Deskin Law Firm
Representing Individuals in False Claims Act Matters
STATE OF NEW JERSEY
PRE-FILED FOR INTRODUCTION IN THE 2008 SESSION
Senator JOHN H. ADLER
District 6 (Camden)
Senator JOSEPH F. VITALE
District 19 (Middlesex)
Establishes the "New Jersey False Claims Act."
AN ACT establishing the "New Jersey False Claims Act,"
supplementing Title 2A of the New Jersey Statutes and amending P.L.1968, c.413.
BE IT ENACTED by the Senate and General Assembly of the State of New Jersey:
1. (New section) Sections 1 through 15 of this act shall be known and may be cited as the "New Jersey False Claims Act."
2. (New section) As used in this act:
"Attorney General" means the Attorney General of the State of New Jersey, or his designee.
"Claim" means a request or demand, under a contract or otherwise, for money, property, or services that is made to any employee, officer, or agent of the State, or to any contractor, grantee, or other recipient if the State provides any portion of the money, property, or services requested or demanded, or if the State will reimburse the contractor, grantee, or other recipient for any portion of the money, property, or services requested or demanded.The term does not include claims, records, or statements made in
connection with State tax laws.
"Knowing" or "knowingly" means, with respect to information, that a person:
(1) has actual knowledge of the information; or
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information.
No proof of specific intent to defraud is required. Innocent mistake shall be a defense to an action under this act.
3. (New section) Any person who commits any of the following acts shall be jointly and severally liable to the State for a civil penalty of not less than and not more than the civil penalty allowed under the federal False Claims Act (31 U.S.C. s.3729 et seq.), as may be adjusted in accordance with the inflation adjustment procedures prescribed in the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub.L.101-410, for each false claim, plus three times the amount of damages which the State sustains because of the act of that person:
a. Knowingly presents or causes to be presented to an employee, officer or agent of the State, or to any contractor, grantee, or other recipient of State funds, a false claim for payment or approval;
b. Knowingly makes, 1 uses, or causes to be made or used a false
2 record or statement to get a false claim paid or approved by the
4 c. Conspires to defraud the State by getting a false claim
5 allowed or paid by the State;
6 d. Has possession, custody, or control of public property or
7 money used or to be used by the State and knowingly delivers or
8 causes to be delivered less property than the amount for which the
9 person receives a certificate or receipt;
10 e. Is authorized to make or deliver a document certifying
11 receipt of property used or to be used by the State and knowingly
12 makes or delivers a receipt that falsely represents the property used
13 or to be used;
14 f. Knowingly buys, or receives as a pledge of an obligation or
15 debt, public property from any person who lawfully may not sell or
16 pledge the property; or
17 g. Knowingly makes, uses, or causes to be made or used a false
18 record or statement to conceal, avoid, or decrease an obligation to
19 pay or transmit money or property to the State.
21 4. (New section) The court may reduce the treble damages
22 authorized under section 3 of this act to not less than twice the
23 amount of damages which the State sustains and may order that no
24 civil penalty be imposed if the court finds all of the following:
25 a. The person committing the violation furnished officials of
26 the State responsible for investigating false claims violations with
27 all information known to such person about the violation within 30
28 days after the date on which the person first obtained the
30 b. The person fully cooperated with any official investigation
31 of the violation; and
32 c. At the time such person furnished the State with information
33 about the violation, no criminal prosecution, civil action, or
34 administrative action had commenced with respect to such
35 violation, and the person did not have actual knowledge of the
36 existence of an investigation into such violation.
38 5. (New section) a. The Attorney General shall investigate a
39 violation of this act. If the Attorney General finds that a person has
40 violated or is violating this act, the Attorney General may bring a
41 civil action in Superior Court against the person.
42 b. A person may bring a civil action in Superior Court for a
43 violation of this act for the person and for the State. Civil actions
44 instituted under this act shall be brought in the name of the State of
45 New Jersey.
46 c. A complaint filed by a person under this act shall remain
47 under seal for up to 60 days and shall not be served on the
defendant until the court so orders. Once 1 filed, the action may be
2 voluntarily dismissed by the person bringing the action if the
3 Attorney General gives written consent to the dismissal along with
4 the reason for consenting, and the court approves the dismissal.
