History Acts 1993 No 1299 9
20-77-911. Reward for the detection and punishment of Medicaid fraud.
The court is authorized to pay a person sums, not exceeding ten percent of the aggregate penalty recovered, as it may deem just, for information the person may have provided which led to the detecting and bringing to trial and punishment persons guilty of violating the Medicaid fraud laws.
Upon disposition of any civil action relating to violations of this subchapter in which a penalty is recovered, the Attorney General may petition the court on behalf of a person who may have provided information that led to the detecting and bringing to trial and punishment persons guilty of Medicaid fraud to reward the person in an amount commensurate with the quality of information determined by the court to have been provided, in accordance with the requirements of this subchapter.
If the Attorney General elects not to petition the court on behalf of the person, the person may petition the court on his or her own behalf.
Neither the state nor any defendant within the action shall be liable for expenses that a person incurs in bringing an action under this section.
An employee or a fiscal agent charged with the duty of referring or investigating cases of Medicaid fraud who is employed by or who contracts with any governmental entity shall not be eligible to receive a reward under this section.
Rutledge Announces Settlements With Preferred Family Health Totaling $65 Million: Says ‘i Will Do Everything In My Power To Hold Any Medicaid Provider Accountable’
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that multimillion dollar federal and state civil settlements have been reached with Preferred Family Healthcare . Both settlements were based on an investigation conducted by the Attorney General Office’s Medicaid Fraud Control Unit into false claims submitted to the Arkansas Medicaid Program by former PFH employees. PFH has agreed to pay $4,555,632.10 to resolve a federal false claims case and $1,944,367.90 in a separate state settlement under the State False Claims Act. In addition to the larger settlement, five former employees of PFH have been charged in state court with Medicaid fraud and an additional employee settled false claims or actions.
Program Fraud Civil Remedies Act
The Program Fraud Civil Remedies Act provides federal agencies, including the agencies responsible for federally funded health care programs, with administrative remedies against individuals and organizations that knowingly submit a false claim for payment, or knowingly make or use a false record or statement to get a false claim paid. The PFCRA is limited to situations where a false claim, or a group of related false claims, does not exceed $150,000. The PFCRA provides civil penalties up to $10,781 per false claim, plus an assessment equal to twice the amount of the false claim.
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Working With An Experienced Whistleblower Attorney
Those who have knowledge of fraudulent Medicaid activity in Arkansas and may be considering coming forward with a qui tam lawsuit should understand the procedure and their rights and protections under the law. Having the assistance of a whistleblower attorney is critical. At Khurana Law Firm, P.C., we can help. Contact us for a confidential, no-cost consultation to discuss your case.
Protections Under The False Claims Act
There is a qui tam, or whistleblower, provision in the Federal and NYS False Claims Acts, as well as the Pennsylvania Whistleblower Law. This provision allows a private citizen , to file a lawsuit against an organization or an individual on behalf of the government if the relator is aware of a potential false claim. A relator/whistleblower can receive a portion of the settlement dollars recovered. Relators/whistleblowers also have special protection under the qui tam provision of the Federal, NYS and Pennsylvania statutes. The provision protects employees from retaliation by an employer or employee for reporting potentially fraudulent activity.
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History Acts 1993 No 1299 7 8 20
Whenever it appears that any person is engaged in or intends to engage in the transfer, conversion, or destruction of assets, records, or property in an effort to avoid detection of violations of this subchapter, the Attorney General may apply to the Circuit Court of Pulaski County, or to the court in which the records or property are located, to seize and impound the property.
The application for an ex parte order shall be in writing, furnish a reasonable basis for the granting of the proposed order, and demonstrate that an emergency exists which would support the granting of the motion.
If the order is granted, the respondent shall be notified of the order seizing and impounding his or her property immediately after the seizure, or as soon as is reasonably practicable. If, after diligent inquiry, the respondent cannot be located, notice under this subsection may be accomplished by leaving a copy of the order at his or her dwelling house or usual place of abode with some person residing therein who is at least eighteen years of age, or by delivering a copy thereof to a representative at the respondents place of business who is at least eighteen years of age.
If the order is granted, the respondent shall be granted a hearing no later than five days after being notified of the propertys seizure for the purpose of determining whether the order should be continued.
State False Claims Acts Without Qui Tam Provisions
Currently, seven states have false claims acts modeled after the federal FCA, but they lack a qui tam provision. This means that whistleblowers are not permitted to file FCA lawsuits rather, only the state government may initiate a complaint. More importantly, this means that whistleblowers cannot share in any potential recovery . In many cases, omitting this provision from the states False Claim Act was due to a concern that whistleblowers would file frivolous lawsuits and agitate state businesses. The false claims acts in Arkansas, Mississippi, Missouri, and Nebraska only cover fraud related to Medicaid or other state-based healthcare programs.
