Wisconsin Repeals State False Claims Act

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On July 12, 2015, the state of Wisconsin passed a budget that, along with many expected cuts, additions, and tweaks, unexpectedly repealed Wisconsin’s False Claims for Medical Assistance Act—the state’s version of the federal False Claims Act (“FCA”). The Wisconsin statute, which is a “Medicaid only” law (meaning that it prohibits only false claims submitted to Medicaid), provided significant protections to whistleblowers and allowed them to claim up to thirty percent of awards.

What is perplexing about this repeal is that it took place without any hearings or public debates and without any explanation by the lawmakers who introduced the bill. The amendment simply read, “Section 945n. 20.931 of the statutes is repealed.” Moreover, the repeal comes at a time when most states are bolstering whistleblower protections and incentives through passage of their own versions of the federal FCA. Although the repeal will save Wisconsin the cost of investigating qui tam cases filed under the statute, it is generally accepted that investigation costs are more than offset by funds that are ultimately recouped in settlements and judgments.

Because a significant portion of Medicaid funding comes from the federal government, claims of Medicaid fraud in Wisconsin may still be brought under the federal FCA. Thus, while this development reduces state resources available to whistleblowers, the federal government retains jurisdiction to combat fraud in Wisconsin’s Medicaid program.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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