Mike DeWine, the state attorney general, has argued for more than a year that an Ohio version of the federal False Claims Act would enhance the capacity of his office to crack down on fraud in government contracts, saving millions of dollars a year. Unfortunately, in the year since state Sens. Scott Oelslager and Jim Hughes introduced Senate Bill 143, Ohio is no closer to getting the “whistleblower” legislation DeWine seeks to go after fraud and ill-gotten funds.
The federal whistleblower law long has enabled individuals to file suit alleging fraud in government programs, from Medicare and Medicaid to defense contracts and child care, receiving a percentage of the settlement as a reward if the allegations are upheld. A federal provision gives states an incentive to enact similar laws, making them eligible to collect an additional 10 percent above their share of the recovered funds. More than 27 states have laws mirroring the federal legislation. Using its whistleblower law, Texas, for instance, has reported recouping about $435 million in cases involving Medicaid drug pricing alone.
Sponsors of S.B. 143 point out correctly that employees and others with access to inside information often flag fraud, say in billing practices, much sooner than audits typically can. Their initiatives expand the number of cases that can be prosecuted, not only reducing abuses and costs but generating funds from penalties and fees. By stalling, Ohio also loses an extra 10 percent it would earn on settlements with dishonest contractors.
Opponents object to a state law as an unnecessary invitation to a rash of frivolous lawsuits. They contend payments to whistleblowers likely would more than offset the federal incentive. Yet the experience of states such as Texas, Indiana and Delaware is that the laws are an effective tool that pay for themselves in checking fraud and generating funds. Ohio is overdue for whistleblower law.