One consequence of failing to include a qui tam provision is that these states do not qualify for a 10% bonus recovery from the federal government for violations of the federal FCA related to the Medicaid program. In order to receive this financial incentive, a states FCA must meet certain criteria as determined by the Office of Inspector General of the Department of Health and Human Services , along with the U.S. Attorney General. Such state laws must:
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History Acts 1993 No 1299 3 4 1995 No 1210 1 20
If the Attorney General has reasonable cause to believe that a person has information or is in possession, custody, or control of any document or other tangible object relevant to an investigation or that would lead to the discovery of relevant information in an investigation for violation of this subchapter, the Attorney General may serve upon the person, before bringing any action in the circuit court, a written demand to appear and be examined under oath, to answer written interrogatories under oath, and to produce the document or object for inspection and copying. The demand shall:
Be served upon the person in the manner required for service of process in the State of Arkansas or by certified mail with return receipt requested
Describe the nature of the conduct constituting the violation under investigation
Describe the class or classes of documents or objects with sufficient definiteness to permit them to be fairly identified
Contain a copy of the written interrogatories
Prescribe a reasonable time at which the person must appear to testify, a time within which to answer the written interrogatories, and a time within which the document or object must be produced
Advise the person that objections to or reasons for not complying with the demand may be filed with the Attorney General on or before that time
Specify a place for the taking of testimony or for production and designate a person who shall be custodian of the document or object and
History Acts 1993 No 1299 2 2003 No 1163 120
It shall be unlawful for any person to commit any act proscribed by § 20-77-902, and any person found to have committed any such act or acts shall be deemed liable to the State of Arkansas, through the Attorney General, for full restitution and for a civil penalty of not less than five thousand dollars and not more than ten thousand dollars for each violation, plus three times the amount of all payments judicially found to have been fraudulently received from the Arkansas Medicaid program or its fiscal agents because of the act of that person, except that if the court finds the following:
The person committing the violation of this subchapter furnished officials of the Attorney Generals office with all information known to the person about the violation within thirty days after the date on which the defendant first obtained the information and
The person fully cooperated with any Attorney Generals investigation of the violation, and at the time the person furnished the Attorney General with the information about the violation:
No criminal prosecution, civil action, or administrative action had commenced under this subchapter with respect to the violation and
The person did not have actual knowledge of the existence of an investigation into the violation.
The court may assess not more than two times the amount of damages which the state sustained because of the act of the person.
For actions under this subchapter, the following shall apply:
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Mallinckrodt To Pay Arkansas $238000 To Settle Lawsuit Alleging Underpayment Of Medicaid Drug Rebates
LITTLE ROCK Arkansas Attorney General Leslie Rutledge announced the State will settle allegations of fraud against Mallinckrodt ARD, LLC, formerly known as Questcor Pharmaceuticals, Inc., a subsidiary of the pharmaceutical company Mallinckrodt plc, which sells and markets pharmaceutical products throughout the nation. Rutledge has joined with 49 other states and territories including, Washington, D.C., Puerto Rico, and the federal government to settle the allegations of fraud. The total value of the settlement is $233,707,865.18, plus interest, to be paid over a period of seven years. In total, Arkansas will receive $238,515.92.
For over seven years, Mallinckrodt knowingly and illegally underpaid Medicaid rebates costing the State and taxpayers, said Attorney General Rutledge. Let this be a lesson to other companies that they will pay if they take advantage of Arkansans and their hard earned money.
Mallinckrodts U.S. headquarters is located in Bedminster, New Jersey. The settlement resolves allegations that from January 1, 2013, through June 30, 2020, Mallinckrodt knowingly underpaid Medicaid rebates due for its drug H.P. Acthar Gel . The government alleges that Mallinckrodts conduct violated the Federal False Claims Act and the Arkansas Medicaid Fraud False Claims Act and resulted in the submission of false claims to the Arkansas Medicaid program.
Empower Healthcare To Pay $1 Million Penalty In Medicaid Fraud Settlement
LITTLE ROCK, Ark. Empower Healthcare Solutions, LLC, will pay an almost $8 million total civil settlement to the Arkansas Medicaid Program.
The false claims settlement was based on a joint investigation conducted by the Medicaid Fraud Control Unit of the Attorney Generals Office and the U.S. Department of Health and Human Services, Office of Inspector General.
The investigation was initiated after the Arkansas Department of Human Services and the Arkansas Medicaid Inspector General raised questions concerning how Empower was reporting expenses in 2020.
