1. Liability and Damages Provisions
Generally, the liability provisions under the CMAA are the same as the liability provisions under the federal FCA. An individual will be liable under the CMAA for the same violations that trigger liability in the federal FCA.5 For example, an individual will be liable for knowingly presenting or causing the presentation of a false or fraudulent claim for payment or approval, or knowingly making, using, or causing to be made or used a false record or statement material to a fraudulent claim.6 However, unlike its federal counterpart, the CMAA only covers fraudulent Medicaid claims.7
The damages provision in the CMAA is identical to the statutory language of the federal FCA and allows for three times the damages the state sustained and civil penalties ranging from $5,000 to $10,000 per claim.8 The defendant is also liable to the state for the cost to bring a civil suit to recover any penalties or damages.9 In addition, the CMAA mirrors the federal FCA by providing for the reduction of liability to not less than twice the amount of damages if the defendant voluntarily discloses the violations within thirty days of obtaining the information, if there is no criminal, civil, or administrative action yet taken on the violation, and if the defendant cooperates with the investigation.10
2. Procedural Issues
a. General Procedural Provisions
The CMAA allows a relator to bring a civil action for a violation of the statute on behalf of the relator and the state.11 Several of the other procedural provisions in the CMAA are the same as the federal statute, including the requirement that the relator file a copy of the complaint and written disclosure of all material information with the state;12 sealing requirement of at least sixty days and extensions for good cause;13 the state’s primary responsibility for litigating the action if it chooses to intervene and the right to limit the relator’s participation;14 and the state’s right to dismiss the case over the objection of the relator, as long as the state notifies the relator and provides an opportunity for a hearing.15 The state may also settle the case despite the relator’s objections as long as the court determines that the settlement is “fair, adequate, and reasonable under all circumstances.16 If the government decides not to intervene, the relator may then proceed with the litigation,17 but the state may intervene, without limiting the status and right of the relator, at a later date upon a showing of good cause.18
Both the federal and state statute also grant the government the right to order a stay of proceedings if the civil action would interfere with a criminal matter arising from the facts of the violation and the right to petition the court for an extension upon a showing that the state has pursued the criminal or civil investigation with “reasonable diligence.”19 Like the federal FCA, the Colorado statute also provides that the government or relator must prove all elements of the cause of action, including damages, by a preponderance of the evidence.20 In addition, both the federal FCA and the CMAA provide that, if a final judgment was rendered in favor of the government in a criminal proceeding, the defendant is estopped from denying the essential elements of the offense in any action brought pursuant to the statute that involves the same transactions.21
b. Statute of Limitations
The Colorado statute follows the same limitations period as the federal act.22 It provides that an action may not be brought more than six years after the date on which the violation is committed or more than three years after the date on which government officials knew or reasonably should have known of the material facts of the violation.23 In addition, an action may not be brought later than ten years after the violation occurred.24 Like the post-FERA federal FCA,25 the CMAA allows the state’s pleading to relate back to the filing date of the relator’s complaint for statute of limitations purposes if the state decides to intervene.26
3. Jurisdictional Bars to Actions
a. First to File Bar and Bar Against Members of Legislative, Executive or Judicial Branches
Like its federal counterpart, the CMAA provides jurisdictional bars to certain qui tam actions. The CMAA contains a first to file bar and a bar prohibiting actions against members of the judicial, executive and legislative branches.27 It also contains a bar against actions based on transactions or allegations that are the subject of another civil or administrative action to which the government is already a party.28
b. Public Disclosure Bar
The CMAA contains a public disclosure bar which prohibits the relator from bringing actions based upon “the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a legislative, administrative, or state auditor’s report, hearing, audit, or investigation, or from the news media, unless the action is brought by the state or the realtor is an original source of the information that is the basis for the action.”29
In order to be an “original source,” the CMAA requires that the relator have “direct and independent knowledge” of the information that the allegations are based on and have voluntarily provided the information to the attorney general before bringing an action under the statute.30 This used to be very similar to the federal FCA language, but the Patient Protection and Affordable Care Act (“the Affordable Care Act”)31 amended that section of the federal FCA in 2010.32 Colorado has not yet enacted these changes.
