The California Insurance Frauds Prevention Act (IFPA) permits individuals to file a qui tam lawsuit under seal to recover damages for fraudulent claims submitted to private insurance companies. Unlike the False Claims Act (FCA), the IFPA only applies to claims submitted to non-governmental entities. The California Department of Insurance (CDI) investigates the allegations while the case is under seal, and at the agency’s election, may intervene and proceed with litigation against the defendants. In the event that CDI declines to intervene, the relator may continue the litigation on behalf of the California government.
The IFPA was designed to mirror much of the FCA’s procedures and enforcement mechanisms. The process involves filing a lawsuit under seal, submitting evidence to CDI, and cooperating with the resulting investigation.
Relators can receive an award between 30–40% of the recovery in cases where the government intervened, or between 40–50% in cases where the government does not intervene.
Can I bring both an FCA case and an IFPA case?
Yes. Many fraud schemes involve submitting false claims to both governmental and non-governmental entities.
An IFPA action does not need to be filed separately from an FCA action. In many instances, it can be beneficial to file a single lawsuit combining claims under the FCA, state FCAs, and the IFPA. The strategic considerations vary from case to case.
Do other states have a similar law?
The Illinois Insurance Fraud Claims Prevention Act works in substantially the same manner as the California IFPA. Other states may soon implement similar laws to combat fraud.
Each state limits their investigations to the claims submitted to non-governmental entities within their own territories. As with FCA claims, there are strategic considerations that would affect whether you would benefit from filing multiple lawsuits or combining all claims into a single case.
Retaliation Protections
The California IFPA includes protections for whistleblowers against retaliation by their employers. Generally, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of filing a qui tam complaint, or assisting in another’s qui tam case, is entitled to all relief necessary to make the employee whole, including:
- reinstatement to the same seniority;
- 2 times any back pay lost;
- interest on the back pay;
- compensation for damages sustained; and
- litigation costs and attorney fees.
If you believe your employer has retaliated against you for reporting or opposing fraud on insurance providers, contact our firm to discuss your options.
How do I know if I have a case?
Contact our firm for a free, confidential consultation to evaluate your case. To make the most of your call, have the following information ready, if known:
- Falsity: What misinformation was provided to insurance providers?
- Scienter: What evidence is there to show that decision-makers knew that misinformation would be relied upon for insurance claims?
- Materiality: How do you know that the insurance provider would not have paid the claims if that misinformation had been revealed?
- Damages: Was an insurance policy paid out, and how much?
