State Private Insurance False Claims Act Cases

Two states, California and Illinois, have provisions for interested persons, such as qui tam relators, to bring an action in the name of the State. In Illinois, the governing statute is known as the Illinois Insurance Claims Fraud Prevention Act (ICFPA), which prohibits the payment or offering of remuneration of any kind, directly or indirectly, to procure patients or benefits that would be the basis of a claim under insurance policies. The ICFPA also incorporates a provision of the Illinois Criminal Code, which more generally prohibits any person from making or causing to be made a false claim under an insurance policy.

“False claim” is defined broadly as any statement made to any insurer as part of, or in support of, a claim for payment under an insurance policy when the statement contains any false, incomplete, or misleading information concerning any fact material to the claim, or conceals the occurrence of an event that is material to any person’s initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled. Any person who violates the ICFPA or the incorporated Criminal Code provision may be subject to a civil penalty of between $5,000 and $10,000, plus an assessment of up to three times the amount, for each claim for compensation under an insurance contract.

The cases brought under these provisions have been few, though we expect to see more in the future.