Colorado False Claims Act

Tony Munter summarizes the Colorado False Claims Act below and compares it to Federal law. He is not licensed in the jurisdiction of Colorado.

The Colorado Medicaid False Claims Act (Colo. Rev. Stat. §§25.4-4-303.4 et seq.) is a relatively new False Claims law that creates incentives for whistleblowers to report violations with regard to Medicaid claims in the state, just as the Federal law provides for such incentives on a nationwide basis. Enacted in 2010, the Colorado law qualifies the State for higher reimbursements in cases involving a nationwide scheme to defraud government healthcare funds as contemplated by Section 1909 of the Social Security Act.

In order to qualify for that incentive, the Colorado law mirrors the Federal False Claims Act in many important respects. Crucially, it provides for appropriate rewards to whistleblowers when they bring an action under this law. Under the Federal False Claims Act, a nationwide scheme to defraud healthcare systems can be brought with state claims attached as part of a consolidated case.  The Colorado False Claims Act allows for whistleblowers to do this and receive their fair share of the reward.

Colorado Statutes and Medicaid

Whistleblowers may obtain a 15 to 30 percent share of Medicaid funds recovered through the Colorado law, just as they may obtain similar shares under similar conditions of a Federal Recovery. However, Colorado’s statute does have language that will make some old False Claims Act lawyers cringe to see. It is now outdated language requiring a claim to be “presented” to an officer employee or agent of the state.

This might be more of a problem if Colorado had enacted a general—as opposed to Medicaid-only—law, as the federal Statute had that requirement eliminated by amendment. Medicaid bills are at some point generally presented to somebody who could be considered an agent of the State, so while nobody likes to see us go back to fighting about presentation issues, the practical effect of this is probably minimal. Of course, we would be happiest if Colorado were to expand the scope of its False Claims Act and allow for claims involving any kind of fraud committed against the State to be the subject of a case, as the Federal law allows.

Qui Tam Action in Colorado

The Colorado False Claims Act does follow the Federal Law in terms of providing an anti-retaliation provision for whistleblowers, as well as with respect to allowing for a true qui tam action.  The Plaintiff-Relator can maintain a case without the support of the State., which may be the most important right to ensure that State officials investigate claims and that courts construe a case seriously.

The Attorney General has authority to issue Civil Investigative Demands and pursue claims as well, and the more authority the State has to get information that can corroborate the claims of a whistleblower, the better. Colorado’s law, like most State False Claims Acts and of course like the Federal law, makes it possible for whistleblowers to obtain rewards for doing the right thing and fighting fraud.

Absent such awards for whistleblowers, the rhetoric one hears about fighting fraud and abuse is empty. Whistleblowers must be in a position to obtain rewards or they simply are not in a position to fight and obtain counsel to help them.

That is why the Federal False Claims Act has been so successful and why Congress created incentives for States to enact similar legislation. Hopefully, the incentives provided to whistleblowers and to the State will create more successful recoveries in Colorado at both the Federal and State level.