In response to Governor Josh Shapiro’s call for the General Assembly to enact a state False Claims Act in his recent budget address, the Pennsylvania Coalition for Civil Justice Reform (PCCJR) held a press conference Wednesday morning to draw attention to the harmful consequences such a law could have for the Commonwealth’s health care providers and small businesses.
PCCJR Executive Director Curt Schroder was joined by representatives from Pennsylvania’s business and health care communities, who expressed concern that a state False Claims Act would increase litigation, drive up costs, and duplicate enforcement tools that already exist under federal and state law.
A state False Claims Act would allow private individuals and attorneys to file lawsuits on behalf of the government—known as qui tam actions—alleging that state funds were misspent and then claim a hefty share of any recovery. PCCJR argues that this approach is unnecessary because a federal False Claims Act is already in place and Pennsylvania benefits from that system today. The vast majority of false claims cases involve Medicaid, and when cases are brought under federal law, the Commonwealth already receives its full share of recovered funds. In addition, the Pennsylvania Attorney General already has the authority to pursue Medicaid fraud directly, making a new state statute redundant.
Rather than increasing revenue for the Commonwealth as promoters claim, a state False Claims Act could actually reduce the amount of money Pennsylvania ultimately keeps. Under current federal law, qui tam —often disgruntled or former employees acting as bounty hunters—may recover a percentage of the federal share of Medicaid recoveries, but they are not allowed to take a portion of Pennsylvania’s Medicaid dollars. That would change under a state False Claims Act. Private plaintiffs and their attorneys could receive up to 30 percent of the Commonwealth’s share of recovered funds, effectively allowing them to profit from both the federal and state portions of a settlement. This double recovery is the true driving force behind the proposal, turning enforcement away from the Attorney General and into a lucrative business model for trial attorneys.
The expanded financial incentives created by a state False Claims Act would lead to an increase in lawsuits, regardless of merit. This would further strain an already overburdened civil justice system and impose significant litigation costs on small businesses and those who provide your health care. Businesses often settle rather than risk ruinous penalties and damages from False Claims suits, even when the suit is meritless.
Governor Shapiro has included a state False Claims Act as part of his $53.3 billion 2026–27 budget proposal, unveiled earlier this week, marking the official start of the new budget cycle. As the General Assembly enters recess and begins Appropriations Committee hearings in both chambers, PCCJR will continue working with lawmakers to highlight the risks and unintended consequences of adopting a state False Claims Act.