What are the Texas Whistleblower Laws (the Texas Whistleblower Act and The Texas Medicaid Fraud Prevention Act)?
Texas has two whistleblower laws, the Texas Whistleblower Act and Texas Medicaid Fraud Prevention Act, which deal with different types of whistleblower cases. Both statutes are narrow in scope and apply in limited circumstances.
What is the Texas Medicaid Fraud Prevention Act?
The Texas Medicaid Fraud Prevention Act targets primarily Medicaid fraud and has provisions that allow whistleblowers to expose Medicaid fraud by filing qui tam lawsuits. That law protects whistleblowers and rewards them if Medicaid funds are recovered as a result of their information and assistance.
Under the Texas Medicaid Fraud Prevention Act persons may be liable for knowingly submitting false or fraudulent claims to the state’s Medicaid program. Defendants also may be sued for paying or receiving bribes in exchange for referrals or ordering of supplies.
Penalties under the Texas Medicaid Fraud Prevention Act
A defendant may be ordered to pay damages equal to up to three times the actual harm to the state, plus civil fines for each violation of the Texas Medicaid fraud law.
Texas Medicaid Fraud Prevention Act Whistleblower Rewards
The whistleblower in a Texas Medicaid Fraud action may be awarded between 15 and 25 percent of proceeds recovered if the government intervenes in the case. If whistleblowers proceed with a case on their own, they may receive between 25 and 30 percent of the amounts recovered. The court may reduce the value of the award if the whistleblower planned and initiated the fraud or if the action is largely based on information disclosed in the media or public hearings.
Protection from Retaliation under the Texas Whistleblower Laws
The Texas whistleblower law protects whistleblowers who suffer employment retaliation because of their whistleblowing. Protection under the Texas whistleblower law includes:
- Reinstatement with the same seniority status that the whistleblower would have had but for the retaliation
- Two times the amount of back pay
- Interest on the back pay
- Compensation for any special damages sustained as a result of the retaliation
In successful whistleblower retaliation cases, the defendant is also required to pay litigation costs and reasonable attorneys’ fees.
Time Limits (Statute of Limitations) under the Texas Whistleblower Laws
Whistleblowers must generally file a qui tam complaint within six years of the violations they are reporting, but the time for filing may be extended in certain cases to up to ten years.
What is the Texas Whistleblower Act?
The Texas Whistleblower Act protects public employees from retaliation if they blow the whistle on the government agency that employs them. The law covers whistleblowers employed by state or local government entities, including commissions and boards, as well as employees of state higher education institutions. The law does not apply to employees in the private sector.
Under the Texas Whistleblower Act, the whistleblower is entitled to reinstatement, if fired or suspended; compensation for lost wages; court costs; attorneys’ fees; and limited compensation for other damages and costs.
The Texas Whistleblower Act has strict time limitations for whistleblower grievances. We do not provide representation for claims under the Texas Whistleblower Act, but we represent whistleblowers in claims brought under the Texas Medicaid Fraud Prevention Act.
[Updated October 2023]
Texas Whistleblower Law: Texas Medicaid Fraud Prevention Act
Tex. Human Resources Code Ann. § 36.002. Unlawful Acts
Tex. Human Resources Code Ann. § 36.003. Documentary Material in Possession of State Agency
Tex. Human Resources Code Ann. § 36.004. Immunity
Notwithstanding any other law, a person is not civilly or criminally liable for providing access to documentary material under this chapter to:
(1) an employee of the attorney general;
(2) an agency of this state, the United States, or another state;
(3) a criminal district attorney, district attorney, or county attorney of this state;
(4) the United States attorney general;
(5) a state or federal grand jury;
(6) a political subdivision of this state; or
(7) a person authorized by the attorney general to receive the information.
Tex. Human Resources Code Ann. § 36.005. Suspension or Revocation of Agreement; Professional Discipline
Tex. Human Resources Code Ann. § 36.006. Application of Other Law
The application of a civil remedy under this chapter does not preclude the application of another common law, statutory, or regulatory remedy, except that a person may not be liable for a civil remedy under this chapter and civil damages or a penalty under Section 32.039 if the civil remedy and civil damages or penalty are assessed for the same act.
Tex. Human Resources Code Ann. § 36.007. Recovery of Costs, Fees, and Expenses
The attorney general may recover fees, expenses, and costs reasonably incurred in obtaining injunctive relief or civil remedies or in conducting investigations under this chapter, including court costs, reasonable attorney’s fees, witness fees, and deposition fees.
