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Duplicative State False Claims Act Could be Counterproductive to Patients, Hospitals

January 14, 2020

On Monday, the Pennsylvania Attorney General was joined by legislators to outline measures which they believe will curb fraud within Pennsylvania’s Medical Assistance program, Medicaid. While a package of legislation was proposed, the focus of Monday’s announcement was legislation implementing a State False Claims Act in addition to the existing Federal False Claims Act.

HAP believes the current federal law is effective and implementing a state false claims is duplicative, unnecessary, and, in some cases, harmful to patient access to care.

“The Pennsylvania hospital community’s core mission is to care for every patient who walks through the doors, regardless of their health status or ability to pay,” said Andy Carter, HAP president and CEO. “Hospitals and government share a common interest in being good stewards of taxpayer dollars; however, an unnecessary and duplicative state false claims act could threaten care for Pennsylvania patients. Take, for example, rural hospitals which already are operating on razor-thin margins. One frivolous suit could cause an entire community’s source of health care to disappear, jeopardizing the area’s economy at the same time. The only true winners under a state false claims act are the trial attorneys—and our patients stand to lose the most."

A false claims act is a federal law that enables the federal government to recoup taxpayer dollars that have been knowingly and fraudulently obtained. While a state false claims act also aims to prevent Medicaid fraud, HAP believes it would prove to be counterproductive to the claims that Pennsylvania stands to recoup more taxpayer dollars.

Under a state false claims act, in order receive the federal incentive, Pennsylvania must provide an additional financial incentive to whistleblowers and, in turn, their trial attorneys. While under the existing federal false claims act, Pennsylvania would receive 100 percent of the state share for Medicaid fraud committed within their borders, with the addition of a state false claims act Pennsylvania’s recouped amount would be reduced due to the additional payment to the whistleblower.

For more information, contact Stephanie Watkins, HAP’s vice president, state legislative advocacy.