Renewed Push for Pennsylvania False Claims Act Builds on Local Successes in Philly and Allegheny County

by Nicole Jefferson and Rrita Osmani

Bipartisan Efforts to Pass a Statewide Pennsylvania FCA

On February 17, 2025, Pennsylvania State Senators Lindsey M. Williams (D-Allegheny) and Kristin Phillips-Hill (R-York) reintroduced SB 38, the Commonwealth Fraud Prevention Act for Taxpayer Accountability (CFPA).  This statewide False Claims Act (“FCA”) would build on existing local laws in Philadelphia and Allegheny County that protect public funds and whistleblower rights by allowing Pennsylvania to recover a greater share of funds involving fraud and provide greater protections against retaliation.

Specifically, it would explicitly prohibit employers from retaliating against whistleblowers and ensure certain remedies if such retaliation occurred. On March 6, 2025, SB 38 was referred to the Senate Health and Human Services Committee and is currently undergoing the committee review process.

On July 9, 2025, the Pennsylvania House of Representatives passed House Bill 1697 (“HB 1697”), sponsored by Representative Frank Burns, which could create a state FCA. It was then referred to the Senate Health and Human Services Committee on July 23, 2025, where it awaits a vote.

Although technically separate legislative efforts, both the CFPA and HB 1697 aim to combat fraud, offer incentives for whistleblowers to come forward and provide protection to them. Miller Shah LLP, which represents whistleblowers nationwide, continues to monitor the status of Pennsylvania’s long-debated FCA proposal and supports efforts that protect public funds and strengthen whistleblower rights.

Pennsylvania Lags Behind Other States in Adopting FCA

Currently, Pennsylvania is the largest state without a state-level False Claims law. The 31 states with their own False Claims Act statutes have recovered billions in fraud judgments and settlements.

For example, New York has recovered $4 billion for the state since its FCA laws were adopted in 2011. California has the second highest total recoveries since implementing its California False Claims Act (CFCA) in 2001.

California also has the largest whistleblower reward, offering up to 50% of the total recovery, which is greater than the federal reward of between 15-30%. The proposed Pennsylvania False Claims Act would allow whistleblowers to be awarded between 15% to 30%, which is comparable to the federal provision

Other states’ False Claims Act are limited to fraud in certain areas. For example, Arkansas, Louisiana, Michigan, Missouri, New Hampshire, and Texas have Medicaid-Specific False Claims Act that limit individuals to bringing claims of fraud only against Medicaid, whereas other states’ False Aims Act covers a broader variety of state-funded programs.

Existing Local False Claims Act Statutes in Allegheny County & Philadelphia

In Pennsylvania, there exist county-specific regulations and protections that in essence create local False Claims Acts. Allegheny County and the City of Philadelphia utilize their own False Claims Act laws.

For example, the Philadelphia False Claims Ordinance passed February 2010 as part of Bill No. 090467 provides the process for recovering monetary damages from persons who file false or fraudulent claims with the City and the procedure for persons with such knowledge to inform the City and how to commence civil actions on behalf of the City.

Additionally, the Allegheny County False Claims Ordinance in Chapter 485 of the Code of Allegheny County explains that private persons can submit a civil complaint alleging violations of knowingly presenting or causing to be presented a false claim for payment or approval, knowingly making or causing to be made or used a false record or statement material to a false or fraudulent claim, among other violations.

Currently, Allegheny County and Philadelphia are the only counties in Pennsylvania that have adopted False Claims Laws.

Pennsylvania Organizations Pushback Against State False Claims Act

Pennsylvania has been slower in its moves to adopt a state-wide False Claims Act in part because of opposition from local healthcare industry groups and the existing powers of the Attorney General, which some believe cover the same goals of the FCA.

The Hospital and Healthsystem Association of Pennsylvania (HAP) and the Pennsylvania Health Care Association have been vocal opponents of a statewide False Claims Act, arguing that it would incentivize people to submit “trivial claims” and cause funds to be diverted from critical patient care toward high compliance costs and litigation battles.

Specifically, they are concerned about the economic effect this would have on financially fragile and rural hospitals.

The PA Coalition for Civil Justice Reform (PCCJR), wary of false revenue projections, says that the False Claims Act would counteract potential recoveries because of increased costs and demand on the state. The PA Coalition for Civil Justice Reform cited Wisconsin’s 2015 repeal of its False Claims Act, which it first implemented in 2007 as an act specifically limited to Medicaid fraud, as an example of the shortcomings of a state-level FCA. Wisconsin is the only state to have repealed its False Claims Act. Without conducting hearings or public discussions, lawmakers repealed the act as part of the 2015 state budget bill that necessitated restructuring of funds.

Opponents Cite Overlap with Attorney General Authority

Other pushback against a statewide False Claims Act is based on the fact that the PA Attorney General Office has capacities to address particular fraudulent activities including consumer protections against unfair and deceptive business practices, and the ability to conduct criminal prosecutions relating to Medicaid fraud through its robust Medicaid Fraud Control Section (MFCS).

Therefore, some opponents of the Commonwealth state that it would essentially be doubling up on services already performed. PA’s Whistleblower Law under 43 P.S. 1421-1428 includes a statement prohibiting retaliation and discrimination.

The proposed HB 1697 and CFPA would not replace the existing PA Whistleblower Law but would essentially elaborate on and fill a necessary gap in the legislation. A statewide law would formalize process and procedures, strengthen protections, empower individuals to report fraud, and expand the amount in recoveries to go to the state.