5 d. A complaint alleging a false claim filed under this act shall
6 be so designated when filed, in accordance with the Rules
7 Governing the Courts of the State of New Jersey. Immediately
8 upon filing of the complaint, the plaintiff shall serve by registered
9 mail, return receipt requested, the Attorney General with a copy of
10 the complaint and written disclosure of substantially all material
11 evidence and information the person possesses. The Attorney
12 General may elect to intervene and proceed with the action on
13 behalf of the State within 60 days after it receives both the
14 complaint and the material evidence and information.
15 e. If a person brings an action under this act and the action is
16 based upon the facts underlying a pending investigation by the
17 Attorney General, the Attorney General may take over the action on
18 behalf of the State. In order to take over the action, the Attorney
19 General shall give the person written notification within 30 days
20 after notice of the action is served on the Attorney General that the
21 Attorney General is conducting an investigation of the facts of the
22 action and will take over the action.
23 f. The Attorney General may, for good cause shown, request
24 that the court extend the time during which the complaint remains
25 under seal. Any such motion may be supported by affidavits or
26 other submissions in camera. No more than three motions for an
27 extension, each for a request of no more than a 90-day period, shall
28 be considered.
29 g. Before the expiration of the 60 day period or any extensions
30 obtained under subsection f., the Attorney General shall:
31 (1) file a pleading with the court that he intends to proceed with
32 the action, in which case the action is conducted by the Attorney
33 General and the seal shall be lifted; or
34 (2) file a pleading with the court that he declines to proceed
35 with the action, in which case the seal shall be lifted and the person
36 bringing the action shall have the right to conduct the action.
37 h. The defendantâ€™s answer to any complaint filed under this act
38 shall be filed in accordance with the Rules Governing the courts of
39 the State of New Jersey after the complaint is unsealed and served
40 upon the defendant.
41 i. When a person files an action under this act, no other person
42 except the State may intervene or bring a related action based on the
43 facts underlying the pending action.
45 6. (New section) a. If the Attorney General proceeds with the
46 action, the Attorney General shall have primary responsibility for
47 prosecuting the action, and shall not be bound by any act of the
person bringing the action. The person 1 bringing the action has the
2 right to continue as a party to the action, subject to limitations
3 specified in this act.
4 b. The Attorney General may move to dismiss the action for
5 good cause shown, notwithstanding the objections of the person
6 bringing the action, provided that the person bringing the action has
7 been notified by the Attorney General and the court has provided
8 the person bringing the action with the opportunity for a hearing.
9 c. Nothing in this act shall be construed to limit the authority
10 of the Attorney General or the person bringing the action to settle
11 the action, if the court determines after a hearing that the proposed
12 settlement is fair, adequate, and reasonable under all the
13 circumstances. Upon a showing of good cause, the hearing may be
14 held in camera.
15 d. Upon a showing by the Attorney General that unrestricted
16 participation during the course of the litigation by the person
17 initiating the action would interfere with or unduly delay the
18 Attorney General's prosecution of the case, or would be repetitious,
19 irrelevant, or for purposes of harassment, the court may, in its
20 discretion, impose limitations on the person's participation,
21 including, but not limited to:
22 (1) Limiting the number of witnesses the person may call;
23 (2) Limiting the length of the testimony of the person's
25 (3) Limiting the person's cross-examination of witnesses; or
26 (4) Otherwise limiting the participation by the person in the
28 e. Upon a showing by the defendant that unrestricted
29 participation during the course of the litigation by the person
30 initiating the action would be for purposes of harassment or would
31 cause the defendant undue burden or unnecessary expense, the court
32 may limit the participation by the person in the litigation.
