Section 1909 of the Social Security Act, (codified at 42 U.S.C. 1396h)  provides for a bonus incentive for states which enact False Claims Act provisions that are at least as effective in rewarding and facilitating qui tam actions for false or fraudulent claims as those described in the federal False Claims Act, sections 3730 through 3732 of title 31, United States Code and which provide penalties at least as great as the civil penalties of the FCA.

The Texas False Claims Act is located at Human Resources Code Section 36.001, et seq. While the Texas Anti-Kickback Law is located at  32.039. Under the later section, a person may be fined up to 15,000 for each violation where he solicits or receives, directly or indirectly, overtly or covertly any remuneration, including any kickback, bribe, or rebate, in cash or in kind for referring an individual to a person for the furnishing of, or for arranging the furnishing of, any item or service for which payment may be made, in whole or in part, under the medical assistance program, provided that this subdivision does not prohibit the referral of a patient to another practitioner within a multispecialty group or university medical services research and development plan (practice plan) for medically necessary services.  

Unlike federal False Claims Act lawsuits, the Texas Attorney General relies more heavily upon the resources of private qui tam relators attorneys.  At the federal level, when it intervenes, the DOJ will largely takeover litigation from a qui tam relator. At the state level, the plaintiff law firm will have a much more active role.

Under Hum. Res. Code 32.039 the State may examine the facts and if the relevant department concludes that the person committed a violation, the department may issue a preliminary report stating the facts on which it based its conclusion, recommending that an administrative penalty under this section be imposed and recommending the amount of the proposed penalty.

The department shall give written notice of the report to the person charged with committing the violation. The notice must include a brief summary of the facts, a statement of the amount of the recommended penalty, and a statement of the person's right to an informal review of the alleged violation, the amount of the penalty, or both the alleged violation and the amount of the penalty.

The statute provides for informal review, formal review and appeals from Administrative determinations.

If you have been contacted by the State of Texas regarding an alleged violation and would like to schedule a free initial consultation, please contact Martin Merritt by clicking here.

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