HB 347-RECOVERY OF FALSE CLAIMS FOR STATE FUNDS  1:34:29 PM CHAIR LEDOUX announced that the first order of business would be HOUSE BILL NO. 347, "An Act relating to the limitation period to commence a false claims action; relating to recovery for false claims for state or municipal funds; and amending Rules 4, 24, and 46, Alaska Rules of Civil Procedure." 1:35:03 PM REPRESENTATIVE KREISS-TOMKINS explained that the qui tam bill or the Alaska False Claims Act is an anti-waste, fraud, and abuse piece of legislation that has been adopted on the federal level by approximately 29 states around the nation. He advised that it is fairly well vetted and modeled after other states, specifically the State of New York, and is substantially similar to language in the Medicaid Reform bill, currently in the other body. While there are a few cosmetic differentiations, he offered, it is effectively the same idea except this is inclusive to all subject matter, whereas the Medicaid Reform bill is specific to only Medicaid. He deferred to his staff for a greater analysis. 1:36:27 PM REID MAGDANZ, Staff, Representative Jonathan Kreiss-Tomkins, Alaska State Legislature, reiterated that the False Claims Act is based off of false claims acts enforced at the federal level and approximately 29 other states in the union. The central components include: defining false claims (Sec. 2 of HB 347); the attorney general is charged with investigating false claims cases; and the portion of the bill that is perhaps most noteworthy relates to the ability of a private plaintiff, the qui tam plaintiff, to bring a case alleging false claims in situations where the attorney general does not bring a case due to limited resources or because the attorney general is unaware. House Bill 347 spells out the process for the private plaintiff to bring a case, wherein they would file a [complaint] with the court under seal and at the same time serve the attorney general, whereby the attorney general has 60-days to review that case and investigate the claims made. At the end of the 60-day period or an extension, the attorney general can either pursue the case or allow a municipality to pursue the case if the claim is against a municipality. Although, he explained, if the attorney general declines to pursue the case, the private party who originally identified the fraud can pursue the action to conclusion. He offered that no matter which course is chosen, the private plaintiff is entitled to receive a portion of the money recovered if the case is won, and the exact percentage varies based upon how much information and how large of a role the private plaintiff played. The federal law has resulted in over $30 billion worth of recovery to the federal government in cases originally brought by a private plaintiff. He noted that this [bill] provides a powerful tool against fraud by allowing individual people the ability to bring cases when they identify fraud, and it provides a financial incentive to do so. 1:40:01 PM CHAIR LEDOUX opined there is a federal qui tam statute but that statute specifically excludes tax matters. She asked whether this bill includes tax division issues, and further asked him to explain what this bill does where the federal statute decided not to, and whether the qui tam statutes in other states include taxes. MR. MAGDANZ referred to Sec. 2(b) [page 2, line 25], which read: (b) This section applies to claims, records, or statements made under AS 43 if MR. MAGDANZ advised that HB 347 does apply to tax cases, and it only applies to claims, records, or statements made under AS 43, Alaska's tax title, if the net income or sales of the person against whom the action is brought is equal to or exceeds $1 million or the damages sought exceed $350,000. He continued that the bill includes tax matters because the state law the sponsor modeled it after also includes tax matter. 1:41:27 PM CHAIR LEDOUX questioned whether Mr. Magdanz said that there must be a claim in excess of $1 million. MR. MAGDANZ opined that it is not a claim in excess of $1 million, the net income or sales of the person against whom the false claims action is being brought must exceed $1 million a year. Therefore, it cannot be used to bring a claim against small businesses or individuals with small tax burdens. 1:42:05 PM REPRESENTATIVE CLAMAN asked, in addition to the tax question, whether there are other ways wherein the Alaska False Claims Act would differ from the federal False Claims Act in terms of the kinds of claims that can be brought. MR. MAGDANZ offered that he has not performed an exhaustive side-by-side analysis of the two acts, but their definitions of false claims are relatively similar and he would provide the information. 