False Claims Bill Defeated on the Senate Floor

Legislation that would authorize a person to file suit on behalf of the State for an alleged false claim and recover up to 25 percent of the proceeds was defeated on the floor of the Senate by Senator David Brinkley. The Maryland Chamber of Commerce opposes the legislation because the new standards in this bill for prosecuting alleged fraud are unfair to businesses and would put a chilling effect on businesses contracting with the State. The penalties outlined in the bill included a $10,000 penalty per violation, treble damages and attorney’s fees. While we support vigorous enforcement of the law by the State against persons attempting to defraud state programs, we do not endorse creating a new private cause of action for individuals to pursue these claims.

An amended version of HB 867 passed out of the Judicial Proceedings Committee on Friday, and the floor vote on the legislation was postponed by business community supporters.  Senator Brinkley moved to indefinitely special order HB 867, which effectively killed the legislation for this legislative session.  The motion was supported by a majority of the floor and the bill was defeated for this legislative session.

Similar legislation addressing health care false claims passed in 2010, with proponents claiming that the state would recover $300 million per year in fraudulent Medicaid claims. The fiscal note for HB 867 states that only $3.7 million was recovered in 2011, $1.2 million in 2012, and $12 million so far in 2013.  That is nowhere near the estimates the proponents predicted.  Also, the Attorney General’s office admits that, of those settlements, only $112,000 would have been unrecoverable if Maryland’s false claims laws were not in place.

Legislative Issues Tag: Civil Liability