Don’t be Fooled! Bounty Hunters will Win and Taxpayers will lose if Pennsylvania enacts a False Claims Act

(Harrisburg, PA) The following is a statement from Curt Schroder, Executive Director of the Pennsylvania Coalition for Civil Justice Reform, in response to the January 13th press conference advocating for passage of a Pennsylvania False Claims Act:

“The General Assembly needs to fully understand the impact of passing a state-based False Claims Act before it is seduced by the siren song of enhanced recovery money for Medicaid fraud and non-fraudulent claims.  Simply put, Pennsylvania will recover less money under a state False Claims Act than it would if it continues to allow cases to be brought under the federal False Claims Statute.

All Medicaid recovery cases involve money for both the federal and state government. These claims can be filed under the federal False Claims Act without the need for a state act. As an incentive to adopt state false claims legislation, the federal government will allot an extra 10% of the recovery to any state with its own false claims act.

But the math doesn’t work for Pennsylvania.  Although proponents point to the additional 10% recovery to the state, they fail to mention that once the ‘bounty hunter’ plaintiff receives its percentage of the state’s recovery (up to 30%) the state will recover less money than it would have had the case been brought under the current federal statute.

In fact, with a state-based False Claims Act, the ‘bounty-hunter’ plaintiff receives a double recovery by taking a contingency fee from both the state share of the recovery and the federal government’s share.  The only ones benefitting from this scheme are the plaintiff attorneys who bring these suits and their cadre of well-placed ‘bounty hunters’ who report alleged abuse for the purpose of filing suit under a state False Claims Act.  Pennsylvania taxpayers are left with less funds recovered due to the massive payouts to the ‘bounty hunter’ under a state False Claims Act.

A recent report from the House Government Oversight Committee advocating passage of a state False Claims Act is flawed in several respects.  Nowhere in the report is the payout to the ‘bounty hunter’ discussed that causes Pennsylvania to lose money under a state False Claims Act.  Neither does the report mention the increased funding that would need to be provided to the Attorney General who, under a state False Claims Act, is required to review EVERY case filed by ‘bounty hunting’ plaintiffs (potentially thousands each year) to determine if the Office of Attorney General will take the case.

Wisconsin repealed its False Claims Act in 2015 and there are good reasons why many states have decided NOT to enact their own False Claims Act.

The Pennsylvania Coalition for Civil Justice Reform urges that hearings be held before any action is taken on this very complicated piece of legislation.  Legislators need to understand the full impact of what they are being asked to enact and not rely on plaintiff lawyers and their allies promoting another get rich scheme at taxpayer’s expense.”

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The Pennsylvania Coalition for Civil Justice Reform is a 501(c )(6), not-for-profit, nonpartisan advocacy organization comprised of a diverse group of organizations and individuals committed to bringing fairness to Pennsylvania’s courts by raising awareness of civil justice issues and advocating for legal reform. Additional information is available at https://paforciviljusticereform.org, https://www.facebook.com/paciviljustice/ or  https://twitter.com/paciviljustice.

CONTACT: Curt Schroder, 717-461-3577 or curt@pccjr.org

January 13, 2020

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