1:43:07 PM STACIE KRALY, Chief Assistant Attorney General, Human Services Section Statewide Supervisor, Department of Law, available to answer questions. MS. KRALY, in response to Chair LeDoux, responded that she does not do any work with respect to taxes. CHAIR LEDOUX asked in what situations there might be a valid case for tax fraud that the attorney general's office would decide not to pursue a case. MS. KRALY requested clarification and asked whether the question was that Chair LeDoux would like to understand under what circumstances the attorney general may decline to pursue an action where the monetary thresholds had been met. CHAIR LEDOUX agreed, and she clarified where the monetary circumstances have been met and under what circumstances the attorney general would decline to pursue a case. MS. KRALY responded that she can answer that question generally, and will return with more specifics. She explained that the way false claims acts are designed is that the attorney general will be served with a copy of the complaint that has been filed in court under seal, and would have 60-days to evaluate the merits of the allegations within that complaint. At which time the attorney general has to make a decision either to: proceed with the case on their own accord; defer to the qui tam plaintiff, in this instance; or move the court to dismiss the claim because even though the monetary thresholds had been met there would be circumstances as set forth in the statutes. She remarked that she is not as familiar with this statute as with the statute for Medicaid fraud cases. There are specific limitations as to certain claims not considered to be a false claim even if it may arise to be a false claim in general or it may appear to be a false claim, such as information that is within the public's sphere. For example, she said, an investigative news story advises that "Organization X has been doing these bad acts" and then someone files a case and states that "This is a false claim." That scenario would not be considered a false claim under the statute, so that claim could not be pursued even though the monetary thresholds had been met. In the event an ongoing investigation had taken place for some other civil or criminal action related to that allegation, the Department of Law would be limited from pursuing those. She related that there are specific provisions within HB 347, and within false claims acts in general that limit and preclude the prosecution of a false claim under very certain circumstances in statute. She offered a scenario where the Department of Law determined there wasn't sufficient evidence to support the claim and meet the burden of taking it to trial, the Department of Law could then move to settle or dismiss the case. 1:46:39 PM CHAIR LEDOUX surmised that in the event the Department of Law (DOL) decides not to pursue the case they could determine whether it is a frivolous case or not and dismiss it themselves. MS. KRALY responded generally yes, and advised that she has reviewed several versions of the general false claim act and all have the provision where the Department of Law (DOL) or in this case because municipalities were involved, the governmental agency would be able to evaluate that claim and determine whether or not to move to dismiss the court. She opined that it is not an automatic dismissal because they would have to petition the court to dismiss the claim. In those circumstances, she advised, the qui tam plaintiff would be able to be present in the court and make an argument or evidentiary offer to the court to say, "No, this claim should not be dismissed and I should be allowed to go forward." It is not an automatic dismissal, she reiterated, it is a process of requesting the court to consider dismissal with the plaintiff being able to argue otherwise. 1:48:01 PM CHAIR LEDOUX pointed out that she wants to be certain the committee does not pass something that allows qui tam plaintiffs to, perhaps, unjustly harass. MS. KRALY responded that that is a very good point and it has been raised in both bodies in dealing with the Medicaid reform bill. Due to the 60-day investigation by the attorney general's office and the ability of the attorney general to move for dismissal and/or to settle a case, those protections are such that they will limit what has been characterized as frivolous or harassing litigation by individuals. There are built-in protections under these statutes for the Department of Law to come in and perform a robust evaluation of the allegations and the evidence that supports those allegations, she remarked. Within that 60-day period of investigation the Department of Law has the ability to subpoena for records and conduct discovery. There is a provision in the statute that allows the Department of Law a continuation of 30-days to be certain of a complete investigation to assure that the claim does have merit, or that it should be dismissed, or settled. 