.

Providing or obtaining assistance by misrepresentation; penalties.

(e)

A person who fails to maintain records in accordance with Medicaid program rules and requirements for medical assistance is guilty of:

(i)

A felony punishable by imprisonment for not more than ten (10) years, a fine of not more than ten thousand dollars ($10,000.00), or both, if the value of
related
medical assistance is one thousand dollars ($1,000.00) or more;

(ii)

A misdemeanor punishable by imprisonment for not more than six (6) months, a fine of not more than seven hundred fifty dollars ($750.00)
, or both, if the value of related medical assistance is less than one thousand dollars ($1,000.00).

Section
3
.

This act is effective July 1, 2011.

(END)

1
SF0145