Report: Wisconsin has lost $11M for repealing False Claims Act

Wisconsin has lost out on an estimated $11 million in Medicaid fraud settlement money since 2013 because it weakened and then repealed its False Claims Act, according to a report from the Wisconsin Center for Investigative Journalism.

Wisconsin is the only state to ever repeal the False Claims Act, according to the report. Thirty states continue to have False Claims laws, and an additional 13 have laws that function similarly in terms of recouping funds when Medicaid is defrauded.

Wisconsin's False Claims Act became noncompliant in 2011 when the federal government issued new requirements. The state declined to update its law and gave up a 10 percent share of fraud recoveries given to states with such laws. Later on, the state gave up additional incentive payments associated with the law, according to the report. Wisconsin repealed the False Claims Act as part of the 2015-17 budget.

This means Wisconsin is losing out on money associated with national fraud settlements. For example, the state will receive $3.4 million as part of a national settlement with Mylan for underpaying EpiPen rebates to Medicaid. In this settlement, Wisconsin lost out on nearly $700,000 due to the repeal of the False Claims Act, according to the report.

The repeal was supported by business lobbies that opposed its qui tam provision, which allows whistle-blowers and their attorneys to win a portion of the penalty. Businesses felt this provision turned citizens into "bounty hunters," according to the report. However, without this provision, opponents of repeal say there is less incentive to report fraud — and historically 88 percent of healthcare fraud cases were brought by whistle-blowers, not the government, according to the report.

The Wisconsin Center for Investigative Journalism notes the state's Medicaid fraud unit is still receiving referrals, and sources have said it may be too early to tell if the repeal has had an effect on whistle-blower behavior.

Read the full report here.


More articles on legal and regulatory issues:

U of Wisconsin Health sued over former employee's unauthorized access of medical records
Former Providence Hospital executive sentenced to prison for stealing $391k from medical association
Chicago hospital sues Leapfrog for defamation

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars