On January 31, Pennsylvania senators Kristin Phillips-Hill and Lindsey M. Williams announced that they plan to reintroduce legislation this session that will serve as a Pennsylvania False Claims Act. The Commonwealth Fraud Prevention Act for Taxpayer Accountability (“CFPA”) as it’s called was introduced last session and modeled after the Federal False Claims Act. This year marks the 160th year since the False Claims Act went into effect, and it appears Senators Phillips-Hill and Williams believe it is time for the state to implement its own. Thirty-one states currently have their own state false claims acts, including bordering states Maryland and New Jersey. States with their own false claims act are able to recover state-specific taxpayer dollars lost to fraud. Since its implementation in 2015, the state of Maryland has been able to recover $81.6 million, while New Jersey has been able to recoup $147 million since its false claims act was adopted in 2008. The CFPA would not only give prosecutors an important tool to combat fraud, but it also could potentially allow Pennsylvania to collect millions of dollars each year.
The CFPA encourages private citizens to come forward as whistleblowers against those filing false or fraudulent claims against the Pennsylvania government and is designed to protect whistleblowers against retaliation for reporting waste, fraud, and abuse of taxpayer dollars. The 2022 Association of Certified Fraud Examiners reported that about 42% of fraud is detected by tip and that more than 50% of those tips come from employees blowing the whistle on their employer. Whistleblowers are thus key to combating fraud and protecting Pennsylvania taxpayer dollars. Similar to the Federal False Claims Act, the CFPA would ensure that whistleblowers are protected from retaliation by their employer when trying to do the right thing.
Currently, Pennsylvania has the Pennsylvania Whistleblower Law which was enacted in 1986. The law, however, is not quite as expansive as the Federal False Claims Act. The Pennsylvania Whistleblower Law only applies to those employees working in the public sector or those who work for an employer who receives funds from a public body. Thus, employers that receive some type of Commonwealth funding such as Medicaid reimbursement can be prosecuted under the Pennsylvania Whistleblower Law. The law prohibits employers from retaliating or discriminating if an employee comes forward with a good-faith report about waste or wrongdoing. Unlike various state False Claims Acts, the Pennsylvania Whistleblower Law does not permit whistleblowers to initiate or prosecute fraud claims on behalf of government entities.
The enactment of a Pennsylvania False Claims Act would allow the state to recover millions of dollars each year and provide more and better protections to whistleblowers. The enactment of such a statute now, more than ever, would be especially beneficial given the rampant amount of pandemic-related fraud. Pennsylvania would be wise to follow the lead of more than half of the other states in the nation and pass its own false claims act.