Does Texas Have it’s own False Claims Act?
Yes, Qui Tam suits can be brought by whistleblowers if they discover that a false claim has been submitted to the Texas Medicaid Program.
Does the Texas False Claims Act Have a Qui Tam Provision?
Yes, the Texas Medicaid Fraud Prevention Act (TMFPA) includes a qui tam provision, similar to the federal False Claims Act. This provision empowers individuals, known as “relators” or whistleblowers, to sue on behalf of the state when they possess evidence or knowledge of fraudulent activities against the Medicaid system. These whistleblowers are entitled to a portion of the recovered damages, serving as a financial incentive to report such unlawful actions.
Does the Texas False Claims Act Have an Anti-Retaliation Provision?
Yes, the Connecticut False Claims Act does have an anti-retaliation provision. This provision is designed to protect employees, contractors, and agents from retaliation in the event that they disclose information or take action related to a violation of the Act.
Yes, Texas Human Resources Code § 36.115 prohibits employers from retaliating against whistleblowers and if retaliation does occur, the employee retaliated against is entitled to reinstatement, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination.
What are the Financial Rewards for whistleblowers under the Texas False Claims Act?
Under the Texas Medicaid Fraud Prevention Act (TMFPA), whistleblowers, also known as “relators,” who report fraudulent activities against the Medicaid system may be entitled to financial rewards. The exact amount of the rewards can vary depending on the specific circumstances of the case and the amount recovered. However, typically, whistleblowers can receive a portion of the recovered damages as a financial incentive for exposing unlawful actions.
How does the Texas FCA differ from the Federal FCA?
- Narrower Scope: The TMFPA exclusively applies to Medicaid Fraud, in contrast to the Federal FCA, which applies to all false claims for payment or reimbursement.
- Higher Penalties for violations that injure minors, elders, or disabled individuals: When an unlawful act results in minors, elders, or disabled individuals being injured, the TMFPA provides for an enhanced penalty that ranges from $5,500 to $15,000
- Longer Initial Sealing Period for Qui Tam Complaints: The initial sealing period for Qui Tam complaints under the Texas Medicaid Fraud Prevention Act is 180 days, which is three-times the federal False Claims Act’s initial sealing period for Qui Tam complaints of 60 days.
- The TMFPA doesn’t actually require a false claim, but is rather based on if a party committed an “unlawful act”: The TMFPA actually protects against “unlawful acts” in general, rather than specifically requiring a “false claim”. However, it is important to note that these “unlawful” acts are typically material false statements and misrepresentations affecting the Medicaid Program.
- In contrast with the federal False Claims Act, under the TMFPA, the state of Texas does need to demonstrate that payments rendered through fraudulent acts are damages or overpayments. Instead, a party who violates the TMFPA is liable to the State for double the entire amount of payment or benefit provided under the Medicaid Program.
What are some big cases that have been a result of the Texas False Claims Act?
Shire PLC, Baxter International Inc., Baxalta Incorporated, Viropharma, Inc., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals: In August, 2023, Shire PLC, Baxter International Inc., Baxalta Inc., Viropharma Inc., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals America agreed to pay $42.7 million to resolve allegations that the aforementioned drug manufacturers violated the TMFPA by providing, directly or indirectly, nursing and reimbursement services to Texas Medicaid providers for certain pharmaceutical drugs, in addition to paying clinical nurse educators to refer the drug Vyvanse to providers in 2014-2015.
Glenmark Generics: In April 2015, Glenmark Generics Inc. (“Company”) agreed to pay $25 million to the State of Texas in order to settle allegations that the Company had submitted reports containing inflated drug prices to the Medicaid Program for an 11-year time period,
What is the text of the Texas False Claims Act?
Texas Human Resources Code §36.002
“Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful act if the person:
(1) knowingly makes or causes to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under a health care program that is not authorized or that is greater than the benefit or payment that is authorized;
(2) knowingly conceals or fails to disclose information that permits a person to receive a benefit or payment under a health care program that is not authorized or that is greater than the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or payment on behalf of another person under a health care program and converts any part of the benefit or payment to a use other than for the benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or seeks to induce the making of a false statement or misrepresentation of material fact concerning:
(A) the conditions or operation of a facility in order that the facility may qualify for certification or recertification required by a health care program, including certification or recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing facility;
(iii) a hospice;
(iv) an ICF-IID;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a federal or state law, rule, regulation, or provider agreement pertaining to a health care program;
(5) except as authorized under a health care program, knowingly pays, charges, solicits, accepts, or receives, in addition to an amount paid under the program, a gift, money, a donation, or other consideration as a condition to the provision of a service or product or the continued provision of a service or product if the cost of the service or product is paid for, in whole or in part, under the program;
(6) knowingly presents or causes to be presented a claim for payment under a health care program for a product provided or a service rendered by a person who:
(A) is not licensed to provide the product or render the service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes or causes to be made a claim under a health care program for:
(A) a service or product that has not been approved or acquiesced in by a treating physician or health care practitioner;
(B) a service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry; or
(C) a product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate;
(8) makes a claim under a health care program and knowingly fails to indicate the type of license and the identification number of the licensed health care provider who actually provided the service;
(9) conspires to commit a violation of Subdivision (1), (2), (3), (4), (5), (6), (7), (8), (10), (11), (12), or (13);
(10) is a managed care organization that contracts with the commission or other state agency to provide or arrange to provide health care benefits or services to individuals eligible under a health care program and knowingly:
(A) fails to provide to an individual a health care benefit or service that the organization is required to provide under the contract;
(B) fails to provide to the commission or appropriate state agency information required to be provided by law, commission or agency rule, or contractual provision; or
(C) engages in a fraudulent activity in connection with the enrollment of an individual eligible under the program in the organization’s managed care plan or in connection with marketing the organization’s services to an individual eligible under the program;
(11) knowingly obstructs an investigation by the attorney general of an alleged unlawful act under this section;
(12) knowingly makes, uses, or causes the making or use of a false record or statement material to an obligation to pay or transmit money or property to this state under a health care program, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to this state under a health care program; or
(13) knowingly engages in conduct that constitutes a violation under Section 32.039(b).”
