Colorado

Colorado Medicaid False Claims Act

Whistleblowers with knowledge of fraud on Colorado medical assistance funds may bring suit on the state’s behalf and share in the recovery, under the Colorado Medicaid False Claims Act which was first enacted in 2006.  Under C.R.S. § 25.4-4-305 of the Act, an individual may face civil liability for knowingly presenting or causing to be presented a false or fraudulent claim, conspiring to do so, or engaging in other fraudulent activity specified by law.

The Colorado Medicaid False Claims Act is modeled on the federal False Claims Act, and cases brought under one statute are often brought in conjunction with claims under the other.  However, unlike the federal law which applies to all false claims made to the federal government, the state law only applies to false claims relating to the state’s medical assistance programs.  Violation of the Colorado Medicaid False Claims Act exposes an individual for civil penalties up to three times the total damages to the state.  Further, the Act imposes civil penalties ranging between $5,000 – $10,000 for each individual false claim in violation of the Act.

A private individual with direct knowledge of a Colorado Medicaid False Claims Act violation is authorized to file a suit under the Act’s qui tam provisions.  The qui tam relator, often referred to as a “whistleblower,” may proceed with the action regardless of whether the government chooses to intervene.

Whistleblowers involved in successful judgments or settlements may receive up to 25 percent of the civil penalties recovered by the state government.  If the state government has chosen not to intervene, the whistleblower may receive up to 30 percent of the available recovery. Further, the Act provides the whistleblower with protection against employer retaliation, offering reinstatement, double back pay with interest, and compensation for any special damages including attorneys’ fees if the employee lawfully acted in furtherance of an action under the Colorado Medicaid False Claims Act.

Persons with information about fraud on the state of Colorado are urged to preserve their rights by consulting an attorney and filing a case as soon as possible.  A disclosure to the Colorado state government pursuant to C.R.S. § 25.4-4-306(5)(c) may preserve a person’s rights as an original source of the information about fraud.

As of July 2013, the text of the state FCA statute below is believed to be a complete, current version of the statute currently in force. Nonetheless, attorneys and qui tam relators should rely on the most up to date version of the state’s laws.

Colorado Medicaid False Claims Act
C.R.S. 25.5-4-303.5 – 25.5-4-310

25.5-4-304. Definitions.

As used in sections 25.5-4-303.5 to 25.5-4-309, unless the context otherwise requires:

(1) (a) “Claim” means a request or demand for money or property, whether under a contract or otherwise, and regardless of whether the state has title to the money or property, under the “Colorado Medical Assistance Act” that is:

(I) Presented to an officer, employee, or agent of the state; or

(II) Made to a contractor, grantee, or other recipient if the money or property is to be spent or used on the state’s behalf or to advance a program or interest of the state and if the state:

(A) Provides or has provided any portion of the money or property requested or demanded; or

(B) Will reimburse the contractor, grantee, or other recipient for any portion of the money or property that is requested or demanded.

(b) “Claim” does not include a request or demand for money or property that the state has paid to an individual as compensation for employment by the state or as an income subsidy with no restriction on that individual’s use of the money or property.

(2) “Colorado Medical Assistance Act” means this article and articles 5 and 6 of this title.

(3) (a) “Knowing” or “knowingly” means that a person, with respect to information:

(I) Has actual knowledge of the information;

(II) Acts in deliberate ignorance of the truth or falsity of the information; or

(III) Acts in reckless disregard of the truth or falsity of the information.

(b) “Knowing” or “knowingly” does not require proof of specific intent to defraud.

(4) “Material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.

(5) “Obligation” means a fixed or contingent duty arising from an express or implied contractual, quasi-contractual, grantor-grantee, licensor-licensee, statutory, fee-based, or similar relationship, and the retention of overpayment.

25.5-4-305. False medicaid claims – liability for certain acts.

(1) Except as otherwise provided in subsection (2) of this section, a person is liable to the state for a civil penalty of not less than five thousand dollars and not more than ten thousand dollars, plus three times the amount of damages that the state sustains because of the act of that person, if the person:

(a) Knowingly presents, or causes to be presented, to an officer or employee of the state a false or fraudulent claim for payment or approval;

(b) Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim;

(c) Has possession, custody, or control of property or money used, or to be used, by the state in connection with the “Colorado Medical Assistance Act”and knowingly delivers, or causes to be delivered, less than all of the money or property;

(d) Authorizes the making or delivery of a document certifying receipt of property used, or to be used, by the state in connection with the “Colorado Medical Assistance Act” and, intending to defraud the state, makes or delivers the receipt without completely knowing that the information on the receipt is true;

(e) Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the state in connection with the “Colorado Medical Assistance Act” who lawfully may not sell or pledge the property;

(f) 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 state in connection with the “Colorado Medical Assistance Act”, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state in connection with the “Colorado Medical Assistance Act”;

(g) Conspires to commit a violation of paragraphs (a) to (f) of this subsection (1).

(2) Notwithstanding the amount of damages authorized in subsection (1) of this section, for a person who violates subsection (1) of this section, the court may assess not less than twice the amount of damages that the state sustains because of the act of the person if the court finds that:

(a) The person who committed the violation of subsection (1) of this section furnished to the officials of the state responsible for investigating false claims violations all information about the violation known to the person and furnished said information within thirty days after the date on which the person first obtained the information;

(b) At the time the person furnished the information about the violation to the state, a criminal prosecution, civil action, or administrative action had not commenced with respect to the violation and the person did not have actual knowledge of the existence of an investigation into the violation; and

(c) The person fully cooperated with any investigation of the violation by the state.

(3) A person violating this section shall also be liable to the state for the costs of a civil action brought to recover any penalty or damages.

(4) Any information furnished pursuant to subsection (2) of this section shall be exempt from disclosure under part 2 of article 72 of this title.

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