1:49:32 PM CHAIR LEDOUX asked whether the Department of Law is supportive of this bill. MS. KRALY responded that the Department of Law has no position on this bill. 1:49:42 PM REPRESENTATIVE CLAMAN referred to the attorney general's notice of the [complaint], and offered a circumstance where the attorney general knows little or nothing about the claim and decides it is a good claim. The attorney general then takes over the claim and the qui tam plaintiff is out of the picture as it is the state's lawsuit. He asked whether that is what happens when the state decides to accept the claim. MS. KRALY said in a sense yes, but the qui tam plaintiff is still able to participate, possibly not given party status but they are involved and if there is a settlement they have the ability to participate and object to a settlement. She pointed out that she has not studied this bill in detail, but the other false claims acts read as such and they participate but the litigation would be directed by the Department of Law. 1:50:57 PM REPRESENTATIVE CLAMAN offered a second scenario in that after being notified of the claim, the state moves to dismiss it. He asked whether the determination is based on the merits based on the facts, or a legal determination assuming the facts are as the qui tam plaintiff says they are, it is still not a recognizable claim under the False Claims Act so it should get dismissed. MS. KRALY opined that it could be done either way, and further opined that there is kind of a merits based analysis but there is also a substantive review that is required by the Department of Law (DOL) that would then determine whether or not there was sufficient evidence. For example, she offered, the complaint comes in and alleges a situation within the public sphere and as a matter of law, it is not a false claim and DOL would move to dismiss, which is easy to decide. In the event there is not an easy answer, which would go through the four or five provisions in this bill and other bills like it, which reads these do not constitute false claims; therefore, they can't proceed. At that point, a more substantive review of the allegation would be required through discovery and an investigation to determine the merits of the allegations, she explained. 1:52:30 PM REPRESENTATIVE CLAMAN asked how this bill gives the state or a potential false claims plaintiff something they don't already have by using the federal act. MS. KRALY pointed out that the quick answer is that it allows a false claims for state administered programs and, she opined that the federal act would not allow pursuing a false claim for a state funded program. She offered the example of Medicaid programs and said there are a number of federal false claims dealing with pharmaceuticals that the state participates in, but those are a broader based issue and also have a federal component to it. She opined that this would give the qui tam plaintiff the ability to identify and pursue a false claim based upon state funded activities under state statutes and regulations. 1:53:50 PM REPRESENTATIVE CLAMAN referred to the state's current budget situation and asked the department's capacity to get involved in the false claims actions on a state level. MS. KRALY referred to the fiscal note attached to the Medicaid reform bill (SB 74), and noted that the department asked for some resources to pursue that. She said it is a matter of how it would be calculated out and that it may require additional resources by the Department of Law, but she is not familiar with how the department will calculate those out. 1:54:47 PM CHAIR LEDOUX asked who the Alaska False Claims Act might be used against and noted that Medicaid has a federal component; therefore, couldn't an action be brought under the federal law. She asked for an example. MS. KRALY deferred to the sponsor or his staff. REPRESENTATIVE KREISS-TOMKINS deferred to his staff. 1:55:45 PM MR. MAGDANZ said the definition of false claims in Sec. 2 of the act applies to basically anyone asking the state for money or resources or receiving money or resources from the state. He offered that he has not performed a precise legal analysis to know exactly which cases might fall under it or might not. Basically, he noted, anyone who had a contract with the state could be subject to a false claims action if they were defrauding the state. For example, he said, IT procurement cases. 1:56:42 PM REPRESENTATIVE KREISS-TOMKINS asked whether Mr. Magdanz was familiar with false claims brought in other states and jurisdictions that settled, and the subject matter. 1:56:55 PM MR. MAGDANZ answered that he copied a short list from the "Taxpayers Against Fraud" website and many of the cases have to do with medical claims or pharmaceuticals. He then offered examples of different cases, such as, oil on public lands, the United States Department of Housing and Urban Development (HUD) ... 1:57:34 PM CHAIR LEDOUX questioned why that would have been brought under a state statute. MR. MAGDANZ responded that these are examples of claims brought under federal statute. 1:57:48 PM REPRESENTATIVE KELLER referred to [Sec. 37.10.110], beginning page 1, line 11 through to page 2, line 24, and said he found the language confusing and was advised that this language came from the federal act. He pointed to [Sec. 37.10.110(a)(4)] on page 2, lines 9-11, which read: (4) possess or control public property or money used or to be used by the state or a municipality and knowingly deliver or cause to be delivered less property than the amount for which the person receives a certificate or receipt; REPRESENTATIVE KELLER opined that Alaska is the only state where all of the natural resources of the state are public property. He pointed this out, not because he sees it as a large problem, but rather because it is simply importing language without a careful analysis of all of the language in every single subsection. Representative Keller referred to [Sec. 37.10.110(a)(6)] on page 2, lines 15-16, which read: (6) knowingly buy or receive as a pledge of an obligation or debt public property from a person who may not lawfully sell or pledge the property. REPRESENTATIVE KELLER referred to [Sec. 37.10.110(a)(8)] on page 2, lines 15-16, which read: (8) fail to disclose a false claim to the state or a municipality within a reasonable time after discovery of the false claim if the person is a beneficiary of an inadvertant submission of a false claim to an employee, officer, or agent of the state or a municipality or to a contractor, grantee, or other recipient of state or municipal funds. REPRESENTATIVE KELLER described subsections (4), (6), and (8) as confusing because it is difficult to imagine a case where this might be applied. He asked whether this language had been carefully considered, whether this language is common to Alaska's laws, and whether the committee is doing things it may regret. 2:00:01 PM MR. MAGDANZ acknowledged that this language was largely drawn from other examples in templet legislation, and that Representative Keller made good points. CHAIR LEDOUX said she is not moving HB 347 today and opened public testimony. 2:01:04 PM DAVID BOYLE said he is testifying on his own behalf and that he is a member of the Alaska Policy Forum. He explained that the Alaska False Claims Act has a deterring effect on preventing fraud, such as Medicaid fraud. More importantly, he noted, it rewards public employees and protects them from reprisal actions, it rewards everyday Alaskans to be active in daily governmental functions, and there are 29 states including Washington D.C., with false claims acts. He then listed various cases within the federal program, which included: the McKesson Corporation (Pharmacy) was found guilty of $151 million for sales in Medicaid fraud; the Walter Investment Management Corporation submitted $30 million in false claims to the United States Department of Housing and Urban Development (HUD) and they later received $5.5 million in reward incentives; and recently 12 Detroit public school principals, an assistant superintendent, and the vendor were charged by the FBI in an illegal bribery and kick-back scheme - fraudulent invoices for supplies totaling over $900 thousand. In 2009, the Alaska Policy Forum recommended to the Anchorage School District that they "Formulate, invest, and implement a fraud waste and abuse policy to ensure most efficient operations. The focus on fraud and abuse should be: 1. procurement and contracting and the potential theft of district property. This requires that stringent equipment control policies be established and followed. The comprehensive fraud and abuse policy should also include full whistleblower protection and incentives for the identification of fraud waste -and abuse." Unfortunately, he said, the Anchorage School District did not agree because it would be too difficult to implement and the incentivization of the program would not be fair. He asked that the committee pass HB 347 out of committee because "we need to squeeze every penny out of the Alaska budget due to our fiscal crisis." 2:03:51 PM STEVEN MERRILL said he is testifying on behalf of the Alaska Policy Forum, is an Anchorage attorney, "and a long-time freedom fighter." Mr. Merrill offered testimony as follows: My statement here for you today is entitled, Gangsters Beware, and I want to start with an old Scottish proverb: 'Thieves operate in the dark, yet are visible in many ways people can see.' Every year paperwork con artists, from mega billion dollar corporations to family run fraud shacks rip off American government to the tune of untold billions of dollars. Few perpetrators are ever caught. The ones that are caught typically are discovered and exposed by those working in some way with the fraudster. Maybe someone who becomes outraged at the crime being committed. But that kind of event might usually be the end for justice, just silent, disgusted what was happening. That is unless the potential whistleblower manages to use the only effective means that has ever been in the United States for exposing fraud against the public treasury. That is called the False Claims Act. It's time Alaska joined 29 other states in trying to do something about the tens of millions of dollars in state government, right here in our state, is conned into giving to flim-flam men every year. Alaska needs its own false claims act, as proposed here by Representative Kreiss-Tomkins, it also needs a whistleblower protection act, and an Alaska fraud hot- line so people can be aware of these laws, both government contractors, government employees, and management of government contractors, so everyone knows what the law is and how they can contact a confidential source. The fraud hot-line could offer confidentiality that is kept outside the direct state record keeping, which is quite often very important to a whistleblower. I helped the Alaska Policy Forum this year draft a false claims act for Alaska that is drawn from a number of state laws across the county. So -- that is the case also with this bill proposed by Representative Kreiss-Tomkins, primarily drawn, I'm told, from the New York statute. The major difference between the two is that the New York law caps whistleblower compensation at a 25 percent share of the total recovery. And it also, more importantly and to me oddly, sets a minimum amount in controversy that is quite high, $350 thousand dollar limit. 