33 f. If the Attorney General decides not to proceed with the
34 action, the seal shall be lifted and the person who initiated the
35 action shall have the right to conduct the action. If the Attorney
36 General so requests, the Attorney General shall be served at the
37 expense of the Attorney General with copies of all pleadings and
38 motions filed in the action and copies of all deposition transcripts.
39 When a person proceeds with the action, the court, without limiting
40 the rights of the person initiating the action, may permit the
41 Attorney General to intervene and take over the action on behalf of
42 the State at a later date upon showing of good cause.
43 g. Whether or not the Attorney General proceeds with the
44 action, upon a showing by the Attorney General that certain actions
45 of discovery by the person initiating the action would interfere with
46 an investigation by the State or the prosecution of a criminal or civil
47 matter arising out of the same facts, the court may stay such
48 discovery for a period of not more than 60 days. Such a showing
shall be conducted in camera. 1 The court may extend the 60-day
2 period upon a further showing in camera by the Attorney General
3 that the criminal or civil investigation or proceeding has been
4 pursued with reasonable diligence and any proposed discovery in
5 the civil action will interfere with an ongoing criminal or civil
6 investigation or proceeding.
7 h. The application of one civil remedy under this act shall not
8 preclude the application of any other remedy, civil, administrative
9 or criminal, under this act or any other provision of law. Civil and
10 administrative remedies under this act are supplemental, not
11 mutually exclusive. If after the filing of a complaint under section
12 5 of this act, the Attorney General decides to pursue an alternate
13 administrative recovery action under subsection (e) of section 17 of
14 P.L.1968, c.413 (C.30:4D-17), the plaintiff shall have the same
15 rights in the administrative recovery action as the plaintiff would
16 have had if the action had continued in Superior Court. Any finding
17 of fact or conclusion of law made in the proceeding under
18 subsection (e) of section 17 of P.L.1968, c.413 (C. 30:4D-17) that
19 has become final shall be conclusive on all parties to an action
20 initiated under section 5 of this act. As used in this subsection, the
21 term "final" means that the finding of fact or conclusion of law has
22 been finally determined on appeal to the appropriate court, all time
23 for filing such an appeal with respect to the finding or conclusion
24 has expired, or the finding or conclusion is not subject to judicial
27 7. (New section ) a. If the Attorney General proceeds with and
28 prevails in an action brought by a person under this act, except as
29 provided in subsection b., the court shall order the distribution to
30 the person of at least 15% but not more than 25% of the proceeds
31 recovered under any judgment obtained by the Attorney General
32 under this act or of the proceeds of any settlement of the claim,
33 depending upon the extent to which the person substantially
34 contributed to the prosecution of the action.
35 b. If the Attorney General proceeds with an action which the
36 court finds to be based primarily on disclosures of specific
37 information, other than that provided by the person bringing the
38 action, relating to allegations or transactions in a criminal, civil, or
39 administrative hearing; a legislative, administrative, or inspector
40 general report, hearing, audit, or investigation; or from the news
41 media, the court may award such sums as it considers appropriate,
42 but in no case more than 10% of the proceeds recovered under a
43 judgment or received in settlement of a claim under this act, taking
44 into account the significance of the information and the role of the
45 person bringing the action in advancing the case to litigation.
46 c. The Attorney General shall receive a fixed 10% of the
47 proceeds in any action or settlement of the claim that it brings,
which shall only be used to support its ongoing 1 investigation and
2 prosecution of false claims pursuant to the provisions of this act.
3 d. If the Attorney General does not proceed with an action
4 under this section, the person bringing the action or settling the
5 claim shall receive an amount which the court decides is reasonable
6 for collecting the civil penalty and damages. The amount shall be
7 not less than 25% and not more than 30% of the proceeds of the
8 action or settlement of a claim under this act.
9 e. Following any distributions under subsections a., b., c. or d.
10 of this section the State entity injured by the submission of a false
11 claim shall be awarded an amount not to exceed its compensatory
12 damages. Any remaining proceeds, including civil penalties
13 awarded under this act, shall be deposited in the General Fund.
