Bill Summary – FastDemocracy

- 2024 LEGISLATURE
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                      2023 SENATE BILL 1092
    March 18, 2024 - Introduced by Senator SMITH, cosponsored by Representatives
        SUBECK, RATCLIFF and PALMERI. Referred to Committee on Judiciary and
        Public Safety.
 AN ACT      to renumber and amend 49.485; to amend 801.02 (1), 803.09 (1),
      803.09 (2), 804.01 (2) (intro.) and 805.04 (1); and to create 20.9315, 49.485 (1),
      165.25 (11m), 805.04 (2p) and 893.9815 of the statutes; relating to: restoring
      private individual authority to bring a qui tam claim against a person for
      making a false claim for medical assistance, actions by the attorney general
      against a person for making a false claim for medical assistance, and providing
      a penalty.
                     Analysis by the Legislative Reference Bureau
         This bill restores a private individual's authority to bring a qui tam claim
    against a person who makes a false claim for medical assistance, which was
    eliminated in 2015 Wisconsin Act 55. A qui tam claim, as it relates to the Medical
    Assistance program under the bill, is a claim initiated by a private individual on his
    or her own behalf and on behalf of the state against a person who makes a false claim
    for medical assistance. The bill restores the language prior to the enactment of 2015
    Wisconsin Act 55 that stated that, of moneys recovered as a result of a qui tam claim,
    a private individual may be awarded up to 30 percent of the amount recovered,
    depending upon certain factors, including the individual's role in advancement of the
    prosecution of the action. The individual may also be entitled to reasonable expenses
    incurred in bringing the action, as well as attorney fees. This bill also includes
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     SENATE BILL 1092
     additional changes not included in the prior law to conform state law to the federal
     False Claims Act, including expanding provisions to facilitate qui tam actions and
     modifying the bases for liability to parallel the liability provisions under the federal
     False Claims Act. In addition to qui tam claims, the Department of Justice has
     independent authority to bring a claim against a person for making a false claim for
     medical assistance. This bill modifies provisions relating to DOJ's authority to
     parallel the liability and penalty standards relating to qui tam claims, specifically,
     applying the definition of the term “claim” and the forfeiture amounts provided
     under the federal False Claims Act.
          For further information see the state fiscal estimate, which will be printed as
     an appendix to this bill.
     The people of the state of Wisconsin, represented in senate and assembly, do
         enact as follows:
      SECTION 1. 20.9315 of the statutes is created to read:
      20.9315 False claims for medical assistance; actions by or on behalf of
 state. (1) In this section:
      (b) “Claim” has the meaning given in 31 USC 3729 (b) (2).
      (d) “Knowingly" means, with respect to information, having actual knowledge
 of the information, acting in deliberate ignorance of the truth or falsity of the
 information, or acting in reckless disregard of the truth or falsity of the information.
 “Knowingly" does not mean specifically intending to defraud.
      (de) “Material” means having a natural tendency to influence, or be capable of
 influencing, the payment or receipt of money or property.
      (dm) “Medical assistance" has the meaning given under s. 49.43 (8).
      (dr) “Obligation” has the meaning given in 31 USC 3729 (b) (3).
      (dt) “Original source” has the meaning given in 31 USC 3730 (e) (4) (B).
      (e) “Proceeds" includes damages, civil penalties, surcharges, payments for costs
 of compliance, and any other economic benefit realized by this state as a result of an
 action or settlement of a claim.
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     SENATE BILL 1092                                                             SECTION 1
      (2) Except as provided in sub. (3), any person who does any of the following is
 liable to this state for 3 times the amount of the damages that were sustained by the
 state or would have been sustained by the state, whichever is greater, because of the
 actions of the person, and shall forfeit, for each violation, an amount within the range
 specified under 31 USC 3729 (a):
      (a) Knowingly presents or causes to be presented a false or fraudulent claim
 for medical assistance.
      (b) Knowingly makes, uses, or causes to be made or used a false record or
 statement material to a false or fraudulent claim for medical assistance.
      (dg) Knowingly makes, uses, or causes to be made or used a false record or
 statement material to an obligation to pay or transmit money or property to the
 Medical Assistance program, or knowingly conceals or knowingly and improperly
 avoids or decreases an obligation to pay or transmit money or property to the Medical
 Assistance program.
      (dr) Conspires to commit a violation under par. (a), (b), or (dg).