Tex. Human Resources Code Ann. § 36.008. Use of Money Recovered
The legislature, in appropriating money recovered under this chapter, shall consider the requirements of the attorney general and other affected state agencies in investigating health care program fraud and enforcing this chapter.
Tex. Human Resources Code Ann. § 36.051. Injunctive Relief
(a) If the attorney general has reason to believe that a person is committing, has committed, or is about to commit an unlawful act, the attorney general may institute an action for an appropriate order to restrain the person from committing or continuing to commit the act.
(b) An action under this section shall be brought in a district court of Travis County or of a county in which any part of the unlawful act occurred, is occurring, or is about to occur.
Tex. Human Resources Code Ann. § 36.052. Civil Remedies
Tex. Human Resources Code Ann. § 36.053. Investigation
(a) The attorney general may take action under Subsection (b) if the attorney general has reason to believe that:
(1) a person has information or custody or control of documentary material relevant to the subject matter of an investigation of an alleged unlawful act;
(2) a person is committing, has committed, or is about to commit an unlawful act; or
(3) it is in the public interest to conduct an investigation to ascertain whether a person is committing, has committed, or is about to commit an unlawful act.
(b) In investigating an unlawful act, the attorney general may:
(1) require the person to file on a prescribed form a statement in writing, under oath or affirmation, as to all the facts and circumstances concerning the alleged unlawful act and other information considered necessary by the attorney general;
(2) examine under oath a person in connection with the alleged unlawful act; and
(3) execute in writing and serve on the person a civil investigative demand requiring the person to produce the documentary material and permit inspection and copying of the material under Section 36.054.
(c) The office of the attorney general may not release or disclose information that is obtained under Subsection (b)(1) or (2) or any documentary material or other record derived from the information except:
(1) by court order for good cause shown;
(2) with the consent of the person who provided the information;
(3) to an employee of the attorney general;
(4) to an agency of this state, the United States, or another state;
(5) to any attorney representing the state under Section 36.055 or in a civil action brought under Subchapter C1;
(6) to a political subdivision of this state; or
(7) to a person authorized by the attorney general to receive the information.
(d) The attorney general may use documentary material derived from information obtained under Subsection (b)(1) or (2), or copies of that material, as the attorney general determines necessary in the enforcement of this chapter, including presentation before a court.
(e) If a person fails to file a statement as required by Subsection (b)(1) or fails to submit to an examination as required by Subsection (b)(2), the attorney general may file in a district court of Travis County a petition for an order to compel the person to file the statement or submit to the examination within a period stated by court order. Failure to comply with an order entered under this subsection is punishable as contempt.
(f) An order issued by a district court under this section is subject to appeal to the supreme court.
Tex. Human Resources Code Ann. § 36.054. Civil Investigative Demand
Tex. Human Resources Code Ann. § 36.055. Attorney General as Relator in Federal Action
To the extent permitted by 31 U.S.C. Sections 3729–3733, the attorney general may bring an action as relator under 31 U.S.C. Section 3730 with respect to an act in connection with a health care program for which a person may be held liable under 31 U.S.C. Section 3729. The attorney general may contract with a private attorney to represent the state under this section.
Tex. Human Resources Code Ann. § 36.101. Action by Private Person Authorized
Tex. Human Resources Code Ann. § 36.102. Initiation of Action; Consent Required for Dismissal
(a) A person bringing an action under this subchapter shall serve a copy of the petition and a written disclosure of substantially all material evidence and information the person possesses on the attorney general in compliance with the Texas Rules of Civil Procedure.
(b) The petition shall be filed in camera and, except as provided by Subsection (c-1) or (d), shall remain under seal until at least the 180th day after the date the petition is filed or the date on which the state elects to intervene, whichever is earlier. The petition may not be served on the defendant until the court orders service on the defendant.
(c) The state may elect to intervene and proceed with the action not later than the 180th day after the date the attorney general receives the petition and the material evidence and information.
(c-1) At the time the state intervenes, the attorney general may file a motion with the court requesting that the petition remain under seal for an extended period.
(d) The state may, for good cause shown, move the court to extend the 180-day deadline under Subsection (b) or (c). A motion under this subsection may be supported by affidavits or other submissions in camera.
(e) An action under this subchapter may be dismissed only if the court and the attorney general consent in writing to the dismissal and state their reasons for consenting.