The Medicaid Fraud Control Unit found that $10,363,511 had been improperly reported and that the reporting violated the Arkansas Medicaid False Claims Act.
Empower cooperated fully with the investigation and maintains that any improper reporting was unintentional but agreed to modify its reporting and to pay the state of Arkansas one million dollars in civil penalties and costs.
In addition to the $1 million in civil penalties and costs, the adjustments to the report of expenses in 2020 will result in a $6,983,511 increase in Empowers 2020 year end reconciliation payment to the Arkansas Medicaid Program. The combined recovery from the settlement was $7,983,511.
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Arkansas False Claims Act / Qui Tam Statute
The Arkansas Medicaid False Claims Act allows whistleblowers to bring qui tam lawsuits if they know a wrongdoer who abuses the state Medicaid program. The Arkansas Medicaid False Claims Act imposes liability on persons who knowingly present false or fraudulent claims for claims for payment to the Arkansas Medicaid program. It also makes it illegal to pay or receive bribes in exchange for healthcare referrals that are reimbursed by Medicaid. A defendant found to have violated the ArkansasFalse Claims Act may be liable for a civil penalty between $5,000 and $10,000, plus three times the amount of damages sustained by the state because of the defendants conduct.
A whistleblower under the Arkansas Medicaid False Claims Act is entitled to an award of up to 10% of the amount recovered by the state.
Generally a whistleblower must file a complaint within five years of the violations they are reporting.
As amended by Laws 2013, No. 1132.
History Acts 1993 No 1299 1 1999 No 1544 6 2003 No 1473 46 20
A person shall be liable to the State of Arkansas, through the Attorney General, for a civil penalty and restitution if he or she:
Knowingly makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under the Arkansas Medicaid program
At any time knowingly makes or causes to be made any false statement or representation of a material fact for use in determining rights to a benefit or payment
Having knowledge of the occurrence of any event affecting his or her initial or continued right to any benefit or payment or the initial or continued right to any benefit or payment of any other individual in whose behalf he or she has applied for or is receiving a benefit or payment knowingly conceals or fails to disclose that event with an intent fraudulently to secure the benefit or payment either in a greater amount or quantity than is due or when no benefit or payment is authorized
Having made application to receive any benefit or payment for the use and benefit of another and having received it, knowingly converts the benefit or payment or any part thereof to a use other than for the use and benefit of the other person
Knowingly presents or causes to be presented a claim for a physicians service for which payment may be made under the program and knows that the individual who furnished the service was not licensed as a physician
Subdivision of this section shall not apply to:
Knowingly:
Knowingly:
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As Used In This Subchapter:
Arkansas Medicaid program means the program authorized under Title XIX of the federal Social Security Act, which provides for payments for medical goods or services on behalf of indigent families with dependent children and of aged, blind, or disabled individuals whose income and resources are insufficient to meet the cost of necessary medical services
Claim includes any request or demand, including any and all documents or information required by federal or state law or by rule, made against medical assistance programs funds for payment. A claim may be based on costs or projected costs and includes any entry or omission in a cost report or similar document, book of account, or any other document which supports, or attempts to support, the claim. A claim may be made through electronic means if authorized by the Department of Human Services. Each claim may be treated as a separate claim, or several claims may be combined to form one claim.
Fiscal agent means any individual, firm, corporation, professional association, partnership, organization, or other legal entity which, through a contractual relationship with the Department of Human Services, the State of Arkansas receives, processes, and pays claims under the program
Knowing or knowingly means that the person has actual knowledge of the information or acts in deliberate ignorance or reckless disregard of the truth or falsity of the information
Arkansas Medicaid Fraud False Claims Act
§ 20-77-901. Definitions
As used in this subchapter:
Arkansas Medicaid program means the program authorized under Title XIX of the federal Social Security Act,1 which provides for payments for medical goods or services on behalf of indigent families with dependent children and of aged, blind, or disabled individuals whose income and resources are insufficient to meet the cost of necessary medical services
Claim includes any request or demand, including any and all documents or information required by federal or state law or by rule, made against medical assistance programs funds for payment. A claim may be based on costs or projected costs and includes any entry or omission in a cost report or similar document, book of account, or any other document which supports, or attempts to support, the claim. A claim may be made through electronic means if authorized by the Department of Human Services. Each claim may be treated as a separate claim, or several claims may be combined to form one claim.
Fiscal agent means any individual, firm, corporation, professional association, partnership, organization, or other legal entity which, through a contractual relationship with the department, the State of Arkansas receives, processes, and pays claims under the program
Knowing or knowingly means that the person has actual knowledge of the information or acts in deliberate ignorance or reckless disregard of the truth or falsity of the information
§ 20-77-902. Liability
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