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New York's New False Claims Act

Buried in New York's Health and Mental Hygiene Budget Bill for FY2007-08 is the new "New York False Claims Act," appearing in Article XIII, page 133 of the bill signed into law by Governor Spitzer April 9, 2007 as Chapter 58 of the Laws of 2007. The law is effective immediately.

The new law establishes a minimum penalty of $6,000 per claim (maximum of $12,000) for submitting a false or fraudulent claim. It applies not only to Medicaid claims but to

"any request or demand, whether under a contract or otherwise, for money or property which is made to any employee, officer, or agent of the state or a local government, or to any contractor, grantee or other recipient, if the state or a local government provides any portion of the money or property which is requested or demanded or will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded."
The Attorney General has jurisdiction to investigate state false claims, and there are "qui tam" provisions as well that provide financial incentives of up to 30% for false claims whistleblowers.

Interestingly, Governor Spitzer had pushed for both a false claims act and a "Martin Act" to combat health care fraud in his first State of the State address. Yet the False Claims Act was signed and has taken effect with next to no fanfare. Indeed, Attorney General Cuomo's press release accompanying the appointment of Heidi Wendel, which took place eight days after the New York False Claims Act bill was signed, contains no mention of the new state law. This causes one to suspect that the Martin Act provisions are the real centerpiece of the Governor's Medicaid Reform push.

For those wondering, the Martin Act can be found at Article 23-A of the General Business Law, and grants the Attorney General broad investigatory and prosecutorial powers concerning the offering and sale of securities in New York. The Martin Act was the principal platform upon which Eliot Spitzer stood as then-Attorney General in his highly public campaign to "clean up" Wall Street. The Martin Act's sweeping breadth permitted Spitzer to subpoena the e-mails of Merrill Lynch employees who were privately deriding investments that they were currently publicly recommending.

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This page contains a single entry from the blog posted on April 30, 2007 4:25 PM.

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