West Virginia Re-Examining Enactment of False Claims Legislation

On Thursday, the West Virginia House Judiciary Committee again sent legislation which would establish a West Virginia False Claims Act to the House of Delegates. 

According to House Judiciary Chairman Timothy Manchin, the leadership of the House asked the Judiciary Committee to re-examine the legislation because of concerns that the bill would result in a wave of baseless lawsuits.  Language in the bill has been changed to address this issue and the bill was returned to the full House of Delegates following a 15-9 vote. 

 HB4001, also known as the False Claims and Taxpayer Protection Act of 2014, is modeled after the federal False Claims Act and is intended to uncover and encourage the reporting of fraud which is being committed against the state.  The bill urges the reporting of suspicious activity involving taxpayer funds and gives the West Virginia Attorney General the power to investigate this fraud.  Individuals – both inside and outside the government – can bring suits against anyone who knowingly causes the state to pay a false claim and would share in the proceeds of any recovery which is obtained. 

In addition to the federal government, 29 states and the District of Columbia, have already enacted some type of false claims legislation.  In 2012, federal and state suits recovered $9 billion in taxpayer funds.  In fiscal year 2013, the federal government, alone, received $3.8 billion in settlements and judgments.  Some of those judgments are being appealed, though.

West Virginia currently receives up to about 30% of funds recovered in connection with Medicare fraud.  States that have false claims statutes approved by the federal government receive up to about 40% of the monies recovered. 

Mr. Manchin believes that the False Claims and Taxpayer Protection Act of 2014 has the potential to return up to $90 million a year to West Virginia taxpayers.  This money could then be used for road repair, in-home care for seniors and assistance for volunteer firefighters. 

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