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House of Representatives
Session of 2013 - 2014 Regular Session


Posted: April 24, 2013 02:45 PM
From: Representative Brandon P. Neuman and Rep. Anthony M. DeLuca
To: All House members
Subject: Co-sponsorship of Legislation: Pennsylvania False Claims Act
In the near future we will be introducing legislation creating the Pennsylvania False Claims Act. This bill is designed to drastically reduce waste, fraud and abuse in state government. Similar legislation has been introduced in the House over the course of the past decade and was most recently introduced by Representative Gerber last session.

The Federal False Claims Act was first signed into law by President Abraham Lincoln to combat fraud that was being perpetrated by unscrupulous companies in the sale of supplies to the Union Army. It created a unique private-public partnership that gives a citizen the right to act as a sort of “private attorney general” and file suit on behalf of the US Government against those who have acted to defraud it. As an incentive for citizens to bring such claims, the Act also gives citizens the right to share in the Government’s recovery. Since the 1980’s when the Act was strengthened considerably amid incredible stories of defense contractors charging the US Navy hundreds of dollars for a hammer and a toilet seat, it has been wildly successful in returning money to the United States Treasury. Between 1986 and 2011 Federal False Claims Act settlements and judgments have totaled $31 billion.

In order to encourage the pursuit of Medicaid fraud at the State level, Congress enacted a law in 2007 that would increase a State’s share of recovery under a successful Medicaid fraud lawsuit by 10% if the State had in effect a qualifying False Claims Act. For instance, if in a particular Medicaid fraud case a State’s share of recovery is 50% with the Federal Government taking the other 50%, the State would instead be entitled to 60% and the Federal Government 40%. It is important to note, however, that a State’s False Claims Act that does not comport with the Federal guidelines for the 10% increase in recovery is nevertheless an important tool for the State to end waste, fraud and abuse in State Government contracting and programs. Twenty-nine States and the District of Columbia have their own version of a False Claims Act that protect and reward whistleblowers while punishing those who steal taxpayer dollars through fraudulent acts against State governments. Pennsylvania is not among them.

In these continuing tough economic times, we cannot afford to ignore any additional source of new revenue. A Pennsylvania False Claims Act would provide the Commonwealth with just such a revenue source.

Please join us in co-sponsoring this important legislation

Introduced as HB1493