LRB-1102/1
SWB:klm
2021 - 2022 LEGISLATURE
October 22, 2021 - Introduced by Representatives Subeck, Hebl, Sinicki,
Anderson, Stubbs, Conley, Cabral-Guevara and Cabrera, cosponsored by
Senators Agard, Larson and Ringhand. Referred to Committee on Judiciary.
AB652,1,7
1An Act to renumber and amend 49.485;
to amend 801.02 (1), 803.09 (1),
2803.09 (2), 804.01 (2) (intro.) and 805.04 (1); and
to create 20.9315, 49.485 (1),
3165.25 (11m), 805.04 (2p) and 893.9815 of the statutes;
relating to: restoring
4private individual authority to bring a qui tam claim against a person for
5making a false claim for medical assistance, actions by the attorney general
6against a person for making a false claim for medical assistance, and providing
7a penalty.
Analysis by the Legislative Reference Bureau
This bill restores a private individual's authority to bring a qui tam claim
against a person who makes a false claim for medical assistance, which was
eliminated in
2015 Wisconsin Act 55. A qui tam claim, as it relates to the Medical
Assistance program under the bill, is a claim initiated by a private individual on his
or her own behalf and on behalf of the state against a person who makes a false claim
for medical assistance. The bill restores the language prior to the enactment of
2015
Wisconsin Act 55 that stated that, of moneys recovered as a result of a qui tam claim,
a private individual may be awarded up to 30 percent of the amount recovered,
depending upon certain factors, including the individual's role in advancement of the
prosecution of the action. The individual may also be entitled to reasonable expenses
incurred in bringing the action, as well as attorney fees. This bill also includes
additional changes not included in the prior law to conform state law to the federal
False Claims Act, including expanding provisions to facilitate qui tam actions and
modifying the bases for liability to parallel the liability provisions under the federal
False Claims Act. In addition to qui tam claims, the Department of Justice has
independent authority to bring a claim against a person for making a false claim for
medical assistance. This bill modifies provisions relating to DOJ's authority to
parallel the liability and penalty standards relating to qui tam claims, specifically,
applying the definition of the term “claim” and the forfeiture amounts provided
under the federal False Claims Act.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB652,1
1Section 1
. 20.9315 of the statutes is created to read:
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220.9315 False claims for medical assistance; actions by or on behalf of
3state. (1) In this section:
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(b) “Claim” has the meaning given in
31 USC 3729 (b) (2).
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(d) “Knowingly" means, with respect to information, having actual knowledge
6of the information, acting in deliberate ignorance of the truth or falsity of the
7information, or acting in reckless disregard of the truth or falsity of the information.
8“Knowingly" does not mean specifically intending to defraud.
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(de) “Material” means having a natural tendency to influence, or be capable of
10influencing, the payment or receipt of money or property.
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(dm) “Medical assistance" has the meaning given under s. 49.43 (8).
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(dr) “Obligation” has the meaning given in
31 USC 3729 (b) (3).
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(dt) “Original source” has the meaning given in
31 USC 3730 (e) (4) (B).
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(e) “Proceeds" includes damages, civil penalties, surcharges, payments for costs
15of compliance, and any other economic benefit realized by this state as a result of an
16action or settlement of a claim.
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1(2) Except as provided in sub. (3), any person who does any of the following is
2liable to this state for 3 times the amount of the damages that were sustained by the
3state or would have been sustained by the state, whichever is greater, because of the
4actions of the person, and shall forfeit, for each violation, an amount within the range
5specified under
31 USC 3729 (a):
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(a) Knowingly presents or causes to be presented a false or fraudulent claim
7for medical assistance.
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(b) Knowingly makes, uses, or causes to be made or used a false record or
9statement material to a false or fraudulent claim for medical assistance.
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(dg) Knowingly makes, uses, or causes to be made or used a false record or
11statement material to an obligation to pay or transmit money or property to the
12Medical Assistance program, or knowingly conceals or knowingly and improperly
13avoids or decreases an obligation to pay or transmit money or property to the Medical
14Assistance program.
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(dr) Conspires to commit a violation under par. (a), (b), or (dg).
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16(3) The court may assess against a person who violates sub. (2) not less than
172 nor more than 3 times the amount of the damages sustained by the state because
18of the acts of the person, and shall not assess any forfeiture, if the court finds all of
19the following:
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(a) The person who commits the acts furnished the attorney general with all
21information known to the person about the acts within 30 days after the date on
22which the person obtained the information.
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(b) The person fully cooperated with any investigation of the acts by this state.
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(c) At the time that the person furnished the attorney general with information
25concerning the acts, no criminal prosecution or civil or administrative enforcement
1action had been commenced with respect to any such act, and the person did not have
2actual knowledge of the existence of any investigation into any such act.
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3(5) (a) Except as provided in subs. (10) and (12), any person may bring a civil
4action as a qui tam plaintiff against a person who commits an act in violation of sub.
