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2023 - 2024 LEGISLATURE
2023 ASSEMBLY BILL 1186
April 9, 2024 - Introduced by Representatives SUBECK, RATCLIFF and PALMERI,
cosponsored by Senator SMITH. Referred to Committee on Judiciary.
***AUTHORS SUBJECT TO CHANGE***
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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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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(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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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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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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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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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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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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circumstance pertaining to the violation, except that if the person bringing the action
is convicted of criminal conduct arising from his or her role in a violation of sub. (2),
the court or other adjudicator shall dismiss the person as a party and the person shall
not receive any share of the proceeds of the action or claim or any expenses, costs, and
fees under par. (c).
(12) Except if the action is brought by the attorney general or the person
bringing the action is an original source of the information, the court shall dismiss
an action or claim under this section, unless opposed by the state, if substantially the
same allegations or transactions as alleged in the action or claim were publicly
disclosed in any of the following ways:
(a) In a federal criminal, civil, or administrative hearing in which the state or
its agent is a party.
(b) In a congressional, government accountability office, or other federal report,
hearing, audit, or investigation.
(c) From the news media.
(13) The state is not liable for any expenses incurred by a private person in
bringing an action under sub. (5).
(14) Any employee, contractor, or agent who is discharged, demoted,
suspended, threatened, harassed, or in any other manner discriminated against in
the terms and conditions of employment because of lawful actions taken by the
employee, contractor, agent, or by others in furtherance of an action or claim filed
under this section or on behalf of the employee, contractor, or agent, including
investigation for, initiation of, testimony for, or assistance in an action or claim filed
or to be filed under sub. (5) is entitled to all necessary relief to make the employee,
contractor, or agent whole. Such relief shall in each case include reinstatement with
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the same seniority status that the employee, contractor, or agent would have had but
for the discrimination, 2 times the amount of back pay, interest on the back pay at
the legal rate, and compensation for any special damages sustained as a result of the
discrimination, including costs and reasonable attorney fees. An employee,
contractor, or agent may bring an action to obtain the relief to which the employee,
contractor, or agent is entitled under this subsection within 3 years after the date the
retaliation occurred.
(15) A civil action may be brought based upon acts occurring prior to the
effective date of this subsection .... [LRB inserts date], if the action is brought within
the period specified in s. 893.9815.
(16) A judgment of guilty entered against a defendant in a criminal action in
which the defendant is charged with fraud or making false statements estops the
defendant from denying the essential elements of the offense in any action under sub.
(5) that involves the same elements as in the criminal action.
(17) The remedies provided for under this section are in addition to any other
remedies provided for under any other law or available under the common law.
(18) This section shall be liberally construed and applied to promote the public
interest and to effect the congressional intent in enacting 31 USC 3729 to 3733, as
reflected in the act and the legislative history of the act.
SECTION 2. 49.485 of the statutes is renumbered 49.485 (2) and amended to
read:
49.485 (2) Whoever knowingly presents or causes to be presented to any officer,
employee, or agent of this state a false claim for medical assistance Except as
provided under s. 20.9315 (3), whoever commits an act in violation of s. 20.9315 (2)
shall forfeit not less than $5,000 nor more than $10,000 an amount within the range
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specified under 31 USC 3729 (a), as adjusted, plus 3 times the amount of the damages
that were sustained by the state or would have been sustained by the state,
whichever is greater, as a result of the false claim. The attorney general may bring
an action on behalf of the state to recover any forfeiture incurred under this section.
SECTION 3. 49.485 (1) of the statutes is created to read:
49.485 (1) In this section, “claim” has the meaning given in s. 20.9315.
SECTION 4. 165.25 (11m) of the statutes is created to read:
165.25 (11m) FALSE CLAIMS. Diligently investigate possible violations of s.
20.9315 and, if the department determines that a person has committed an act that
is punishable under s. 20.9315, may bring a civil action against that person.
SECTION 5. 801.02 (1) of the statutes is amended to read:
801.02 (1) A Except as provided in s. 20.9315 (5) (b), a civil action in which a
personal judgment is sought is commenced as to any defendant when a summons and
a complaint naming the person as defendant are filed with the court, provided service
of an authenticated copy of the summons and of the complaint is made upon the
defendant under this chapter within 90 days after filing.
SECTION 6. 803.09 (1) of the statutes is amended to read:
803.09 (1) Upon Except as provided in s. 20.9315, upon timely motion anyone
shall be permitted to intervene in an action when the movant claims an interest
relating to the property or transaction which is the subject of the action and the
movant is so situated that the disposition of the action may as a practical matter
impair or impede the movant's ability to protect that interest, unless the movant's
interest is adequately represented by existing parties.
SECTION 7. 803.09 (2) of the statutes is amended to read:
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SECTION 7 ASSEMBLY BILL 1186
803.09 (2) Upon Except as provided in s. 20.9315, upon timely motion anyone
may be permitted to intervene in an action when a movant's claim or defense and the
main action have a question of law or fact in common. When a party to an action
relies for ground of claim or defense upon any statute or executive order or rule
administered by a federal or state governmental officer or agency or upon any
regulation, order, rule, requirement or agreement issued or made pursuant to the
statute or executive order, the officer or agency upon timely motion may be permitted
to intervene in the action. In exercising its discretion the court shall consider
whether the intervention will unduly delay or prejudice the adjudication of the rights
of the original parties.
SECTION 8. 804.01 (2) (intro.) of the statutes is amended to read:
804.01 (2) SCOPE OF DISCOVERY. (intro.) Unless Except as provided in s. 20.9315
(9), and unless otherwise limited by order of the court in accordance with the
provisions of this chapter, the scope of discovery is as follows:
SECTION 9. 805.04 (1) of the statutes is amended to read:
805.04 (1) BY PLAINTIFF; BY STIPULATION. An Except as provided in sub. (2p), an
action may be dismissed by the plaintiff without order of court by serving and filing
a notice of dismissal at any time before service by an adverse party of responsive
pleading or motion or by the filing of a stipulation of dismissal signed by all parties
who have appeared in the action. Unless otherwise stated in the notice of dismissal
or stipulation, the dismissal is not on the merits, except that a notice of dismissal
operates as an adjudication on the merits when filed by a plaintiff who has once
dismissed in any court an action based on or including the same claim.
SECTION 10. 805.04 (2p) of the statutes is created to read:
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805.04 (2p) FALSE CLAIMS. An action filed under s. 20.9315 may be dismissed
only by order of the court. In determining whether to dismiss the action filed under
s. 20.9315, the court shall take into account the best interests of the parties and the
purposes of s. 20.9315.
SECTION 11. 893.9815 of the statutes is created to read:
893.9815 False claims. An action or claim under s. 20.9315 shall be
commenced within 10 years after the cause of the action or claim accrues or be
barred.
(END)
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