Pennsylvania Thinks About Fighting Fraud with a State False Claims Act

 Will Pennsylvania get a new - albeit somewhat half-hearted - False Claims Act? Two legislators are urging the State to adopt a Pennsylvania False Claims Act that would at least allow the state to recover for health care fraud against the state.

As a whistleblower lawyer who handles False Claims Act suits, I would like to congratulate the bill's sponsors for taking a step that just plain makes sense.https://askcompetentlawyer.com/fraud/ First, putting a stop to fraud is an obvious no-brainer. Bill sponsor State Rep. Brandon Neuman pointed out that the bill "would deter fraud and punish wrongdoers, and "raise significant revenues through recovered losses and other damages." Why would Pennsylvania -- or any other state -- not want to do that?

Rep. Neuman also noted that if the state passed the statute, it would allow the state to get a 10% increase in the amount of money they receive for Medicaid recoveries.

Representative Neuman was talking about 42 U.S.C. § 1396h. Under that Statute, a state that passes a Medicaid false claims act that is deemed by the Federal government to be "at least as effective in rewarding and facilitating qui tam actions for false or fraudulent claims" as the Federal False Claims Act, will receive an extra share of the recovery in a Medicaid fraud case. Under the statute, the federal government has agreed to reduce the amount it will recover by 10%, and to allot that amount to the state government. Neuman was saying that it simply made sense to pass a law that (a) allowed the State to recover, so that (b) the State could not only recover, but recover 10% extra.

As an attorney who represents the whistleblowers who come forward with the qui tam cases that expose this type of fraud, I have two chief questions.

First, why haven't all the states not adopted similar legislation? What would a state not want to fight fraud? At a time when state coffers are alarmingly low, doesn't it make sense for states to do whatever they can to at least stop the flow of money going to fraudsters? The only thing an FCA statute fights is out-and-out fraud. Who out there is opposing statutes that allow the governments to get back the money someone took from them by fraud?

My second question is - why have so many states joined the fray - but only in a half-hearted, barely-in sense? If this statute is passed, Pennsylvania would join the 9 other states - Colorado, Connecticut, Iowa, Louisiana, Maryland, Michigan, Texas, Washington and Wisconsin -- that have adopted False Claims Act statutes that only address Medicaid/health care fraud.

Why on earth would a state adopt a statute that only protected the state from health care fraud? Why would a state that chooses not to be defrauded in the healthcare arena, decide it will simply live with highway contractor fraud, or building construction fraud, or computer system fraud? All of those types of fraud affect the bottom line for state taxpayers. A dollar lost to healthcare fraud is absolutely no worse for taxpayers than a dollar lost to school lunch fraud, or state sales tax fraud.

So while I commend Pennsylvania for taking the first step, I also ask - why only 1 step? Why not just stay that fraud is NOT ok in Pennsylvania.

Any other states listening?