WASHINGTON - April 28, 2010 - Senator  Chuck Grassley is working to make sure changes made to the federal False Claims Act are recognized and incorporated by the 14 states that passed state False Claims Act in response to a federal incentive aimed at reducing Medicaid fraud.

In a letter sent today, Grassley asked the Inspector General for the Department of Health and Human Services and the Attorney General to review existing state False Claims Acts for compliance with recent changes to the federal False Claims Act and to issue appropriate guidance for any state interested in the federal incentive, which allows states to increase their shares of Medicaid recoveries by 10 percent by allowing whistleblower lawsuits.  In addition to the 14 states which have qualified for this incentive, six states applied for it but did not meet the requirements.

"Updated information will help states fine tune existing state laws and state-level proposals, in order to be eligible for the federal incentive and beef up fraud-fighting efforts," Grassley said.  "This kind of effort at the state and federal level is more important than ever as Medicaid programs are expanded and face new burdens and growing fiscal challenges.  Every dollar lost to fraud is one less dollar for those who depend on the program and harms the sustainability of the Medicaid program."

The federal incentive for states to adopt whistleblower provisions as part of state laws on false claims was established by legislation Grassley got passed as part of the Deficit Reduction Act of 2005.  Additionally, in 1986, Grassley was the principal Senate sponsor of whistleblower amendments that updated the federal False Claims Act.  To date, those provisions have helped to recover $22 billion for the federal Treasury that otherwise would be lost to fraud.

Grassley said updated guidance is needed because of changes made to the federal False Claims Act during the last year.  In May 2009, the President signed the Fraud Enforcement Recovery Act, sponsored by Grassley and Senators Patrick Leahy and Ted Kaufman, which made major changes to strengthen the federal False Claims Act by removing liability loopholes and addressing statutory confusion.  Additional related, though less extensive changes, were made as part of the Patient Protection and Affordable Care Act enacted in March 2010, based upon legislation originally sponsored by Grassley and Senators Dick Durbin and Patrick Leahy.

"The federal False Claims Act has become the federal government's most effective tool against health care fraud, and a major factor in its success is the way that it empowers whistleblowers who know about wrongdoing.  They are the watchdogs that taxpayers and beneficiaries need working on their behalf, and the more states that recognize the value of whistleblowers in fighting fraud, the better," Grassley said.

Grassley is Ranking Member of the Finance Committee, with jurisdiction over Medicaid and Medicare, and a senior member of the Judiciary Committee, with jurisdiction over the False Claims Act.


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