Business lobbyists are working to kill legislation that would allow private citizens to bring lawsuits against those who try to falsely collect money from state and local governments.
The proposal by Rep. Daniel Patterson, D-Tucson, would most immediately entitle the state to a bigger share of any money the federal government already recoups from individuals and companies that file false Medicaid claims. That's because the federal law has a provision encouraging states to have similar laws of their own.
HB 2595, if approved also would direct the Attorney General's Office or appropriate county prosecutor to investigate claims of other types of fraud against the government.
But the most sweeping provision would allow individuals to file their own lawsuits against those they believe are defrauding the government. At that point, the government could join in or not.
And if those lawsuits are successful, with or without government help, the person who pursued the action gets a share of anything recovered for the taxpayers.
Patterson, a first-term lawmaker, managed to get the proposal through the House Commerce Committee last week.
But House Speaker Kirk Adams, R-Mesa, also assigned the bill to the House Judiciary Committee. And that panel is not scheduled to hear any more House bills this session.
House Minority Leader David Lujan, D-Phoenix, said he is trying to get Adams to let the bill go directly to the House floor. Adams, however, said Monday he knows of no such request.
The legislation has picked up a wall of opposition from business interests, some of whom could end up as defendants in these kinds of cases. Foes include Takeda Pharmaceuticals, the last of which had to pay $2 million last year to the state of Alabama after settling claims that it inflated prices for prescription drugs, causing that state's Medicaid program and doctors there to pay too much.
Matt Johnson, Takeda's Arizona lobbyist who logged in against the bill last week did not return calls Monday seeking for comment.
But Allison Bell, lobbyist for the Arizona Chamber of Commerce and Industry, said a state law is not necessary.
"We have the federal False Claims Act which already rewards 'whistleblowers' for helping Arizona recover Medicaid money lost to false or fraudulent claims,'' she said.
And she said companies already are subject to triple damages under the federal law.
"We haven't seen evidence as to why Arizona needs a copycat law,'' Bell said.
Patterson, however, said the experience of Texas proves otherwise, providing a statement from Susan Miller who heads that state's civil Medicaid fraud division.
She said Texas amended its law in 1997 to allow individuals to file these kind of complaints, with the state intervening in its first one three years later. The result to date, Miller said, is her agency has recovered more than $360 million.
Bell said her organization is not persuaded by the Texas experience, saying the federal law is sufficient.
Patterson, however, said having a state law would allow state or local prosecutors to pursue cases rather than having to wait for what could be a lengthy review by the U.S. Department of Justice.
The legislation is not limited to Medicaid but allow claims against any kind of fraud in government. It also contains provisions designed to protect workers who pursue claims under the law and bars companies from adopting any rules designed to keep workers from reporting fraud to the government.