Virginia Fraud Against Taxpayers Act Amendments for 2018
I am pleased to announce that important changes to the Virginia Fraud Against Taxpayers Act were made in the 2018 legislative session. The legislation — SB487 — was sponsored by state Sen. John Edwards (D-Roanoke) and passed both houses of the General Assembly unanimously and was signed into law by the Governor. These updates were necessary and important because, as reported previously, penalties under the federal False Claims Act increased back in 2016, but there had been no corresponding increase to statutory penalties under the VFATA. (As regular readers know, the federal False Claims Act and the VFATA both have treble damage provisions in addition to civil penalties in set amounts).
In order for the Commonwealth to qualify for an enhanced share of its Medicaid recoveries our VFATA must match the federal FCA in certain ways; while a discussion of the specifics is beyond the scope of this blog post, regular readers are familiar with the criteria. In a nutshell, the VFATA must be at least as powerful as the federal FCA, which would include the amount of the civil penalties.
Now you might think amending the VFATA to match the federal FCA would be a no-brainer — the rewards of having a state statute that matches the FCA amount to tens of millions of dollars in an average year in Virginia and it is as close as a state ever gets to free money. Moreover, Virginia has a long and proud tradition of vigorous law enforcement, which includes a General Assembly that regularly gives the men and women of law enforcement the tools they need to do their jobs.
That being said, Virginia also boasts a very pro-business environment; I therefore did not consider legislation raising the penalty range to be a sure thing. At first blush, the optics are kind of harsh. For a number of years now the penalty range has been a minimum of $5,500 and a maximum of $11,000; the General Assembly appeared happy — and comfortable — with that. SB487, however, raises the range to a minimum of $10,957 and a maximum of $21,916; I imagined a great weeping and wailing from the Chamber of Commerce at the mere suggestion of such an increase.
And of course the legislative process at any level is at best an unsure thing. Once legislators start tinkering with something, you never know where you will end up. Amendments can be made by any one of the 140 legislators; and those amendments can range from very unhelpful to disastrous. Hopefully, this year’s smooth sailing means our Virginia Fraud Against Taxpayers Act has found secure footing in the halls of the General Assembly, but it is certainly best to remain vigilant.