State senators voted overwhelmingly Tuesday for legislation intended to combat Medicaid fraud, a year after rejecting a similar measure amid strong opposition from the state's hospitals.
The bill approved Tuesday included a compromise with the hospitals that lawmakers said would protect them against frivolous lawsuits. It passed, 37-8.
"It is a great day," said Lt. Gov. Anthony G. Brown, who has been lobbying for the bill on behalf of the O'Malley administration.
The legislation encourages whistle-blowers to bring fraud lawsuits, and allows them to share in damages awarded. But under the deal struck with the hospitals, the state would have to sign onto their suits for the cases to go forward.
State officials estimate that up to 10 percent of the $6.2 billion in federal and state Medicaid funds, or $620 million, is spent fraudulently. The administration believes the bill would net $20 million in savings next year.
The legislation now awaits approval by the House of Delegates, where Speaker Michael E. Busch said he was "hopeful" about its chances.
After it failed in the Senate last year, Busch said, hospitals and lawmakers began brokering a deal.
"The fact of the matter is the hard work that everyone had put in is reflected in the Senate margin," Busch said.
Del. Samuel I. Rosenberg, the vice chairman of the House Judiciary Committee, said the "impressive margin" by which the legislation passed the Senate would provide momentum for House approval.