The CMAA, like the federal version, protects relators from retaliation.33 The damages recoverable under the state statute are almost identical to those recoverable under the federal FCA. Damages include reinstatement with the same seniority status and damages necessary to make the employee whole, such as double the back pay, interest on the back pay, and special damages, including litigation fees and reasonable attorney’s fees.34
5. Relator’s Share
The relator’s recovery under the CMAA is identical to the relator’s recovery under the federal FCA. If the state decides to intervene on an action, the relator is entitled to fifteen to twenty-five percent of the proceeds.35 If the state declines to intervene, the relator is entitled to twenty-five to thirty percent of the proceeds.36 Like the federal FCA, the statute allows for a reduction of the award to not more than ten percent of the proceeds if the suit is based upon public disclosure and the relator is not an original source.37 Both statutes also allow a reduction of the award if the relator “planned and initiated” the violation.38 If the relator is convicted of criminal conduct due to his role in the fraud, the relator shall be dismissed from the civil action and will not share in the proceeds.39 The CMAA allows a successful defendant to recover attorney’s fees and costs if the suit was filed for purposes of harassment or if the suit was frivolous or vexatious.40
Author of treatise,Federal False Claims Act and Qui Tam Litigation, Law Journal Press (2010), research source of the issues discussed in this article.
31 U.S.C. §§ 3729-3733. Federal False Claims Act.
Col. Rev. Stat. §§ 25.5-4-304 to 25.5-4-310. Colorado Medical Assistance Act.
Col. Rev. Stat. § 25.5-4-305.
Col. Rev. Stat. § 25.5-4-305. Compare 31 U.S.C. § 3729(a)(1).
Col. Rev. Stat. § 25.5-4-304 to 25.5-4-310.
Col. Rev. Stat. § 25.5-4-305. Compare 31 U.S.C. § 3729(a). The civil penalties under the federal FCA have now been raised to $5,500 and $11,000 to account for inflation. See Chapter 4, supra, for further discussion of this issue.
Col. Rev. Stat. § 25.5-4-305(3).
Col. Rev. Stat. § 25.5-4-305(2).
Col. Rev. Stat. § 25.5-4-306(2).
Col. Rev. Stat. § 25.5-4-306(2)(b).
Col. Rev. Stat. § 25.5-4-306(2)(b)-(c).
Col. Rev. Stat. § 25.5-4-306(3).
Col. Rev. Stat. § 25.5-4-306(3)(b)(I).
Col. Rev. Stat. § 25.5-4-306(3)(b)(II).
Col. Rev. Stat. § 25.5-4-306(3)(c).
Col. Rev. Stat. § 25.5-4-306(3)(d).
Col. Rev. Stat. § 25.5-4-307(3). Compare 31 U.S.C. § 3730(c)(4). The federal FCA states only that the “United States” must prove all elements by a preponderance of the evidence.
Col. Rev. Stat. § 25.5-4-307(4). Compare 31 U.S.C. § 3731(e).
Col. Rev. Stat. § 25.5-4-307(1).
Col. Rev. Stat. § 25.5-4-307(1)(b).
Fraud Recovery and Enforcement Act, Pub. L. No. 111-21. § 4, 123 Stat. 1623 (May 20, 2009).
Col. Rev. Stat. § 25.5-4-307(2). Compare 31 U.S.C. 3731(c).
Col. Rev. Stat. §§ 25.5-4-306(2)(e) & (5)(a). Compare 31 U.S.C. § 3730(b)(5) and (e)(2).
Col. Rev. Stat. § 25.5-4-306(5)(b).
Col. Rev. Stat. § 25.5-4-306(5)(c)(I).
Col. Rev. Stat. § 25.5-4-306(5)(c)(II). Compare 31 U.S.C. § 3730(e)(4)(A)-(B).
Patient Protection and Affordable Care Act (“the Affordable Care Act”), Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010).
31 U.S.C. §3730(e)(4)(B). In the amended version of the federal FCA, the definition of “original source” was changed and the amended law now allows a person to qualify as an “original source” if that person discloses the information to the government before the public disclosure is made or if they have “knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions.” In addition, in the amended version of the federal FCA, the court can only dismiss an action based upon a public disclosure if the government does not oppose the dismissal. Also, actions based on public disclosures are only barred if they are made in a criminal, civil, or administrative hearing in which the government is a party.
Col. Rev. Stat. § 25.5-4-306(7).
Col. Rev. Stat. § 25.5-4-306(7)(b). Compare 31 U.S.C. § 3730(h).
Col. Rev. Stat. § 25.5-4-306(4)(a)(I).
Col. Rev. Stat. § 25.5-4-306(4)(b).
Col. Rev. Stat. § 25.5-4-306(4)(a)(II).
Col. Rev. Stat. § 25.5-4-306(4)(c).
Col. Rev. Stat. § 25.5-4-306(4)(d).
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Colorado Medical Assistance Act
Colorado’s version of the Federal False Claims Act (FCA)2 is the Colorado Medical Assistance Act (CMAA).3 It is also known as the “Colorado Medicaid False Claims Act.”4
ABOUT THE AUTHOR: Joel M. Androphy1, Rachel Grier and Nisha Ghosh
Qui Tam Attorney, Joel Androphy, discusses the growing use of civil discovery to reveal the identity of the informers in related criminal cases.
Copyright Berg & Androphy
Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and.how they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.