House Bill 4001 was reported to the floor earlier in the session from the House Judiciary Committee. However, concerns from the business sector lead House leadership to request the bill be sent back to address those concerns.
With the changes, the bill creates that False Claims and Taxpayer Protection Act. In essence it provides incentives for whistleblowers to report fraudulent claims to the state with protection from harassment and a portion of the winnings if the case is successful.
The Act is based on qui tam federal law and the new committee substitute utilizes some language from Virginia’s act to clear up issues that opponents felt harmed business.
Opponents of the bill were not satisfied with the updated language, saying it would still allow employees to bring frivolous charges against businesses in an attempt to earn money with a “Sue and Settle” case claiming that eighty percent of these fraud cases end in out of court settlements.
Delegate John Shott said the bill is a gamble at the expense of businesses.
So what we’ve done basically is created what should be called the ‘Qui Tam Lottery Act’ which is we’ve created a possibility that somebody may recover a lot of money when we don’t even know if there’s a source of that money out there,” Shott said. “In other words, we don’t know if there’s fraud going on and we certainly know that it is of the scope that would justify this type of change in our law.”
A portion of the Virginia bill that was excluded from the new substitute was the section dealing with claims of Medicaid fraud due to the fact that West Virginia already has an agency that deals with such claims.
Debate continued as two amendments to cap attorney fees and create a loser pays scenario in cases not taken up by the state failed.
Delegate Stephen Skinner said that it was an easy decision to support the bill because the benefits outweigh the concerns.
“Just today we heard from the Medicaid Fraud Unit that they need people,” Skinner said. “They can’t fill positions in the Medicaid Fraud Unit because we don’t have the money to pay them. This is a great bill that allows us to reach out into the private sector and incentivise [sic] whistleblowers to turn it in at no expense, at zero expense to the state of West Virginia.”
The bill passed the committee by a vote of 15-9 and will once again be reported to the House floor.