The Texas False Claims Act (Explained Simply): The Whistleblower's Guide to The Supplemental Medicaid Safeguards

Texas False Claims: Supplemental Medicaid Provision (Information and Rewards)

(The Secret Weapon Used to Fight Waste, Abuse and Fraud Against The State of Texas)

The Federal False Claims Act applies to any company or individual who receives payments from the US Government. These payments can be for services, products or devices.

Since the law has been such a success at combating fraud nationally, States have also adopted their own versions to protect public funds.

Texas put false claim laws into place in 1995 modeled after that Federal False Claim Act. In Texas these laws apply directly to the State’s Medicaid programs only.

The State’s Medicaid programs are designed to help lower income families and individuals afford healthcare, medical devices and prescriptions drugs.

The Texas Medicaid Fraud Prevention Act (TMFPA) allows Texans to take action against those individuals or companies making false claims for payment under Texas’s Medicaid program.

Understanding TMFPA before coming forward with a qui tam action on behalf of the State of Texas it is important.

Knowledge of the Federal FCA, Texas’s differences, the benefits/protections provided to people who expose fraud, and how the TMFPA Act works will strengthen your claims.

 

 

 

Have Knowledge of Fraud?

Yes No

Keep reading to learn how people are rewarded for whistleblowing to help fight fraud.

 

 

Understanding the Federal False Claims Act (Quick Review)

Texas’s False Claim Act is limited compared to the Federal version. The following is a brief review of the Federal FCA that summarizes what you need to know before looking at the differences. (Go here to read the Lawsuit Legal guide to the Federal False Claims Act)

• The Federal False Claims Act provides comprehensive protection and rewards for relators.
• Federal FCA has a qui-tam section allowing whistleblowers to bring lawsuits against persons or entities knowingly defrauding the Government.
• Penalties for defendants are trebled (3 times) the amount of damages to the Government. Fines range between $5000-$21,563 per violation.
• Plaintiffs who file a lawsuit properly and first can expect 15%-30% of the recovered funds

The success of the Federal False Claims Act prompted the State of Texas to enact its own version in 1995. There is a major difference between the Federal and Texas versions of this important whistleblower law…

TMFPA vs. Federal FCA (1 Major Difference)

If you are wondering what is different about the False Claims Act in Texas, it can be summarized with one major difference. Texas whistleblowers can only file a qui tam lawsuit for fraud committed against Texas’s State Medicaid programs.

The Federal Act allows for broader prosecution of fraudulent actions committed against any Government program. For example, Medicare fraud, Tax Fraud and Government Contracts.

While this is the most obvious difference, Texas has also added some unique provisions that further differentiate it from the Federal statute.

Specific Differences (FCA vs TMFPA)

Larger Penalties for Injury

Both have penalties from $5,500 to $11,000 for each fraud violation. Texas has expanded this to include additional fines for unlawful actions that result in injuries to the elderly, the disabled or to minors. These additional penalties range from $5,000 to $15,000 per violation.

Time for Sealed qui tam records

FCA qui tam complaints remain sealed for 60 days. Texas seals the records for 180 days. In either case however prosecutors can extend the seal if they have good cause to do so.

Available Remedies

Damages are not a part of TMFPA claims. Texas is not obligated to prove payments or benefits received through fraudulent actions are an overpayment or are damages. Defendants are liable to the State for double (2x) the entire amount received.

 

Unlike the FCA, the TMFPA is geared specifically toward fighting Medicaid fraud in Texas.

While this is different both Acts do share similarities. Learn how to become a whistleblower here. An insider is encouraged to review what they know with their attorney who will be able to determine if their case has merit under the State or Federal False Claims Act and how to proceed.

The Texas FCA Similarities to the Federal Law

An important part of all false claim laws are it’s qui tam provisions. Both Texas and the Federal government have similar protections and rewards for individuals who report Medicaid violations.

 

Are Texas Medicaid Whistleblowers Protected?

Yes.

Texas has a Whistleblower Protection Act. Employees, contractors and agents who are terminated, suspended, threatened, transferred, demoted, harassed or discriminated against are entitled to:

• Two times (2x) back pay
• Full reinstatement to previous position
• Compensation of special damages including attorney’s fees and case costs resulting from discrimination
• Interest for backpay

Attorney Tip: These protections exist but the time to report is short. Also, employer retaliation must be proven. There must be a link between the employer’s retaliation and the reporting of Medicaid violations. You can read more on how to prove whistleblower retaliation here.

