"PA Lagging on Whistleblower Law as States Reap Rewards"

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Pennsylvania Stalls on Whistleblower Fraud Law as Other States Cash In

A bipartisan proposal to let insiders sue on the state’s behalf has cleared the House and won the governor’s support, but powerful industry opponents continue to block a law that advocates say could return tens of millions in stolen taxpayer dollars each year.

Pennsylvania lawmakers are debating whether to adopt a state False Claims Act that would let whistleblowers sue on the commonwealth’s behalf over fraud involving public funds and share in any recovery. The proposed law mirrors the federal False Claims Act, which recovered more than 6.8 billion dollars in the most recent fiscal year, largely from health care fraud, with most cases initiated by whistleblowers. At least 29 states have passed similar statutes and receive an extra 10 percent of the federal share in Medicaid fraud cases when their laws meet federal standards, a bonus Pennsylvania currently forgoes.

Supporters, including Gov. Josh Shapiro and Sen. Lindsey Williams, argue the measure would deter fraud, boost recoveries, and stop Pennsylvania from “leaving money on the table.” The bill that passed the state House would allow treble damages and whistleblower awards of 10 to 30 percent, while adding protections against retaliation and fee-shifting for frivolous suits. Business, hospital, and accounting groups warn it could trigger costly, potentially abusive litigation, especially over complex or unclear billing and tax rules, and threaten already-strained rural hospitals. With the Senate yet to act, Pennsylvania remains the largest state without a comprehensive false claims statute, even as local laws already operate in Philadelphia and Allegheny County.