2:06:54 PM Now most states, and most -- and the federal government have a higher cap and no floor. Typically the cap is 30-35 percent. The difference between these approaches can be critical to whether a case is going to be accepted or not. One that may not have an exceptionally large recovery to be had. A false claim could be for vast millions of dollars or for rip offs that do not even reach $100 thousand dollars. Why should lesser fees face no consequences -- no possible consequences? The solution we propose is to delete the cap in this bill and to use brackets like tax brackets for determining the (indisc.) share of the recovery. A higher proportion of the first dollar recovered and a lesser proportion as the size of the recovery rises. Ladies and gentlemen, this proposed new law, before the committee, would finally greatly endanger the hosts of parasites who are routinely stealing the public funds of Alaska. This year let's make the first serious effort ever in Alaska to combat fraud, waste and abuse of public funds. Thank you. 2:08:14 PM MR. MERRILL, in response to Chair LeDoux, agreed to forward a copy of the qui tam bill formulated by the Alaska Policy Forum. CHAIR LEDOUX said the committee would like to compare their bill with the current HB 347 to determine how to make it into a better bill. MR. MERRILL advised that the Alaska Public Forum bill recommends a hot-line law and a whistleblower protection act which, he opined, are necessary components of this. 2:09:22 PM RAY KREIG, Alaska Policy Forum, said he is probably testifying both on behalf of the Alaska Policy Forum and himself. He offered testimony as follows: And I just wanted to say, in listening to the earlier questions, including Madam Chair your own questions of 'Why do we need this if there is a federal statute?' Just to give you a little bit of history, the Policy Forum was looking into the excesses of the new crime lab on Tudor Road while it was being proposed. And I got involved with that investigation and our first attention at the Policy Forum to the problem with Alaska not having fraud, waste, and abuse statutes came from our interviewing a former crime lab director, Chris Beheim. He strongly felt that our state procedures and statutes were lacking in this area. And the ongoing outcome of the investigations surrounding the crime lab was this whitepaper that Mr. Beheim was a co-author of, that came out and was distributed to the legislature several months ago. We didn't know about this hearing today, we had no idea it was coming up. Mr. Beheim undoubtedly would have testified, but he's just unavailable right now as this is going on. So, I am not nearly the expert on the statute, obviously, as Mr. Merrill but I thought the committee should know that the retired crime lab director Beheim was the original origin of this and strongly is in favor of passing this legislation and the other accompanying whistleblower legislation that's in the Policy Forum whitepaper. Thank you very much. CHAIR LEDOUX held public testimony open. 2:12:31 PM MS. KRALY clarified for the record the issue of the federal False Claims Act in Medicaid and explained there is a reason to have a state false claims act even when Medicaid is involved. She further explained that if the state had an approved and federally certified Alaska False Claims Act, the State of Alaska would receive a ten percentage point swing for Alaska from the federal government for monies recovered under its state false claims act, a 55/45 percent axle. She expressed that the record should be clear that the fact that the federal act would allow the state to pursue Medicaid claims under that federal act, the state act has a direct benefit to the State of Alaska. 2:13:31 PM REPRESENTATIVE KELLER noted that there are fraud occasions now and asked whether any federal monies are currently available for that which the state has pursued. MS. KRALY responded that the state has participated in multiple class actions related to Medicaid and Medicaid fraud through the Consumer Protection Section, Medicaid Fraud Control Unit of the Department of Law (DOL). REPRESENTATIVE KELLER asked whether there is federal money that helps the state in those fraud investigations now. MS. KRALY answered that if the action is prosecuted or dealt with through the Medicaid Fraud Control Unit there is federal funding that pays for the attorneys and investigators that work on those cases and they provide an "administrative match" and they are funded at 75 percent federal dollars to 25 percent state dollars. 