BILL ANALYSIS �
AB 2492
Page 1
Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2492 (Blumenfield) - As Amended: April 16, 2012
Policy Committee: JudiciaryVote:7-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill amends certain provisions of the California False
Claims Act (CFCA) to conform to the Federal False Claims Act.
Specifically, this bill conforms to the federal law with respect
to:
1) Expanding the ability of the Attorney General (AG) and
other government prosecutors to contest dismissal of false
claims actions on the basis of public disclosure.
2) Allowing current and former government employees to file
a false claims action for Medi-Cal fraud without exhausting
internal procedures.
3) Authorizing the court to reduce the share of proceeds
that a qui tam plaintiff would otherwise receive if the
court finds that the action was brought by the person who
planned and initiated the underlying violation.
4) Increasing anti-retaliation protections for employees,
contractors or agents who pursue false claims actions.
5) Amending the statute of limitations for filing a false
claims complaint.
FISCAL EFFECT
1) Making the conforming changes described above preserves
the state's ability to continue receiving federal incentive
awards in Medicaid-related false claims recoveries. These
awards have been in the range of $20 million to $30 million
annually since 2008.
AB 2492
Page 2
2) Any additional costs to the AG would be absorbable, and
the courts may experience a minor increase in costs due to
additional filings under the CFCA.
COMMENTS
1) Background . The CFCA, like its federal counterpart the
False Claims Act (FCA), was created to address the problem
of companies or contractors who defraud state and local
governments of public funds by making false claims for
payment or reimbursement for their services. The CFCA
imposes strict civil penalties and liability for damages on
persons who commit any one of certain enumerated acts
relating to the submission to the government of a false
claim for money, property, or services in violation of the
act. The CFCA also allows an individual called the qui tam
plaintiff to bring a civil action for him/herself and for
the government. The qui tam plaintiff is generally a
whistleblower who exposes the fraud upon the government.
The CFCA encourages whistleblowers to come forward by
allowing a qui tam plaintiff who prevails to keep a certain
portion of any damages collected from the defendant, with
most of the remaining money restored to the public
treasury.
2) Purpose . Earlier this year, the Office of Inspector
General (OIG) of the U.S. Department of Health and Human
Services notified the California AG that the state is no
longer in compliance with federal law allowing California
to potentially recover the federal incentive awards on
Medicaid-related false claims recoveries. In its letter,
the OIG cited a list of specific provisions of the CFCA
that, in its determination, should be changed to assure
sufficient conformity with the federal False Claims Act in
order to preserve the state's eligibility to recover these
incentive funds. AB 2492 contains these changes.
3) Prior Legislation . AB 1196 (Blumenfield)/Chapter 277 of
2009, amended the CFCA to conform its structure to federal
law and to recast existing definitions to conform with
federal law and recent state case law.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081
AB 2492
Page 3