Statement from the Coalition Against insurance Fraud
In support of Maryland Senate Bill 279
False Health Claims Act of 2010
False claims acts are an unqualified success in helping to detect fraud and recover money falsely claimed against government programs. False claims acts on the national and state levels have recovered more than $20 billion since 1986.
“The false claims act creates deterrence and a powerful incentive for health care organizations to have strong compliance programs and play by the rules. ”The false claims act is a vital tool that has now been adopted by 25 states and more are on the way. State action in this area is needed because some false claims are state specific and do not rise to the level of federal action. Plus, the backlog of cases at the federal level is said to be at least in the hundreds.
These statutes empower and reward citizens who blow the whistle on government fraud and uncover schemes that likely would go undetected. Without the knowledge and assistance of people on the inside of these corporate schemes, the government has little chance of succeeding in recovering stolen money.
This act allows the government to partner with whistleblowers in bringing false claims to light. The proposal is well crafted in that it creates a relatively high bar to bring only the most egregious cases. It gives corporate employees a financial incentive to blow the whistle, but also contains safeguards against frivolous actions. It protects legitimate whistleblowers from retribution from the offending employer, as well.
Above all, it creates deterrence and a powerful incentive for health care organizations to have strong compliance programs and play by the rules. It also benefits honest businesses because it helps to weed out their competitors who chose to cheat. Private insurers also will gain because some of the same entities that are defrauding the state are ripping off insurance companies as well.
This is a win-win solution that benefits the state, its taxpayers, and employees of health care organizations. It also benefits the citizens whose health depends on the viability of state programs.
Enacting this law will result in additional recoveries for the state. In the very least, the formula for the split between federal/state actions would change from the current 50/50 to 60/40 in the state’s favor. Other states are seeing substantial recoveries and there’s no reason Maryland would not experience the same.
While increasing funds to the state treasury is a worthy goal, don’t enact this bill solely for that reason. Enact it because it’s the right thing to do. Enact it to help create an anti-fraud environment in Maryland to promote honest and ethical dealings between private business and the state.
Lastly, yesterday the Obama Administration unveiled anti-fraud proposals for health care that are some of the most advanced to date. It’s vital that states keep up. Our experience tell us that fraudsters gravitate to the weakest link in the system, and with the federal government and other states ramping up, Maryland must not become that weakest link.
Thank you.
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