      (3) The court may assess against a person who violates sub. (2) not less than
 2 nor more than 3 times the amount of the damages sustained by the state because
 of the acts of the person, and shall not assess any forfeiture, if the court finds all of
 the following:
      (a) The person who commits the acts furnished the attorney general with all
 information known to the person about the acts within 30 days after the date on
 which the person obtained the information.
      (b) The person fully cooperated with any investigation of the acts by this state.
      (c) At the time that the person furnished the attorney general with information
 concerning the acts, no criminal prosecution or civil or administrative enforcement
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     SENATE BILL 1092                                                             SECTION 1
 action had been commenced with respect to any such act, and the person did not have
 actual knowledge of the existence of any investigation into any such act.
      (5) (a) Except as provided in subs. (10) and (12), any person may bring a civil
 action as a qui tam plaintiff against a person who commits an act in violation of sub.
 (2) for the person and the state in the name of the state.
      (b) The plaintiff shall serve upon the attorney general a copy of the complaint
 and documents disclosing substantially all material evidence and information that
 the person possesses. The plaintiff shall file a copy of the complaint with the court
 for inspection in camera. Except as provided in par. (c), the complaint shall remain
 under seal for a period of 60 days from the date of filing and shall not be served upon
 the defendant until the court so orders. Within 60 days from the date of service upon
 the attorney general of the complaint, evidence, and information under this
 paragraph, the attorney general may intervene in the action.
      (bm) Any complaint filed by the state in intervention, whether filed separately
 or as an amendment to the qui tam plaintiff's complaint, shall relate back to the filing
 date of the qui tam plaintiff 's complaint, to the extent that the state's claim arises
 out of the conduct, transactions, or occurrences set forth, or attempted to be set forth,
 in the qui tam plaintiff 's complaint.
      (c) The attorney general may, for good cause shown, move the court for one or
 more extensions of the period during which a complaint in an action under this
 subsection remains under seal.
      (d) Before the expiration of the period during which the complaint remains
 under seal, the attorney general shall do one of the following:
      1. Proceed with the action or an alternate remedy under sub. (10), in which case
 the action or proceeding under sub. (10) shall be prosecuted by the state.
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     SENATE BILL 1092                                                          SECTION 1
      2. Notify the court that he or she declines to proceed with the action, in which
 case the person bringing the action may proceed with the action.
      (e) If a person brings a valid action under this subsection, no person other than
 the state may intervene or bring a related action while the original action is pending
 based upon the same facts underlying the pending action.
      (f) In any action or other proceeding under sub. (10) brought under this
 subsection, the plaintiff is required to prove all essential elements of the cause of
 action or complaint, including damages, by a preponderance of the evidence.
      (6) If the state proceeds with an action under sub. (5) or an alternate remedy
 under sub. (10), the state has primary responsibility for prosecuting the action or
 proceeding under sub. (10). The state is not bound by any act of the person bringing
 the action, but that person has the right to continue as a party to the action.
      (7) (b) With the approval of the governor, the attorney general may compromise
 and settle an action under sub. (5) or an administrative proceeding under sub. (10)
 to which the state is a party, notwithstanding objection of the person bringing the
 action, if the court determines, after affording to the person bringing the action the
 right to a hearing at which the person is allowed the opportunity to present evidence
 in opposition to the proposed settlement, that the proposed settlement is fair,
 adequate, and reasonable considering the relevant circumstances pertaining to the
 violation.
      (c)     Upon a showing by the state that unrestricted participation in the
 prosecution of an action under sub. (5) or an alternate proceeding to which the state
 is a party by the person bringing the action would interfere with or unduly delay the
 prosecution of the action or proceeding, or would result in consideration of
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     SENATE BILL 1092                                                            SECTION 1
 repetitious or irrelevant evidence or evidence presented for purposes of harassment,
 the court may limit the person's participation in the prosecution, such as:
      1. Limiting the number of witnesses that the person may call.
      2. Limiting the length of the testimony of the witnesses.
      3. Limiting the cross-examination of witnesses by the person.
      4. Otherwise limiting the participation by the person in the prosecution of the
 action or proceeding.
      (d)   Upon showing by a defendant that unrestricted participation in the
 prosecution of an action under sub. (5) or alternate proceeding under sub. (10) to
 which the state is a party by the person bringing the action would result in
 harassment or would cause the defendant undue burden or unnecessary expense, the
 court may limit the person's participation in the prosecution.
