To round out the major legislative changes that occurred in 2022 is HB 22-1119, the Colorado legislature has greatly expanded the power of citizens and public employees to combat governmental fraud and waste by passing the Colorado False Claims Act. Although this amendment has not been reported on very widely (with the laudable exception of Jim Flynn for The Gazette), it is the law that I am personally the most excited about and believe will make a significant difference in the battle to reduce governmental fraud and waste in Colorado.
HB 22-1119 is a major improvement on Colorado’s previous False Claims Act, which was passed in 2010 and limited to Medicare/Medicaid fraud. The new Colorado False Claims Act is modeled after the federal False Claims Act (also known as the “Lincoln Law”) that was passed after rampant fraud on the government during and after the Civil War.
The federal False Claims Act, like the Colorado False Claims Act, empowers citizens with knowledge of fraud and waste to bring qui tam actions on behalf of the government should the attorney general decline to pursue a case against the defendant. These whistleblowers, or “realtors,” prosecute fraud claims in the name of the government and are entitled a percentage of any funds that are recovered.
Both federal and Colorado False Claims Acts also provide a cause of action for individuals who face retaliation after complaining about or reporting fraud. This retaliation provision is particularly important for employee whistleblowers, who often face significant pressure, harassment, and termination by their employers after raising fraud complaints.
The expansion of the Colorado False Claims Act is particularly important in that it now extends retaliation protections to public employees who are not employees of the state. While state employees are entitled to separate protections under CRS 24-50.5-103, non-state public employees (such as employees of cities and school districts) had very limited or no remedies if they are retaliated against for blowing the whistle on fraud before the passage of the Colorado False Claims Act. Under HB 22-1119, non-state public employees are now able to bring wrongful termination claims on their own behalf if they are retaliated against for attempting to stop fraud on the government.
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