Relators are protected under both the Federal and Texas false claims acts. The rewards are similar as well.

 

 

Do Texas Medicaid Whistleblowers Receive Rewards for Reporting Fraud?

Yes. The amount is based on the total recovered by the State and how the case was pursued.

If the Texas Attorney General’s office intervenes on your behalf, relators are entitled up to 15%-25% of the recovered sum.

Sometimes the State declines and does not join the case on your behalf. Just like the Federal FCA, you and your legal representation are allowed to pursue the case on your own.

A successful self-fought case will allow for two additional benefits:

• Increased rewards. 25%-30% of the recovered sum is awarded.
• Reimbursement of legal expenses. You will receive repayment for reasonable attorney’s fees and other costs approved by the court.

Attorney Tip: While you receive a lesser percentage of rewards when the Texas Attorney General’s office intervenes, it is a good thing. This means your case is strong and you now have the assistance of the Texas Government. Settlements are higher in these cases.

Texas also has an award for just reporting and not pursuing legal action under the TMFPA.

An individual whose reporting leads directly to the recovery of funds gained through Medicaid fraud can receive up to 5% of the administrative penalty. The State commission will determine the value of the reporting and if it leads directly to the recovery of funds.

Individuals not wanting to get caught up in legal actions can report Medicaid violations anonymously.

The TMFPA had these two provisions (protections & rewards) as part of the original Act. One that was recently changed was the time available to file a qui tam action in the State of Texas.

 

Is There a Statute of limitations for Qui Tam Claims in Texas?

Yes, there is now, and it is exactly the same as the Federal False Claims Act.

Prior to 2013 there was no time limit to file a claim for Texas Medicaid fraud. In September 2013 the Act was amended to follow FCA rules.

The statute of limitations on false claims can be confusing. This is because the time to file is based on when actions happened or when they became known and not on a specific time frame.

Qui tam actions must be filed:

• within 6 year of the unlawful act (alleged false claim) or...
• within 3 years of when facts about the case should have been known or...
• Within a maximum time limit of 10 years of the purported false claim - whichever transpired last

Attorney Tip: Don’t wait and don’t try to it figure out. Waiting to file only devalues your claims. Assuming you figured it out can also result in case dismissal and a loss of evidence. Consult with a qualified qui tam attorney to protect your rights and increase your rewards for free.

Texas applying time limits to Medicaid qui tam claims is a good thing. This pushes individuals to report faster and helps avoid increased financial damages to the State.

 

Can anyone file a Medicaid Claim in Texas?

Yes, anyone can file but the assistance of an attorney is recommended.

In Texas, public employees can also file and are protected under the Texas Whistleblower Act. ^[1]

The protection public employees are provided is similar to those of the general public.

• Injunctive relief
• Full reinstatement to previous position
• Compensation for lost wages
• Recovery of benefits and rights
• Damages
• Attorney’s fees and court costs

Those caught-up in Medicaid fraud and participated can also report. Individuals who participate willingly in defrauding the State can still receive rewards.

The State will determine an employee’s level of involvement verse the information provided. In most cases they will receive a reduced award since they were culpable.

In any case properly filing is important. Information presented to the government under oath will become evidence that the Attorney General can pursue.

They can also compel you to file and present additional evidence. Having an attorney to properly file and represent you is essential.

TMFPA Lawsuit Process in Texas

Where do you file cases under the TMFPA?

• State False Claim Actions are filed in the Court of Travis County

 

What is the process of claims in Texas?

• Once a qui-tam action is filed in circuit court an official copy of the complaint will be sent to the Texas Attorney General.
• The Attorney General’s Office will decide whether to intervene on behalf of the State (or not). This should occur within 180 days after they receive the material evidence and information. They can request additional time if needed.

Texas aggressively pursues fraudulent Medicaid actions. Since 2000 the Texas Medicaid Fraud Prevention Act (Texas False Claims) has helped recover more than $2 billion in State funds.

Recently recovering over $235 million from the Xerox Corporation, Conduent Inc and other parties for fraudulent actions against Texas’s Medicaid program. ^[7]

A relator in this case could have received up to 25% of this recovery if the evidence they provided leads to financial recovery.