While a bill giving Maryland officials greater power to pursue Medicaid fraud died during this session of the General Assembly, the state’s insurance commissioner expects it to be revisited again in Annapolis.

Ralph S. Tyler

Maryland Insurance Commissioner Ralph S. Tyler said he was “disappointed” that the Maryland False Health Claims Act of 2009 (SB 272/HB 304) was defeated by one vote in the state Senate, but expects its return next session.

The bill was proposed by Gov. Martin O’Malley.

“It is unfortunate the bill did not pass,” Tyler told IFAwebnews.com. “I’m disappointed in the opposition to the bill. The federal law has existed for over 20 years and 22 states have adopted a state false claims act.”

The bill, modeled after similar state-based legislation, would have enabled state officials to pursue smaller cases of fraud, including the ability to collect civil penalties of up to $10,000 and triple damages, while also allowing whistle-blowers to file suit on behalf of the state. State law currently allows penalties only for the amount of the fraud.

Tyler said he testified before both the House and the Senate in “strong support” of the measure.

“The idea that they would deny a state a remedy to combat fraud, I think, is highly unfortunate,” he said.

The Maryland Hospital Association was one of several groups from the medical community, urging opposition of the bill. The group claimed the existing federal False Claims Act was sufficient and under a state bill, “hospitals and physicians will incur higher defense costs, face multiple lawsuits, and be subject to duplicative penalties for the same allegedly wrongful act,” according to a statement.

This story originally appeared in the May 2009 print edition of Insurance & Financial Advisor.