David C Dunbar

Miss. needs False Claims Act, whistleblower statute

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“With the growing number and size of frauds perpetrated on Mississippi taxpayers it is high time the state legislature pass and the governor sign into law a whistleblower statute similar to those already in place in 29 other states.”

by David C. Dunbar | Guest Columnist | May 29, 2013

This is the excerpt of a column from the Clarion-Ledger.

General overview of qui tam statutes and false claims acts

Qui tam statutes empower the public to deter fraud against the government by authorizing individuals, known as relators, to bring lawsuits on behalf of the government against people or corporations who have committed the fraud. These lawsuits are also known as whistleblower lawsuits.

False claims and qui tam statutes typically work hand-in-hand. Generally, a false claims act prohibits a person or company from submitting fraudulent claims to the government to obtain payments. Typical areas of false claims include health care, pharmaceutical, taxes, government contractors (particularly military suppliers). False claims acts criminalize submitting a false claim and impose some sort of liability on the perpetrator.

On the federal level, the False Claims Act of 1986 imposes civil liability on those who submit false claims to the United States. This became law under President Reagan to strengthen existing qui tam laws. During the increased military buildup following the Cold War, the U.S. Government was concerned that military subcontractors were overcharging. A common example is the $900.00 toilet seat billed to the Government.

Other States

Many states also have adopted similar false claims acts or qui tam laws relating to specific false claims (e.g. healthcare fraud). There are 29 states that have a state-level false claims act, including Louisiana, Texas, Tennessee, Georgia, and Florida.

Examples of recovery

From January 2009 through May 2013, the Department of Justice had recoveries of over $14.2 billion dollars under the federal False Claims Act. In 2012, the Department of Justice recovered $4,220,671,240 in health care fraud alone. In 2012, a qui tam lawsuit by Texas against Johnson & Johnson regarding the disclosure of side effects of a drug settled for $158 million. In a 2011 California case, a $241 million settlement of a qui tam suit was reached arising from Quest Diagnostics alleged overcharging of the state Medicaid program.

Mississippi needs a state level false claims act

Mississippi is limited by its resources in its ability to investigate fraud. Qui tam statutes create private attorneys general who can investigate and prosecute fraud. Because such statutes exponentially increase the number of investigators, they discourage fraud through the increase in likelihood that a perpetrator will be caught, reported, and prosecuted. Instead of having to rely on government officials, qui tam statutes give the public the power to identify and prosecute claims. In this manner, it allows for smaller government because the attorney general or department of justice does not have to hire more staff.

Beyond just common sense, Mississippi also has a direct economic incentive to adopt a state false claims act. Mississippi needs to recover all of the revenue stolen from her because we cannot afford waste. Additionally, the federal government recently adopted a law, 42 U.S.C. 1396h, which reduces the federal recovery and increases the state’s recovery under a qualifying statute for claims of Medicaid fraud.

In conclusion, Mississippi needs a state-level qui tam statute to empower its citizens to bring lawsuits on behalf of the State to recover fraudulently wasted tax dollars.

David C. Dunbar is an attorney at DunbarMonroe P.A. in Ridgeland. He can be reached at dcdunbar@dunbarmonroe.com.

>> Read more on false claims acts at Taxpayers Against Fraud Education Fund.

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