Under the 2005 Deficit Reduction Act states were given a financial incentive to enact false claims acts that targeted Medicaid fraud. If a state false claims act meets certain requirements, the state is entitled to a greater percentage of any recovery of fraudulently obtained Medicaid funds. The state law must be at least as effective as the federal FCA.
Changes to the federal law made in 2009 and 2010 amended the bases for FCA liability and expanded the rights of qui tam relators and the state laws must reflect those changes.
The Health and Human Services Office of the Inspector General will be reviewing all of the state laws previously deemed compliant. This can have huge financial consequences as states with compliant laws get an additional 10 percent of the recovery. Luckily, there’s a grace period and the states have until March 31, 2013 to amend and resubmit their laws.