2:15:00 PM NANCY MEADE, General Counsel, Administrative Staff, Office of the Administrative Director, Alaska Court System (ACS), said the record should be clear that the Alaska Court System is still looking at the impact HB 347 may have on the court system. She noted that the Department of Law (DOL) provided an indeterminate fiscal note on the grounds that they are unclear as to how many cases this might generate. There is some expectation that the cases it does generate will be mostly by self-represented parties. She offered that this is a policy call and should the legislature pass the bill, the court system will be able to implement it. She advised that she spoke to the staff of the sponsor regarding the unusual procedures in the bill, and that perhaps it isn't quite as stylized to what is typically done in Alaska as it could be. It is unclear how a complaint will be filed with the court in-camera and then remain under seal for 60-days because currently there are no procedures set up, although, she noted, the court system could develop a procedure if it becomes law. She suggested that it could be more efficient and effective that the complaints are delivered directly to the attorney general's office without having the court more or less be the babysitter for those complaints for 60-days until the attorney general decides what to do. She noted it is something her office will work out and she looks forward to continuing to work with the sponsor's office. 2:16:40 PM CHAIR LEDOUX asked why Ms. Meade thought that most of the complaints will be brought by pro per plaintiffs. MS. MEADE opined that if the complaints or claims have merit, the attorney general's office would be inclined to take the case and pursue the case. With regard to oil companies, she opined, the Department of Revenue routinely audits and the attorney general's office pursues the audit on every single tax return the oil companies file. She referred to Medicaid and said it appears that if the attorney general was told there was a problem with a doctor falsely making Medicaid claims against the state, the attorney general would pursue it. It is true that this is for those cases that the attorney general opts not to pursue either because it doesn't think there is enough evidence to win, or alternatively, it doesn't have the resources to pursue every single case. She offered that some of these will be brought by self-represented people whether there is a lot of basis for them, or maybe not. 2:18:08 PM CHAIR LEDOUX referred to the incentive piece and asked whether Ms. Meade believes this would bring out employees of companies who see something legitimately wrong in their companies. Yet, without the bill the employees might ask themselves whether they really want to step forward. Although, if they see there is a monetary reward to it they might take that chance, and if it's legitimate they will find an attorney. MS. MEADE agreed, and said that the intent of the bill is to help people who witness legitimate fraud recover the funds for the state and receive a reward. She related that, particularly in this state, there are a high number of self-represented litigants and under this bill self-represented people could pursue claims that the attorney general's office determines are not pursuable. Again, she said, this is the committee's policy call and those are some of the questions she has as she determines how this bill will affect the court system. 2:19:34 PM CHAIR LEDOUX asked why the claims would be filed in-camera. MS. MEADE responded that that is exactly her question. The bill reads that the complaint shall be filed with the court in-camera and remain under seal with the court holding it for 60-days, which is not the typical procedure for a complaint. She expressed that she was unsure what the judge would be looking for in the in-camera review to decide whether the next step should be taken or not. Again, she related, those are procedural issues that could perhaps be worked out with the sponsor and possibly a different procedure could be developed. 2:20:17 PM REPRESENTATIVE CLAMAN noted there is the potential of pro per claims being brought, but isn't another one of the likely consequences of having a false claims act in the state is that there will be some group of law firms that become specialists in bringing these claims because that is his impression on a national level. MS. MEADE expressed that she would be speculating and does not know the consequences of false claims acts in other states. 2:21:25 PM CHAIR LEDOUX asked Representative Kreiss-Tomkins whether he can advise the committee as to why the bill reads filing in-camera. REPRESENTATIVE KREISS-TOMKINS deferred to Ms. Kraly or Mr. Magdanz, and opined that the preview is to be certified by the federal government as a false claims act on the state level in order to receive enhanced recovery for Medicaid fraud. He asked the witnesses whether this language is different from what is in the Medicaid reform bill in the Senate. 