Illinois State False Claims Act

Below, Tony Munter summarizes the Illinois False Claims Act. He is not an Illinois False Claims Act Lawyer. He does not practice in the jurisdiction of Illinois. 

Illinois has an expansive False Claims Act statute that has served the state well. The state was also a relatively early adopter of their false claims law, having enacted the Illinois act in 1991.

While the federal law traces its original adoption all the way back to the Civil War and the Lincoln Administration, the modern version of the law came into prominence as a result of amendments in 1986. Those 1986 amendments effectively restored the False Claims Act to viability after a long period in which individuals were unable to use the law as intended to sue on behalf of the government.

So, 1991 is a pretty early time for any state to have adopted this kind of law. Perhaps Illinois’ somewhat longer legal experience with false claims cases is the reason there appear to be quite a few successful claims from that state to review.

Under the Illinois False Claims Act (formerly called the Illinois Whistleblower Reward and Protection Act), the defendant is liable for any false claim when the state provides any portion of the funds. The “State” is defined to mean the State of Illinois and any agency of state government, including the system of state colleges and universities, any school district, community college district, county, municipality, municipal corporation, unit of local government, and any combination of the above under an intergovernmental agreement that includes provisions for a governing body of the agency created by the government. This typically means that if any state or municipal funds are involved, there is a pretty good chance a defendant can be held liable under this law.

State False Claims Resulting in Collections

Illinois has also been able to use the law to collect. The state participated in a successful false claims case involving both federal and Illinois claims, which resulted in a $48 million dollar verdict against the Amerigroup Corp. That verdict was trebled under both the federal and the Illinois laws.

According to the Illinois Attorney General’s office, “The jury found that Amerigroup illegally avoided pregnant women and other people with expensive health conditions while continuing to receive state and federal dollars that were paid with the understanding that Amerigroup was not engaging in health status discrimination.”

U.S. Attorney Patrick J. Fitzgerald indicated his support for the use of Federal and State cooperation in fighting false claims after this successful verdict, stating, “This case is an excellent example of how this office and our colleagues in the state Attorney General’s Office can work together with private attorneys under the whistleblower provisions of the [Illinois] False Claims Act to combat healthcare fraud.”

One thing to note, repeat, and support about the way Illinois Attorney General Lisa Madigan presented the facts of this case to the public: that office was not afraid to provide credit to the whistleblower or his attorneys. I like to see that.

According to a press release issued by Madigan’s office, “The verdict, following a three-week trial, comes after nearly four years of litigation originally filed by Amerigroup Illinois’ former head of government relations, Cleveland Tyson, under the False Claims Act and the Illinois Whistleblower Reward and Protection Act.”

Mr. Tyson was represented by lawyers with the firm of Goldberg, Kohn, who tried the case in cooperation with the government attorneys. The government attempted to impose civil fines on top of the jury award, and since Medicaid and Medicare claims each involve individual claims to the government, that argument met with some success.

In March 2007, U.S. District Judge Harry Leinenweber imposed additional civil penalties of $10,500 on each of 18,130 false claims for a total of more than $190 million, increasing Amerigroup’s total liability to $334,365,000.

Ultimately, the defendant agreed to settle everything for $225 million to drop any appeals. The civil fines added considerably to the amount imposed by the jury verdict.

Other Significant Results from the Illinois False Claims Act

Illinois has seen collections as a result of many other kinds of cases, including receiving a share of a recent case against Wyeth Pharmaceuticals for illegal drug marketing. The state also successfully prosecuted a group that misrepresented its eligibility to provide transportation services to patients.

The Illinois False Claims Act is similar to the federal law both in terms of the rewards it provides whistleblowers and the kinds of liability it can impose on defendants. The whistleblower can collect from 15 percent to 30 percent of the money recovered, and as we saw with the previously discussed case, the defendants are subject to treble damages and civil fines for violations of the state law. In addition, the City of Chicago—while also covered by the provisions of the Illinois False Claims Act—has enacted its own False Claims Act.