A false claims act can help fill Pennsylvania’s budget gap

The  Pennsylvania House of Representatives recently passed a bill, House Bill 1697, that would finally create a state False Claims Act (FCA). This legislation, if enacted, will give Pennsylvania the tools it needs to hold fraudsters accountable and recover millions in taxpayer dollars wrongly spent. After receiving substantial bipartisan support in the House, the bill moves to the Senate.

The legislation will protect public funds, empower whistleblowers, and bring Pennsylvania in line with the rest of the country. 

Pennsylvania is the largest state without this basic anti-fraud tool

Pennsylvania remains the largest state in the nation without a false claims law. This is not just a statistical quirk—it’s a glaring vulnerability in the commonwealth’s fight against fraud. According to The Anti-Fraud Coalition, this absence puts Pennsylvania at a significant disadvantage in recovering fraudulent payments.

A recent legislative memo noted, “Pennsylvania is missing out on a golden opportunity to recover millions of dollars in taxpayer money from people who cheat state programs.” Rep. Frank Burns (D-Cambria), the bill’s sponsor, emphasized that the “bill targets large-scale fraud to hold businesses accountable and recover millions in taxpayer money that was wrongly spent.”

What  other states are recovering— and why Pennsylvania can’t

Since the federal False Claims Act was strengthened in 1986, it has helped the federal government recover over $78 billion in fraud-related judgments and settlements. In fiscal year 2024 alone, the U.S. Department of Justice obtained $2.9 billion in recoveries from civil fraud cases.

States with their own FCA statutes can join these federal actions or pursue standalone cases where state funds are at risk. New York, for example, has recovered more than $4 billion under its FCA since 2011. California has secured over $1.3 billion since 2000. Even smaller states like Massachusetts and Illinois recover tens of millions annually.

Pennsylvania, by contrast, forfeits the opportunity to independently pursue fraud against state programs especially in non-Medicaid areas like education, transportation, infrastructure and public procurement. 

In 2024, Pennsylvania’s Medicaid Fraud Control Section recovered $11.3 million through criminal prosecutions alone. That figure is commendable but represents only a fraction of the fraud likely occurring across the state’s $42 billion Medicaid program. According to The Center for Children and Families, Medicaid Fraud Control Units nationally recover $3.46 for every $1 spent on the effort. In Pennsylvania, that unit is hamstrung in what they can pursue without a state FCA.

A Pennsylvania FCA weould deliver immediate benefits

A state-level False Claims Act would immediately empower the attorney general and other agencies to pursue fraud far more effectively. According to the Anti-Fraud Coalition, the law would:

• Unlock an enhanced federal share of recoveries in joint Medicaid fraud actions, ensuring Pennsylvania keeps more of what it’s owed.
• Enable direct enforcement against fraud in all state-funded programs, not just Medicaid.
• Protect whistleblowers who are brave citizens who risk their livelihoods to expose waste and corruption which lead to higher taxes.
• Incentivize whistleblower lawsuits which have historically been responsible for the majority of FCA recoveries.

These reforms work. The federal government and states with FCAs know it. That’s why they continue to strengthen their laws, not weaken them.

Whistleblowers are our first line of defense

One of the most important aspects of the bill is the protection and incentivization of whistleblowers. Most fraud is invisible to the public. It hides in billing systems, contract line items and behind NDAs. The people who see it are often employees, vendors, or insiders. Giving them legal protections and a share in any recovery not only encourages them to come forward, it saves taxpayers money.

Between 1987 and 2019, whistleblowers were responsible for over *70% of all federal FCA recoveries. Those statistics are not merely impressive, they are essential. Without whistleblowers, much of the fraud uncovered would have continued for years unchecked.

Conclusion: This is a common-sense, bipartisan solution

Opponents claim this legislation could increase litigation or compliance costs for honest businesses despite decades of evidence from other states. That argument is not supported by decades of evidence from other states. Instead,  The existence of FCA laws typically leads to better compliance, fewer repeat offenses, and stronger deterrence against fraud. The idea that Pennsylvania should remain the only major state without this protection is indefensible.

Combating fraud should never be partisan. The federal False Claims Act was strengthened under both Democratic and Republican leadership. State-level FCAs have been passed by legislatures of all political stripes. Protecting taxpayer money is not a political goal. It is a moral and fiscal imperative.

This isn’t just about recovering “millions of dollars in taxpayer money,” it’s about sending a message that the commonwealth will no longer tolerate being a safe haven for fraud.

Eric H. Weitz is president of the Pennsylvania Association for Justice and founder of The Weitz Firm, LLC, renowned for winning multi-million-dollar verdicts and settlements in complex medical malpractice, catastrophic injury, and commercial litigation nationwide. A fierce advocate for patient safety, Eric serves on the Pennsylvania Patient Safety Authority Board and holds a Johns Hopkins’ certification in the field. Eric teaches trial advocacy as an adjunct professor at Villanova’s Charles Widger School of Law.