14 f. Any payment under this section to the person bringing the
15 action shall be paid only out of the proceeds recovered from the
17 g. Whether or not the Attorney General proceeds with the
18 action, if the court finds that the action was brought by a person
19 who knowingly planned and initiated the violation of this act upon
20 which the action was brought, the court may, to the extent the court
21 considers appropriate, reduce the share of the proceeds of the action
22 which the person would otherwise receive under this section to no
23 more than 10%, taking into account the role of the person in
24 advancing the case to litigation and any relevant circumstances
25 pertaining to the violation. If the person bringing the action is
26 convicted of criminal conduct arising from his role in the violation
27 of this act the person shall be dismissed from the civil action and
28 shall not receive any share of the proceeds of the action. Such
29 dismissal shall not prejudice the right of the Attorney General to
30 continue the action.
32 8. (New section) a. If the Attorney General initiates an action
33 under this act or assumes control of an action brought by a person
34 under this act, the Attorney General shall be awarded its reasonable
35 attorney's fees, expenses, and costs.
36 b. If the court awards proceeds to the person bringing the
37 action under this act, the person shall also be awarded an amount
38 for reasonable attorney's fees, expenses, and costs. Payment for
39 reasonable attorney's fees, expenses, and costs shall be made from
40 the recovered proceeds before the distribution of any award.
41 c. If the Attorney General does not proceed with an action
42 under this act and the defendant is the prevailing party, the court
43 may award the defendant reasonable attorney's fees, expenses, and
44 costs against the person bringing the action if the court finds that
45 the claim of the person bringing the action was clearly frivolous,
46 clearly vexatious, or brought primarily for purposes of harassment.
d. No liability shall be incurred by the 1 State or the Attorney
2 General for any expenses, attorney's fees, or other costs incurred by
3 any person in bringing or defending an action under this act.
5 9. (New section) a. No member of the Legislature, a member
6 of the Judiciary, a senior Executive branch official, or a member of
7 a county or municipal governing body may be civilly liable if the
8 basis for an action is premised on evidence or information known to
9 the State when the action was brought. For purposes of this
10 subsection, the term "senior Executive branch official" means any
11 person employed in the Executive branch of government holding a
12 position having substantial managerial, policy-influencing or
13 policy-executing responsibilities.
14 b. A person may not bring an action under this act based upon
15 allegations or transactions that are the subject of a pending action or
16 administrative proceeding in the State.
17 c. No action brought under this act shall be based upon the
18 public disclosure of allegations or transactions in a criminal, civil,
19 or administrative hearing, in an investigation, report, hearing or
20 audit conducted by or at the request of the Legislature or by the
21 news media, unless the action is brought by the Attorney General,
22 or unless the person bringing the action is an original source of the
23 information. For purposes of this subsection, the term "original
24 source" means an individual who has direct and independent
25 knowledge of the information on which the allegations are based
26 and has voluntarily provided the information to the State before
27 filing an action under this act based on the information.
29 10. (New section) a. No employer shall make, adopt, or enforce
30 any rule, regulation, or policy preventing an employee from
31 disclosing information to a State or law enforcement agency or from
32 acting to further a false claims action, including investigating,
33 initiating, testifying, or assisting in an action filed or to be filed
34 under this act.
35 b. No employer shall discharge, demote, suspend, threaten,
36 harass, deny promotion to, or in any other manner discriminate
37 against an employee in the terms and conditions of employment
38 because of lawful acts done by the employee on behalf of the
39 employee or others in disclosing information to a State or law
40 enforcement agency or in furthering a false claims action, including
41 investigation for, initiation of, testimony for, or assistance in an
42 action filed or to be filed under this act.
43 c. An employer who violates subsection b. of this section shall
44 be liable for all relief necessary to make the employee whole,
45 including reinstatement with the same seniority status such
46 employee would have had but for the discrimination, two times the
47 amount of back pay, interest on the back pay, compensation for any
special damage sustained as a result 1 of the discrimination, and,
2 where appropriate, punitive damages. In addition, the defendant
3 shall be required to pay litigation costs and reasonable attorneys'
4 fees associated with an action brought under this section. An
5 employee may bring an action in the Superior Court for the relief
6 provided in this subsection.