Sec. 36.052 Civil Remedies
“Sec. 36.052. CIVIL REMEDIES. (a) Except as provided by Subsection (c), a person who commits an unlawful act is liable to the state for:
(1) the amount of any payment or the value of any monetary or in-kind benefit provided under a health care program, directly or indirectly, as a result of the unlawful act, including any payment made to a third party;
(2) interest on the amount of the payment or the value of the benefit described by Subdivision (1) at the prejudgment interest rate in effect on the day the payment or benefit was received or paid, for the period from the date the benefit was received or paid to the date that the state recovers the amount of the payment or value of the benefit;
(3) a civil penalty of:
(A) not less than $5,500 or the minimum amount imposed as provided by 31 U.S.C. Section 3729(a), if that amount exceeds $5,500, and not more than $15,000 or the maximum amount imposed as provided by 31 U.S.C. Section 3729(a), if that amount exceeds $15,000, for each unlawful act committed by the person that results in injury to an elderly person, as defined by Section 48.002(a)(1), a person with a disability, as defined by Section 48.002(a)(8)(A), or a person younger than 18 years of age; or
(B) not less than $5,500 or the minimum amount imposed as provided by 31 U.S.C. Section 3729(a), if that amount exceeds $5,500, and not more than $11,000 or the maximum amount imposed as provided by 31 U.S.C. Section 3729(a), if that amount exceeds $11,000, for each unlawful act committed by the person that does not result in injury to a person described by Paragraph (A); and
(4) two times the amount of the payment or the value of the benefit described by Subdivision (1).
(b) In determining the amount of the civil penalty described by Subsection (a)(3), the trier of fact shall consider:
(1) whether the person has previously violated the provisions of this chapter;
(2) the seriousness of the unlawful act committed by the person, including the nature, circumstances, extent, and gravity of the unlawful act;
(3) whether the health and safety of the public or an individual was threatened by the unlawful act;
(4) whether the person acted in bad faith when the person engaged in the conduct that formed the basis of the unlawful act; and
(5) the amount necessary to deter future unlawful acts.
(c) The trier of fact may assess a total of not more than two times the amount of a payment or the value of a benefit described by Subsection (a)(1) if the trier of fact finds that:
(1) the person furnished the attorney general with all information known to the person about the unlawful act not later than the 30th day after the date on which the person first obtained the information; and
(2) at the time the person furnished all the information to the attorney general, the attorney general had not yet begun an investigation under this chapter.
(d) An action under this section shall be brought in Travis County or in a county in which any part of the unlawful act occurred.
(e) The attorney general may:
(1) bring an action for civil remedies under this section together with a suit for injunctive relief under Section 36.051; or
(2) institute an action for civil remedies independently of an action for injunctive relief.”
Sec. 36.101 Qui Tam Provision
“Sec. 36.101. ACTION BY PRIVATE PERSON AUTHORIZED. (a) A person may bring a civil action for a violation of Section 36.002 for the person and for the state. The action shall be brought in the name of the person and of the state.
(b) In an action brought under this subchapter, a person who violates Section 36.002 is liable as provided by Section 36.052.”
Sec. 36.102. INITIATION OF ACTION; CONSENT REQUIRED FOR DISMISSAL
(a) A person bringing an action under this subchapter shall serve a copy of the petition and a written disclosure of substantially all material evidence and information the person possesses on the attorney general in compliance with the Texas Rules of Civil Procedure.
(b) The petition shall be filed in camera and, except as provided by Subsection (c-1) or (d), shall remain under seal until at least the 180th day after the date the petition is filed or the date on which the state elects to intervene, whichever is earlier. The petition may not be served on the defendant until the court orders service on the defendant.
(c) The state may elect to intervene and proceed with the action not later than the 180th day after the date the attorney general receives the petition and the material evidence and information.
(c-1) At the time the state intervenes, the attorney general may file a motion with the court requesting that the petition remain under seal for an extended period.
(d) The state may, for good cause shown, move the court to extend the 180-day deadline under Subsection (b) or (c). A motion under this subsection may be supported by affidavits or other submissions in camera.
(e) An action under this subchapter may be dismissed only if the court and the attorney general consent in writing to the dismissal and state their reasons for consenting.
Sec. 36.115 Anti Retaliation Provision
“Sec. 36.115. RETALIATION AGAINST PERSON PROHIBITED. (a) A person, including an employee, contractor, or agent, who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of a lawful act taken by the person or associated others in furtherance of an action under this subchapter, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this subchapter, or other efforts taken by the person to stop one or more violations of Section 36.002 is entitled to:
(1) reinstatement with the same seniority status the person would have had but for the discrimination; and
(2) not less than two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees.
(b) A person may bring an action in the appropriate district court for the relief provided in this section.
(c) A person must bring suit on an action under this section not later than the third anniversary of the date on which the cause of action accrues. For purposes of this section, the cause of action accrues on the date the retaliation occurs.”