5(2) for the person and the state in the name of the state.
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(b) The plaintiff shall serve upon the attorney general a copy of the complaint
7and documents disclosing substantially all material evidence and information that
8the person possesses. The plaintiff shall file a copy of the complaint with the court
9for inspection in camera. Except as provided in par. (c), the complaint shall remain
10under seal for a period of 60 days from the date of filing and shall not be served upon
11the defendant until the court so orders. Within 60 days from the date of service upon
12the attorney general of the complaint, evidence, and information under this
13paragraph, the attorney general may intervene in the action.
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(bm) Any complaint filed by the state in intervention, whether filed separately
15or as an amendment to the qui tam plaintiff's complaint, shall relate back to the filing
16date of the qui tam plaintiff's complaint, to the extent that the state's claim arises
17out of the conduct, transactions, or occurrences set forth, or attempted to be set forth,
18in the qui tam plaintiff's complaint.
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(c) The attorney general may, for good cause shown, move the court for one or
20more extensions of the period during which a complaint in an action under this
21subsection remains under seal.
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(d) Before the expiration of the period during which the complaint remains
23under seal, the attorney general shall do one of the following:
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1. Proceed with the action or an alternate remedy under sub. (10), in which case
25the action or proceeding under sub. (10) shall be prosecuted by the state.
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12. Notify the court that he or she declines to proceed with the action, in which
2case the person bringing the action may proceed with the action.
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(e) If a person brings a valid action under this subsection, no person other than
4the state may intervene or bring a related action while the original action is pending
5based upon the same facts underlying the pending action.
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(f) In any action or other proceeding under sub. (10) brought under this
7subsection, the plaintiff is required to prove all essential elements of the cause of
8action or complaint, including damages, by a preponderance of the evidence.
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9(6) If the state proceeds with an action under sub. (5) or an alternate remedy
10under sub. (10), the state has primary responsibility for prosecuting the action or
11proceeding under sub. (10). The state is not bound by any act of the person bringing
12the action, but that person has the right to continue as a party to the action.
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13(7) (b) With the approval of the governor, the attorney general may compromise
14and settle an action under sub. (5) or an administrative proceeding under sub. (10)
15to which the state is a party, notwithstanding objection of the person bringing the
16action, if the court determines, after affording to the person bringing the action the
17right to a hearing at which the person is allowed the opportunity to present evidence
18in opposition to the proposed settlement, that the proposed settlement is fair,
19adequate, and reasonable considering the relevant circumstances pertaining to the
20violation.
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(c) Upon a showing by the state that unrestricted participation in the
22prosecution of an action under sub. (5) or an alternate proceeding to which the state
23is a party by the person bringing the action would interfere with or unduly delay the
24prosecution of the action or proceeding, or would result in consideration of
1repetitious or irrelevant evidence or evidence presented for purposes of harassment,
2the court may limit the person's participation in the prosecution, such as:
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1. Limiting the number of witnesses that the person may call.
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2. Limiting the length of the testimony of the witnesses.
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3. Limiting the cross-examination of witnesses by the person.
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4. Otherwise limiting the participation by the person in the prosecution of the
7action or proceeding.
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(d) Upon showing by a defendant that unrestricted participation in the
9prosecution of an action under sub. (5) or alternate proceeding under sub. (10) to
10which the state is a party by the person bringing the action would result in
11harassment or would cause the defendant undue burden or unnecessary expense, the
12court may limit the person's participation in the prosecution.
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13(8) Except as provided in sub. (7), if the state elects not to participate in an
14action filed under sub. (5), the person bringing the action may prosecute the action.
15If the attorney general so requests, the attorney general shall, at the state's expense,
16be served with copies of all pleadings and deposition transcripts in the action. If the
17person bringing the action initiates prosecution of the action, the court, without
18limiting the status and rights of that person, may permit the state to intervene at a
19later date upon showing by the state of good cause for the proposed intervention.
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20(9) Whether or not the state participates in an action under sub. (5), upon
21showing in camera by the attorney general that discovery by the person bringing the
22action would interfere with the state's ongoing investigation or prosecution of a
23criminal or civil matter arising out of the same facts as the facts upon which the
24action is based, the court may stay such discovery in whole or in part for a period of
25not more than 60 days. The court may extend the period of any such stay upon
1further showing in camera by the attorney general that the state has pursued the
2criminal or civil investigation of the matter with reasonable diligence and the
3proposed discovery in the action brought under sub. (5) will interfere with the
4ongoing criminal or civil investigation or prosecution.