7 d. An employee who is discharged, demoted, suspended,
8 harassed, denied promotion, or in any other manner discriminated
9 against in the terms and conditions of employment by his employer
10 because of participation in conduct which directly or indirectly
11 resulted in a false claim being submitted to the State shall be
12 entitled to the remedies under subsection c. of this section if, and
13 only if, both of the following occurred:
14 (1) The employee voluntarily disclosed information to a State or
15 law enforcement agency or acts in furtherance of a false claims
16 action, including investigation for, initiation of, testimony for, or
17 assistance in an action filed or to be filed.
18 (2) The employee had been harassed, threatened with
19 termination or demotion, or otherwise coerced by the employer or
20 its management into engaging in the fraudulent activity in the first
23 11. (New section) A civil action under this act may not be
25 a. More than six years after the date on which the violation of
26 the act is committed; or
27 b. More than three years after the date when facts material to
28 the right of action are known or reasonably should have been
29 known by the State official charged with responsibility to act in the
30 circumstances, but in no event more than 10 years after the date on
31 which the violation is committed, whichever occurs last.
33 12. (New section) In any action brought under this act, the State
34 or the person bringing the action shall be required to prove all
35 essential elements of the cause of action, including damages, by a
36 preponderance of the evidence.
38 13. (New section) All moneys recovered by the Attorney
39 General in accordance with the provisions of this act shall be
40 deposited in the General Fund.
42 14. (New section) a. If the Attorney General has reason to
43 believe that a person has engaged in, or is engaging in, an act or
44 practice which violates this act, or any other relevant statute or
45 regulation, the Attorney General or the Attorney General's designee
46 may administer oaths and affirmations, and request or compel the
47 attendance of witnesses or the production of documents. The
48 Attorney General may issue, or designate another to issue,
subpoenas to compel the attendance o 1 f witnesses and the production
2 of books, records, accounts, papers and documents. Witnesses shall
3 be entitled to receive the same fees and mileage as persons
4 summoned to testify in the courts of the State.
5 If a person subpoenaed pursuant to this section shall neglect or
6 refuse to obey the command of the subpoena, a judge of the
7 Superior Court may, on proof by affidavit of service of the
8 subpoena, of payment or tender of the fees required and of refusal
9 or neglect by the person to obey the command of the subpoena,
10 issue a warrant for the arrest of said person to bring that person
11 before the judge, who is authorized to proceed against the person as
12 for a contempt of court.
13 b. If the matter that the Attorney General seeks to obtain by
14 request is located outside the State, the person so required may
15 make it available to the Attorney General or the Attorney General's
16 representative to examine the matter at the place where it is located.
17 The Attorney General may designate representatives, including
18 officials of the state in which the matter is located, to inspect the
19 matter on behalf of the Attorney General, and the Attorney General
20 may respond to similar requests from officials of other states.
21 c. If a licensed professional, an owner, administrator or
22 employee of licensed professional, included but not limited to an
23 owner, administrator or employee of any hospital, an insurance
24 company, agent, broker, solicitor or adjuster, or any other person
25 licensed or certified by a licensing authority of this State, or an
26 agent, representative or employee of any of them is found to have
27 violated any provision of this section, the Attorney General shall
28 notify the appropriate licensing authority of the violation so that the
29 licensing authority may take appropriate administrative action.
30 d. State investigators shall not be subject to subpoena in civil
31 actions by any court of this State to testify concerning any matter of
32 which they have knowledge pursuant to a pending false claims
33 investigation by the State, or a pending claim for civil penalties
34 initiated by the State.
36 15. (New section) This act shall not be construed as waiving the
37 sovereign immunity of the State and its officers and employees as
38 otherwise provided by law.
