Gov. Malloy: Federal Approval Validates State's Effort to Eliminate Fraud

Press Release

Governor Dannel P. Malloy and Attorney General George Jepsen today announced that the federal government has validated the newly expanded False Claims Act, allowing the state to continue receiving a greater percentage of Medicaid dollars recovered than states without a federal approval. Connecticut"s False Claims Act authorizes the Attorney General to investigate and civilly prosecute false fraudulent claims for certain state programs like Medicaid.

"There is zero tolerance for theft of state funds," said Governor Dannel P. Malloy. "The combination of the new law and our new fraud-detection system is already working. Anyone who would make a false claim for state payment should know they will be caught and held accountable."

The Governor also noted that in November 2013, the state hired a company to create and implement a state-of-the-art fraud detection system that applies sophisticated analytic and data-mining tools to identify patterns of waste, fraud and abuse. That agreement has led to more than $75 million in fraudulent expenditures being identified in FY 2014 -- well above the $65 million budgeted target.

"We take allegations of fraud or abuse very seriously, and we will continue to work to hold accountable those who seek to defraud our taxpayers," said Attorney General George Jepsen. "The False Claims Act is a powerful tool, and the expansion authorized by the legislature and signed into law by Governor Malloy this year will give my office and my law enforcement partners even greater ability to investigate, recover against and deter fraudulent behavior."

Previously, the state's False Claims Act was limited to medical assistance programs administered by the Department of Social Services. Legislation proposed by the Governor and passed in 2014 extends the reach of the False Claims Act to:

-All health and human services agencies and programs

-State payments provided under health plans for state employees and retirees; and

-State-paid medical claims under Workers' Compensation

In most situations involving state payments under Connecticut's Medicaid program, the state is reimbursed by the federal government for 50 percent of the cost. Under the previous state False Claims Act, the state was authorized to (a) recover the money it paid from the state budget (approximately 50 percent of the claim), plus (b) one fifth of what the federal government had sent in reimbursement (10 percent of the claim). In a recent letter to Attorney General Jepsen, the United States federal Department of Health and Human Services' Office of the Inspector General confirmed that the new expanded False Claims Act continues to meet federal requirements and, thus, Connecticut will continue to receive the additional 10 percent on Medicaid recoveries.

"We had initial indications from the federal government that the proposed expansion would not jeopardize the 60 percent recovery the state can seek and, indeed, that has been confirmed," said Office of Policy and Management Secretary Benjamin Barnes. "Under this new authority, interagency cooperation and coordination will extend to these additional programs while, at the same time, we will continue to seek recovery on behalf of taxpayers for fraudulent Medicaid claims."

In July 2013, Governor Malloy created an Interagency Fraud Task Force to wage a coordinated and proactive effort to investigate and prosecute healthcare fraud directed at state healthcare and human service programs. The task force includes a number of Connecticut agencies and works with federal counterparts in the U. S. Attorney's Office and the Health and Human Services, Office of Inspector General -- Office of Investigations.

Source