The OIG has updated its 2006 guidelines on how it determines whether a state false claims act law meets certain federal standards. By way of background, to encourage improved state efforts to fight Medicaid fraud, the Deficit Reduction Act (DRA) enables states that adopt state false claims acts to retain a greater portion of Medicaid overpayments. Specifically, the DRA decreases the federal government’s share of any Medicaid overpayment by 10 percentage points for any state that enacts a false claim act that meets standards established by HHS, effective January 1, 2007. To qualify, the state law must: (1) establish liability to the state for false or fraudulent claims described in the federal False Claims Act (FCA), with respect to Medicaid expenditures; (2) contain provisions that are at least as effective in rewarding and facilitating qui tam actions as those in the federal FCA; (3) contain a requirement for filing an action under seal for 60 days with review by the state Attorney General; and (4) contain a civil penalty that is not less than the amount authorized by the federal FCA. In August 2006, the OIG released guidelines on how it will determine whether a state law meets the DRA's requirements.  The new guidelines to reflect subsequent amendments to the FCA that modified the bases for FCA liability, expanded the rights of qui tam relators, and added an express requirement that civil penalties include adjustments under the Federal Civil Penalties Inflation Adjustment Act of 1990.  The guidelines also provide more specificity regarding the OIG’s standards based on the OIG’s experience in reviewing state laws to date. Notably, the new guidelines provide more prescriptive requirements for state laws pertaining to “Rewarding and Facilitating Qui Tam Actions,” with the OIG now expecting state laws to include 14 rather than 8 elements in this area.  The new guidelines are effective March 15, 2013.