2:22:18 PM MS. KRALY referred to the in-camera and under seal requirement in this bill and opined that there is an under seal provision language in SB 74, but she needed to confirm. She explained that the Office of the Inspector General has guidelines for purposes of certifying a Medicaid False Claims Act and that language is required to be a state act in order to receive certification, especially as to it being under seal. The purpose of the in-camera provision is to allow the Department of Law to investigate the merits of the claim without the person who committed the alleged false claims being served with the complaint which, she noted, goes back to the question of protecting against frivolous complaints. Normally, a complaint is filed, the defendant is served, and answers happen. Whereas, in this bill, the complaint is filed in-camera, under seal, and is confidential; therefore, the Department of Law has the ability to properly investigate the claim to determine the merits of the claim and to avoid the frivolous lawsuits or inappropriate prosecution of the claim before it is determined necessary to proceed. It is a procedural safeguard, she described, to avoid individuals who may be alleged to have committed frauds or false claims from having to defend something before it is actually proven that it's a meritorious claim. She reiterated that it is a procedural safeguard built into all of the false claims she reviewed while working on the other bill, and then she reviewed this bill this past week. 2:24:18 PM CHAIR LEDOUX questioned whether it would be just the opposite by allowing someone to be investigated without their knowledge of an investigation. She said she does not see it as something that is going to safeguard the interests of the defendant, but rather something that allows a person to file a suit against another person and investigate that suit without them being aware of it. She added that it is not necessarily a bad thing, but the reasoning. MS. KRALY agreed that there is truth to Chair LeDoux's statement and some accuracy to what Ms. Kraly said as well. She opined that in order to investigate the claim, the Department of Law has the ability to conduct discovery and seek subpoenas. Absent an open court file, she said she was not sure how it happens under the construction of the False Claims Act. It would be necessary to have a court case number and a case to proceed in order to get a subpoena and do those sorts of things. She opined that it is a procedural safeguard and she could look into it further, but generally those are the protections that are out there to alleviate some of those issues. Further, she related, it is a requirement for federal certification in false claims for Medicaid purposes. 2:25:53 PM REPRESENTATIVE KELLER asked whether the in-camera requirement was to protect health records. MS. KRALY answered that there could be other confidential proprietary tax information. When filed under seal, there is limited access of information not allowed to be shared elsewhere under an administrative rule to court personnel, she said. It would protect not just health information but potentially other business information that would be proprietary in nature. REPRESENTATIVE KELLER asked the number of qui tam cases in Alaska she is aware of. MS. KRALY answered that she is not familiar with whether there are active cases currently, but she could provide information to the committee regarding the number of cases the state has participated in on the federal level and information regarding recoveries. 2:26:53 PM REPRESENTATIVE CLAMAN referred to the 60-day period and commented that it has been part of federal law since it was enacted, just after the Civil War, and he opined that it relates to all of the things being discussed and not being able to investigate the claim before the evidence goes away. He surmised there are the issues of how the government gets its investigation together, and how the investigation is performed before the party finds out they are being investigated. He said he thought that it may have to do with whistleblower protections in that if someone comes forward and the government elects to take on the lawsuit, the complaining party has more protections than they might if they were going solo. MS. KRALY noted those were excellent points. 2:28:44 PM MS. MEADE said that, although, the language may be required by federal law, Alaska has definite definitions for what is "under seal" and what is "confidential." She explained that documents filed "under seal" are available solely to the judge, whereas, documents filed "confidential" are available to the judge, the judge's assistant, and court employees for case processing purposes. Ms. Meade reiterated that she would like to work with the sponsor regarding possible language that documents can be filed confidentially, which is different than under seal. She noted that she continues to wonder what filing with the court in-camera means, and they will work on that. [HB 347 was held over.]