On January 13, 2008, the NJ Legislature passed, and Gov. Corzine signed, the New Jersey False Claims Act modeled on the federal False Claims Act, including the latter's whistleblower provisions. The passage of this bill, which has an effective date of 60 days from the date of its passage, has significant ramifications for all healthcare facilities that receive Medicaid funds as well as those healthcare providers / suppliers that receive any New Jersey funds such as reimbursement for services provided to New Jersey employees. Last year alone, the Department of Justice recovered $20 billion under the federal act.
Awareness of this new law should make every healthcare facility and professional practice consider instituting or reviewing its compliance program since the law opens the door to whistleblowers who may be any of these:
· Employees
· Residents
· Family members of residents
· Vendors
· Contract agencies (e.g.; therapists, nurses, etc.)
· Anyone else with information regarding reimbursement from the State of New Jersey that is based upon misrepresentations
The most typical false-claim suit involves Medicaid and Medicare overcharges and/or substandard quality of care. Typical "Qui Tam" (i.e.; whistleblower) plaintiffs are employees of the health care facility.
· A suit under the law can seek treble damages and penalties of up to $10,000 per violation, plus legal fees.
· Liability is based on knowingly submitting a false claim, conspiring or participating in the false claim, issuing or delivering false receipts for state property and other dishonest dealings.
· Specific intent to defraud is not required. Acting with deliberate ignorance or reckless disregard of truth or falsity suffices. Innocent mistake and mere negligence are defenses.
· A whistleblower must serve a copy of the complaint on the attorney general and allow the state 60 days to decide whether to intervene and take on primary responsibility, allow the whistleblower to pursue it alone or move to dismiss it.
· With the attorney general in the case, the court can allocate 15 percent to 25 percent of the proceeds to the whistleblower, rising to 25 percent to 30 percent when the plaintiff acts alone.
· Defendants can recover legal fees from whistleblowers for frivolous claims.
· The limitations period is six years, or three years after the material facts should reasonably have been known, with a 10-year absolute cutoff.
· Protection from retaliation is available for employees who file false-claims actions or assist with them.
For skilled nursing facilities, the stakes are very high to develop and implement a fraud and abuse compliance program, given the number of Medicaid claims submitted by these facilities. An effective compliance program shows a good faith intent to adhere to laws and regulations thereby maximizing a facility's ability to persuade state authorities that a mistake is just that, a mistake, and not evidence of an intent to do wrong. As a minimal call to action, I would urge you to contact my office so that I can help you evaluate the status of your compliance program and suggest any remediation that may be necessary to avoid the potential effect of this new law.