Tex. Human Resources Code Ann. § 36.1021. Standard of Proof
In an action under this subchapter, the state or person bringing the action must establish each element of the action, including damages, by a preponderance of the evidence.
Tex. Human Resources Code Ann. § 36.103. Answer by Defendant
A defendant is not required to file in accordance with the Texas Rules of Civil Procedure an answer to a petition filed under this subchapter until the petition is unsealed and served on the defendant.
Tex. Human Resources Code Ann. § 36.104. State Decision; Continuation of Action
(a) Not later than the last day of the period prescribed by Section 36.102(c) or an extension of that period as provided by Section 36.102(d), the state shall:
(1) proceed with the action; or
(2) notify the court that the state declines to take over the action.
(b) If the state declines to take over the action, the person bringing the action may proceed without the state’s participation. A person proceeding under this subsection may recover for an unlawful act for a period of up to six years before the date the lawsuit was filed, or for a period beginning when the unlawful act occurred until up to three years from the date the state knows or reasonably should have known facts material to the unlawful act, whichever of these two periods is longer, regardless of whether the unlawful act occurred more than six years before the date the lawsuit was filed. Notwithstanding the preceding sentence, in no event shall a person proceeding under this subsection recover for an unlawful act that occurred more than 10 years before the date the lawsuit was filed.
(b-1) On request by the state, the state is entitled to be served with copies of all pleadings filed in the action and be provided at the state’s expense with copies of all deposition transcripts. If the person bringing the action proceeds without the state’s participation, the court, without limiting the status and right of that person, may permit the state to intervene at a later date on a showing of good cause.
Tex. Human Resources Code Ann. § 36.105. Representation of State by Private Attorney
The attorney general may contract with a private attorney to represent the state in an action under this subchapter with which the state elects to proceed.
Tex. Human Resources Code Ann. § 36.106. Intervention by Other Parties Prohibited
A person other than the state may not intervene or bring a related action based on the facts underlying a pending action brought under this subchapter.
Tex. Human Resources Code Ann. § 36.107. Rights of Parties if State Continues Action
(a) If the state proceeds with the action, the state has the primary responsibility for prosecuting the action and is not bound by an act of the person bringing the action. The person bringing the action has the right to continue as a party to the action, subject to the limitations set forth by this section.
(b) The state may dismiss the action notwithstanding the objections of the person bringing the action if:
(1) the attorney general notifies the person that the state has filed a motion to dismiss; and
(2) the court provides the person with an opportunity for a hearing on the motion.
(c) The state may settle the action with the defendant notwithstanding the objections of the person bringing the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. On a showing of good cause, the hearing may be held in camera.
(d) On a showing by the state that unrestricted participation during the course of the litigation by the person bringing the action would interfere with or unduly delay the state’s prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may impose limitations on the person’s participation, including:
(1) limiting the number of witnesses the person may call;
(2) limiting the length of the testimony of witnesses called by the person;
(3) limiting the person’s cross-examination of witnesses; or
(4) otherwise limiting the participation by the person in the litigation.
(e) On a showing by the defendant that unrestricted participation during the course of the litigation by the person bringing the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.
Tex. Human Resources Code Ann. § 36.108. Stay of Certain Discovery
(a) On a showing by the state that certain actions of discovery by the person bringing the action would interfere with the state’s investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay the discovery for a period not to exceed 60 days.
(b) The court shall hear a motion to stay discovery under this section in camera.
(c) The court may extend the period prescribed by Subsection (a) on a further showing in camera that the state has pursued the criminal or civil investigation or proceedings with reasonable diligence and that any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.
Tex. Human Resources Code Ann. § 36.109. Pursuit of Alternate Remedy by State
(a) Notwithstanding Section 36.101, the state may elect to pursue the state’s claim through any alternate remedy available to the state, including any administrative proceeding to determine an administrative penalty. If an alternate remedy is pursued in another proceeding, the person bringing the action has the same rights in the other proceeding as the person would have had if the action had continued under this subchapter.
(b) A finding of fact or conclusion of law made in the other proceeding that has become final is conclusive on all parties to an action under this subchapter. For purposes of this subsection, a finding or conclusion is final if:
(1) the finding or conclusion has been finally determined on appeal to the appropriate court;
(2) no appeal has been filed with respect to the finding or conclusion and all time for filing an appeal has expired; or
(3) the finding or conclusion is not subject to judicial review.
