Bill would reward whistleblowers who root out fraud

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — A bill that would encourage whistleblowers to help the state potentially recover millions of dollars in fraudulent claims was filed on Tuesday.

House Bill 401 would encourage people to root out fraud in all government contracts, including the more than $6 billion Medicaid program. The measure would allow people to turn over evidence to prosecutors and receive a portion of the money recovered. It would also allow the state to recover triple damages from a company that defrauds the state.

The federal False Claims Act allows the federal government to go after businesses that knowingly defraud the federal government. Nearly two dozen states also have state false claims acts, but not Kentucky.

House Speaker Greg Stumbo, D-Prestonsburg, is the main sponsor of the bill and a former attorney general. Stumbo sponsored similar legislation last year that passed the House but died in the Senate. The Senate approved a separate false claims act bill that applied only to Medicaid providers.

Under Stumbo’s proposal, whistleblowers could get between 15 and 30 percent of the total amount collected.

“There is only so much our law enforcement and auditing officials can do and a limit to how far they can reach; this will put every citizen on the look-out for fraud,” Stumbo said.

The bill will be referred to a committee and is expected to pass the House again.

Filed Under: Greg Stumbo • KY General Assembly • State Government