40 16. Section 17 of P.L.1968, c.413 (C.30:4D-17) is amended to
41 read as follows:
42 17. (a) Any person who willfully obtains benefits under this act
43 to which he is not entitled or in a greater amount than that to which
44 he is entitled and any provider who willfully receives medical
45 assistance payments to which he is not entitled or in a greater
46 amount than that to which he is entitled is guilty of a high
47 misdemeanor and, upon conviction thereof, shall be liable to a
penalty of not more than $10,000.00 or 1 to imprisonment for not
2 more than 3 years or both.
3 (b) Any provider, or any person, firm, partnership, corporation
4 or entity, who:
5 (1) Knowingly and willfully makes or causes to be made any
6 false statement or representation of a material fact in any cost study,
7 claim form, or any document necessary to apply for or receive any
8 benefit or payment under this act; or
9 (2) At any time knowingly and willfully makes or causes to be
10 made any false statement, written or oral, of a material fact for use
11 in determining rights to such benefit or payment under this act; or
12 (3) Conceals or fails to disclose the occurrence of an event
14 (i) affects his initial or continued right to any such benefit or
15 payment, or
16 (ii) affects the initial or continued right to any such benefit or
17 payment of any provider or any person, firm, partnership,
18 corporation or other entity in whose behalf he has applied for or is
19 receiving such benefit or payment
20 with an intent to fraudulently secure benefits or payments not
21 authorized under this act or in greater amount than that which is
22 authorized under this act; or
23 (4) Knowingly and willfully converts benefits or payments or
24 any part thereof received for the use and benefit of any provider or
25 any person, firm, partnership, corporation or other entity to a use
26 other than the use and benefit of such provider or such person, firm,
27 partnership, corporation or entity; is guilty of a high misdemeanor
28 and, upon conviction thereof, shall be liable to a penalty of not
29 more than $10,000.00 for the first and each subsequent offense or to
30 imprisonment for not more than three years or both.
31 (c) Any provider, or any person, firm, partnership, corporation
32 or entity who solicits, offers, or receives any kickback, rebate or
33 bribe in connection with:
34 (1) The furnishing of items or services for which payment is or
35 may be made in whole or in part under this act; or
36 (2) The furnishing of items or services whose cost is or may be
37 reported in whole or in part in order to obtain benefits or payments
38 under this act; or
39 (3) The receipt of any benefit or payment under this act, is
40 guilty of a high misdemeanor and, upon conviction thereof, shall be
41 liable to a penalty of not more than $10,000.00 or to imprisonment
42 for not more than 3 years or both.
43 This subsection shall not apply to (A) a discount or other
44 reduction in price under this act if the reduction in price is properly
45 disclosed and appropriately reflected in the costs claimed or charges
46 made under this act; and (B) any amount paid by an employer to an
47 employee who has a bona fide employment relationship with such
employer for employment in the provision 1 of covered items or
3 (d) Whoever knowingly and willfully makes or causes to be
4 made or induces or seeks to induce the making of any false
5 statement or representation of a material fact with respect to the
6 conditions or operations of any institution or facility in order that
7 such institution or facility may qualify either upon initial
8 certification or recertification as a hospital, skilled nursing facility,
9 intermediate care facility, or health agency, thereby entitling them
10 to receive payments under this act, shall be guilty of a high
11 misdemeanor and shall be liable to a penalty of not more than
12 $3,000.00 or imprisonment for not more than 1 year or both.
13 (e) Any person, firm, corporation, partnership, or other legal
14 entity who violates the provisions of any of the foregoing
15 subsections of this section or any provisions of section 3 of P.L. ,
16 c. (C. ) (pending before the Legislature as this bill), shall, in
17 addition to any other penalties provided by law, be liable to civil
18 penalties of (1) payment of interest on the amount of the excess
19 benefits or payments at the maximum legal rate in effect on the date
20 the payment was made to said person, firm, corporation, partnership
21 or other legal entity for the period from the date upon which
22 payment was made to the date upon which repayment is made to the
23 State, (2) payment of an amount not to exceed three-fold the amount
24 of such excess benefits or payments, and (3) payment in the sum of
25 [$2,000.00] not less than and not more than the civil penalty
26 allowed under the federal False Claims Act (31 U.S.C. s.3729 et
27 seq.), as it may be adjusted for inflation pursuant to the federal
28 Civil Penalties Inflation Adjustment Act of 1990, Pub.L.101-410
29 for each excessive claim for assistance, benefits or payments.