      (8) Except as provided in sub. (7), if the state elects not to participate in an
 action filed under sub. (5), the person bringing the action may prosecute the action.
 If the attorney general so requests, the attorney general shall, at the state's expense,
 be served with copies of all pleadings and deposition transcripts in the action. If the
 person bringing the action initiates prosecution of the action, the court, without
 limiting the status and rights of that person, may permit the state to intervene at a
 later date upon showing by the state of good cause for the proposed intervention.
      (9) Whether or not the state participates in an action under sub. (5), upon
 showing in camera by the attorney general that discovery by the person bringing the
 action would interfere with the state's ongoing investigation or prosecution of a
 criminal or civil matter arising out of the same facts as the facts upon which the
 action is based, the court may stay such discovery in whole or in part for a period of
 not more than 60 days. The court may extend the period of any such stay upon
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     SENATE BILL 1092                                                             SECTION 1
 further showing in camera by the attorney general that the state has pursued the
 criminal or civil investigation of the matter with reasonable diligence and the
 proposed discovery in the action brought under sub. (5) will interfere with the
 ongoing criminal or civil investigation or prosecution.
      (10) The attorney general may pursue a claim relating to an alleged violation
 of sub. (2) through an alternate remedy available to the state or any state agency,
 including an administrative proceeding to assess a civil forfeiture. If the attorney
 general elects any such alternate remedy, the attorney general shall serve timely
 notice of his or her election upon the person bringing the action under sub. (5), and
 that person has the same rights in the alternate venue as the person would have had
 if the action had continued under sub. (5). Any finding of fact or conclusion of law
 made by a court or by a state agency in the alternate venue that has become final is
 conclusive upon all parties named in an action under sub. (5). For purposes of this
 subsection, a finding or conclusion is final if it has been finally determined on appeal,
 if all time for filing an appeal or petition for review with respect to the finding or
 conclusion has expired, or if the finding or conclusion is not subject to judicial review.
      (11) (a) Except as provided in pars. (b) and (e), if the state proceeds with an
 action brought by a person under sub. (5) or the state pursues an alternate remedy
 relating to the same acts under sub. (10), the person who brings the action shall
 receive at least 15 percent but not more than 25 percent of the proceeds of the action
 or settlement of the claim, depending upon the extent to which the person
 contributed to the prosecution of the action or claim.
      (b) Except as provided in par. (e), if an action or claim is one in which the court
 or other adjudicator finds to be based primarily upon disclosures of specific
 information not provided by the person who brings an action under sub. (5) relating
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     SENATE BILL 1092                                                              SECTION 1
 to allegations or transactions specifically in a criminal, civil, or administrative
 hearing, or in a legislative or administrative report, hearing, audit, or investigation,
 or report made by the news media, the court or other adjudicator may award such
 amount as it considers appropriate, but not more than 10 percent of the proceeds of
 the action or settlement of the claim, depending upon the significance of the
 information and the role of the person bringing the action in advancing the
 prosecution of the action or claim.
      (c) Except as provided in par. (e), in addition to any amount received under par.
 (a) or (b), a person bringing an action under sub. (5) shall be awarded his or her
 reasonable expenses necessarily incurred in bringing the action together with the
 person's costs and reasonable actual attorney fees. The court or other adjudicator
 shall assess any award under this paragraph against the defendant.
      (d) Except as provided in par. (e), if the state does not proceed with an action
 or an alternate proceeding under sub. (10), the person bringing the action shall
 receive an amount that the court decides is reasonable for collection of the civil
 penalty and damages. The amount shall be not less than 25 percent and not more
 than 30 percent of the proceeds of the action and shall be paid from the proceeds. In
 addition, the person shall be paid his or her expenses, costs, and fees under par. (c).
      (e) Whether or not the state proceeds with the action or an alternate proceeding
 under sub. (10), if the court or other adjudicator finds that an action under sub. (5)
 was brought by a person who planned or initiated the violation upon which the action
 or proceeding is based, then the court may, to the extent that the court considers
 appropriate, reduce the share of the proceeds of the action that the person would
 otherwise receive under par. (a), (b), or (d), taking into account the role of that person
 in advancing the prosecution of the action or claim and any other relevant
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     SENATE BILL 1092