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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. 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?