30 (f) Any person, firm, corporation, partnership or other legal
31 entity, other than an individual recipient of medical services
32 reimbursable by the Division of Medical Assistance and Health
33 Services, who, without intent to violate this act, obtains medical
34 assistance or other benefits or payments under this act in excess of
35 the amount to which he is entitled, shall be liable to a civil penalty
36 of payment of interest on the amount of the excess benefits or
37 payments at the maximum legal rate in effect on the date the benefit
38 or payment was made to said person, firm, corporation, partnership,
39 or other legal entity for the period from September 15, 1976 or the
40 date upon which payment was made, whichever is later, to the date
41 upon which repayment is made to the State, provided, however,
42 that no such person, firm, corporation, partnership or other legal
43 entity shall be liable to such civil penalty when excess medical
44 assistance or other benefits or payments under this act are obtained
45 by such person, firm, corporation, partnership or other legal entity
46 as a result of error made by the Division of Medical Assistance and
47 Health Services, as determined by said division; provided, further,
that if preliminary notification of an 1 overpayment is not given to a
2 provider by the division within 180 days after completion of the
3 field audit as defined by regulation, no interest shall accrue during
4 the period beginning 180 days after completion of the field audit
5 and ending on the date preliminary notification is given to the
7 (g) All interest and civil penalties provided for in this act and all
8 medical assistance and other benefits to which a person, firm,
9 corporation, partnership, or other legal entity was not entitled shall
10 be recovered in an administrative procedure held pursuant to the
11 "Administrative Procedure Act," P.L.1968, c. 410 (C. 52:14B-1, et
12 seq.), except that recovery actions against minors or incompetents
13 shall be initiated in a court of competent jurisdiction.
14 (h) Upon the failure of any person, firm, corporation,
15 partnership or other legal entity to comply within 10 days after
16 service of any order of the director or his designee directing
17 payment of any amount found to be due pursuant to subsection (g)
18 of this section, or at any time prior to any final agency adjudication
19 not involving a recipient or former recipient of benefits under this
20 act, the director may issue a certificate to the clerk of the superior
21 court that such person, firm, corporation, partnership or other legal
22 entity is indebted to the State for the payment of such amount. A
23 copy of such certificate shall be served upon the person, firm,
24 corporation, partnership or other legal entity against whom the
25 order was entered. Thereupon the clerk shall immediately enter
26 upon his record of docketed judgments the name of the person,
27 firm, corporation, partnership or other legal entity so indebted, and
28 of the State, a designation of the statute under which such amount is
29 found to be due, the amount due, and the date of the certification.
30 Such entry shall have the same force and effect as the entry of a
31 docketed judgment in the Superior Court. Such entry, however,
32 shall be without prejudice to the right of appeal to the Appellate
33 Division of the Superior Court from the final order of the director or
34 his designee.
35 (i) In order to satisfy any recovery claim asserted against a
36 provider under this section, whether or not that claim has been the
37 subject of final agency adjudication, the division or its fiscal agents
38 is authorized to withhold funds otherwise payable under this act to
39 the provider.
40 (j) The Attorney General may, when requested by the
41 commissioner or his agent, apply ex parte to the Superior Court to
42 compel any party to comply forthwith with a subpena issued under
43 this act. Any party who, having been served with a subpena issued
44 pursuant to the provisions of this act, fails either to attend any
45 hearing, or to appear or be examined, to answer any question or to
46 produce any books, records, accounts, papers or documents, shall
47 be liable to a penalty of $500.00 for each such failure, to be
recovered in the name of the State i 1 n a summary civil proceeding to
2 be initiated in the Superior Court. The Attorney General shall
3 prosecute the actions for the recovery of the penalty prescribed in
4 this section when requested to do so by the commissioner or his
5 agent and when, in the judgment of the Attorney General, the facts
6 and law warrant such prosecution. Such failure on the part of the
7 party shall be punishable as contempt of court by the court in the
8 same manner as like failure is punishable in an action pending in
9 the court when the matter is brought before the court by motion
10 filed by the Attorney General and supported by affidavit stating the
12 (cf: P.L.1979, c.365, s.16)
14 17. This act shall take effect on the 60th day after enactment.