Tex. Human Resources Code Ann. § 36.110. Award to Private Plaintiff
(a) If the state proceeds with an action under this subchapter, the person bringing the action is entitled, except as provided by Subsection (b), to receive at least 15 percent but not more than 25 percent of the proceeds of the action, depending on the extent to which the person substantially contributed to the prosecution of the action.
(a-1) If the state does not proceed with an action under this subchapter, the person bringing the action is entitled, except as provided by Subsection (b), to receive at least 25 percent but not more than 30 percent of the proceeds of the action. The entitlement of a person under this subsection is not affected by any subsequent intervention in the action by the state in accordance with Section 36.104(b-1).
(b) If the court finds that the action is based primarily on disclosures of specific information, other than information provided by the person bringing the action, relating to allegations or transactions in a Texas or federal criminal or civil hearing, in a Texas or federal legislative or administrative report, hearing, audit, or investigation, or from the news media, the court may award the amount the court considers appropriate but not more than 10 percent of the proceeds of the action. The court shall consider the significance of the information and the role of the person bringing the action in advancing the case to litigation.
(c) A payment to a person under this section shall be made from the proceeds of the action. A person receiving a payment under this section is also entitled to receive from the defendant an amount for reasonable expenses, reasonable attorney’s fees, and costs that the court finds to have been necessarily incurred. The court’s determination of expenses, fees, and costs to be awarded under this subsection shall be made only after the defendant has been found liable in the action or the claim is settled.
(d) In this section, “proceeds of the action” includes proceeds of a settlement of the action.
Tex. Human Resources Code Ann. § 36.111. Reduction of Award
(a) If the court finds that the action was brought by a person who planned and initiated the violation of Section 36.002 on which the action was brought, the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action the person would otherwise receive under Section 36.110, taking into account the person’s role in advancing the case to litigation and any relevant circumstances pertaining to the violation.
(b) If the person bringing the action is convicted of criminal conduct arising from the person’s role in the violation of Section 36.002, the court shall dismiss the person from the civil action and the person may not receive any share of the proceeds of the action. A dismissal under this subsection does not prejudice the right of the state to continue the action.
Tex. Human Resources Code Ann. § 36.112. Award to Defendant for Frivolous Action
Chapter 105, Civil Practice and Remedies Code, applies in an action under this subchapter with which the state proceeds.
Tex. Human Resources Code Ann. § 36.113. Certain Actions Barred
(a) A person may not bring an action under this subchapter that is based on allegations or transactions that are the subject of a civil suit or an administrative penalty proceeding in which the state is already a party.
(b) The court shall dismiss an action or claim under this subchapter, unless opposed by the attorney general, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed in a Texas or federal criminal or civil hearing in which the state or an agent of the state is a party, in a Texas legislative or administrative report, or other Texas hearing, audit, or investigation, or from the news media, unless the person bringing the action is an original source of the information. In this subsection, “original source” means an individual who:
(1) prior to a public disclosure under this subsection, has voluntarily disclosed to the state the information on which allegations or transactions in a claim are based; or
(2) has knowledge that is independent of and materially adds to the publicly disclosed allegation or transactions and who has voluntarily provided the information to the state before filing an action under this subchapter.
(c) Repealed by Acts 2013, 83rd Leg., ch. 572 (S.B. 746), § 6.
Tex. Human Resources Code Ann. § 36.114. State Not Liable for Certain Expenses
The state is not liable for expenses that a person incurs in bringing an action under this subchapter.
Tex. Human Resources Code Ann. § 36.115. Retaliation Against Person Prohibited
(a) A person, including an employee, contractor, or agent, who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of a lawful act taken by the person or associated others in furtherance of an action under this subchapter, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this subchapter, or other efforts taken by the person to stop one or more violations of Section 36.002 is entitled to:
(1) reinstatement with the same seniority status the person would have had but for the discrimination; and
(2) not less than two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees.
(b) A person may bring an action in the appropriate district court for the relief provided in this section.
(c) A person must bring suit on an action under this section not later than the third anniversary of the date on which the cause of action accrues. For purposes of this section, the cause of action accrues on the date the retaliation occurs.
Tex. Human Resources Code Ann. § 36.116. Sovereign Immunity Not Waived
Except as provided by Section 36.112, this subchapter does not waive sovereign immunity.
Tex. Human Resources Code Ann. § 36.117. Attorney General Compensation
The office of the attorney general may retain a reasonable portion of recoveries under this subchapter, not to exceed amounts specified in the General Appropriations Act, for the administration of this subchapter.