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5(10) The attorney general may pursue a claim relating to an alleged violation
6of sub. (2) through an alternate remedy available to the state or any state agency,
7including an administrative proceeding to assess a civil forfeiture. If the attorney
8general elects any such alternate remedy, the attorney general shall serve timely
9notice of his or her election upon the person bringing the action under sub. (5), and
10that person has the same rights in the alternate venue as the person would have had
11if the action had continued under sub. (5). Any finding of fact or conclusion of law
12made by a court or by a state agency in the alternate venue that has become final is
13conclusive upon all parties named in an action under sub. (5). For purposes of this
14subsection, a finding or conclusion is final if it has been finally determined on appeal,
15if all time for filing an appeal or petition for review with respect to the finding or
16conclusion has expired, or if the finding or conclusion is not subject to judicial review.
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17(11) (a) Except as provided in pars. (b) and (e), if the state proceeds with an
18action brought by a person under sub. (5) or the state pursues an alternate remedy
19relating to the same acts under sub. (10), the person who brings the action shall
20receive at least 15 percent but not more than 25 percent of the proceeds of the action
21or settlement of the claim, depending upon the extent to which the person
22contributed to the prosecution of the action or claim.
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(b) Except as provided in par. (e), if an action or claim is one in which the court
24or other adjudicator finds to be based primarily upon disclosures of specific
25information not provided by the person who brings an action under sub. (5) relating
1to allegations or transactions specifically in a criminal, civil, or administrative
2hearing, or in a legislative or administrative report, hearing, audit, or investigation,
3or report made by the news media, the court or other adjudicator may award such
4amount as it considers appropriate, but not more than 10 percent of the proceeds of
5the action or settlement of the claim, depending upon the significance of the
6information and the role of the person bringing the action in advancing the
7prosecution of the action or claim.
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(c) Except as provided in par. (e), in addition to any amount received under par.
9(a) or (b), a person bringing an action under sub. (5) shall be awarded his or her
10reasonable expenses necessarily incurred in bringing the action together with the
11person's costs and reasonable actual attorney fees. The court or other adjudicator
12shall assess any award under this paragraph against the defendant.
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(d) Except as provided in par. (e), if the state does not proceed with an action
14or an alternate proceeding under sub. (10), the person bringing the action shall
15receive an amount that the court decides is reasonable for collection of the civil
16penalty and damages. The amount shall be not less than 25 percent and not more
17than 30 percent of the proceeds of the action and shall be paid from the proceeds. In
18addition, the person shall be paid his or her expenses, costs, and fees under par. (c).
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(e) Whether or not the state proceeds with the action or an alternate proceeding
20under sub. (10), if the court or other adjudicator finds that an action under sub. (5)
21was brought by a person who planned or initiated the violation upon which the action
22or proceeding is based, then the court may, to the extent that the court considers
23appropriate, reduce the share of the proceeds of the action that the person would
24otherwise receive under par. (a), (b), or (d), taking into account the role of that person
25in advancing the prosecution of the action or claim and any other relevant
1circumstance pertaining to the violation, except that if the person bringing the action
2is convicted of criminal conduct arising from his or her role in a violation of sub. (2),
3the court or other adjudicator shall dismiss the person as a party and the person shall
4not receive any share of the proceeds of the action or claim or any expenses, costs, and
5fees under par. (c).
AB652,9,10
6(12) Except if the action is brought by the attorney general or the person
7bringing the action is an original source of the information, the court shall dismiss
8an action or claim under this section, unless opposed by the state, if substantially the
9same allegations or transactions as alleged in the action or claim were publicly
10disclosed in any of the following ways:
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(a) In a federal criminal, civil, or administrative hearing in which the state or
12its agent is a party.
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(b) In a congressional, government accountability office, or other federal report,
14hearing, audit, or investigation.
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(c) From the news media.
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16(13) The state is not liable for any expenses incurred by a private person in
17bringing an action under sub. (5).
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18(14) Any employee, contractor, or agent who is discharged, demoted,
19suspended, threatened, harassed, or in any other manner discriminated against in
20the terms and conditions of employment because of lawful actions taken by the
21employee, contractor, agent, or by others in furtherance of an action or claim filed
22under this section or on behalf of the employee, contractor, or agent, including
23investigation for, initiation of, testimony for, or assistance in an action or claim filed
24or to be filed under sub. (5) is entitled to all necessary relief to make the employee,
25contractor, or agent whole. Such relief shall in each case include reinstatement with
1the same seniority status that the employee, contractor, or agent would have had but
2for the discrimination, 2 times the amount of back pay, interest on the back pay at
3the legal rate, and compensation for any special damages sustained as a result of the
4discrimination, including costs and reasonable attorney fees. An employee,
5contractor, or agent may bring an action to obtain the relief to which the employee,
6contractor, or agent is entitled under this subsection within 3 years after the date the
7retaliation occurred.
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8(15) A civil action may be brought based upon acts occurring prior to October
927, 2007, if the action is brought within the period specified in s. 893.9815.
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10(16) A judgment of guilty entered against a defendant in a criminal action in
11which the defendant is charged with fraud or making false statements estops the
12defendant from denying the essential elements of the offense in any action under sub.
13(5) that involves the same elements as in the criminal action.