19 This bill will establish the "New Jersey False Claims Act," which
20 will authorize a person to bring a civil action in New Jersey
21 Superior Court against any other person who knowingly causes the
22 State to pay a false claim. Any person who knowingly presents a
23 false claim and deceives the State for the purposes of getting a false
24 claim paid will be subject to a civil penalty for each false claim of
25 not less than $5,500 and not more than $11,000, as is also currently
26 allowed under the federal False Claims Act (31 U.S.C. s.3729 et
27 seq.). The minimum and maximum civil penalties will be subject to
28 future adjustments that follow the inflation adjustment procedures
29 prescribed in the Federal Civil Penalties Inflation Adjustment Act
30 of 1990. Civil penalties also will include an additional amount
31 equal to three times the amount of damages which the State sustains
32 because of the act or omission.
33 Under the bill, any person may bring an action in Superior Court
34 on behalf of the State. A copy of the complaint and a written
35 disclosure of substantially all material evidence and information the
36 person possesses will be served on the Attorney General. The
37 complaint will be sealed for up to 60 days and will not be served on
38 the defendant until the court so orders.
39 Once the Attorney General receives the complaint, the Attorney
40 General has 60 days, barring any extensions, to notify the court that
41 the Attorney General either intends to proceed with the action at
42 which time the seal is lifted, or declines to take over the action, in
43 which case the seal will be lifted and the person bringing the action
44 may proceed with the action. If the Attorney General proceeds with
45 the case the Attorney General will have primary responsibility for
46 prosecuting the action but the person bringing the action will have
47 the right to continue as a party to the action. The Attorney General
48 may move to dismiss the action for good cause, provided the
person bringing the action has 1 been notified and given an
2 opportunity for a hearing.
3 If the Attorney General proceeds with the action and prevails, the
4 person bringing this action will be entitled to at least 15% but not
5 more than 25% of the proceeds recovered under the judgment,
6 depending upon the extent to which the person substantially
7 contributed to the prosecution of the action. If the Attorney General
8 does not proceed with the case, the person bringing a successful
9 action will receive an amount which the court decides is reasonable
10 for collecting the penalty and damages which will be not less than
11 25% and not more than 30% of the proceeds recovered under the
12 judgment or by way of a settlement. The State entity injured by the
13 submission of the false claim will receive an award not to exceed
14 the compensatory damages. The Attorney General will receive a
15 fixed 10% of the proceeds in any action or settlement of the claim
16 that it brings, which will only be used to support its ongoing
17 investigation and prosecution of false claims.
18 Any remaining proceeds will be deposited in the General Fund.
19 Members of the Judiciary and Legislative branches, and senior
20 executive branch officials will be exempt from the provisions of
21 this bill.
22 This bill provides that a civil action under the act may not be
23 brought more than six years after the date the violation of the act
24 was committed or more than three years after the date when facts
25 material to the right of action are known or reasonably should have
26 been known by the State official charged with responsibility to act
27 in the circumstances, but in no event more than 10 years after the
28 date on which the violation is committed, whichever occurs last. In
29 addition the bill provides that the public entity or the person
30 bringing the action will have the burden to prove all essential
31 elements of the cause of action, including damages, by a
32 preponderance of the evidence.
33 The bill also amends N.J.S.A.30:4D-17, an existing Medicaid
34 fraud statute, so that civil penalties for Medicaid fraud committed
35 under that statute are consistent with those under the False Claims
36 Act, and are supplemental to the penalties under the False Claims