Pennsylvania Lacks a False Claims Law, Leaving Millions in Potential Fraud Recovery Unclaimed

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For more than two decades, state lawmakers from both parties in Pennsylvania have pushed for a new law to crack down on fraudulent government spending and encourage whistleblowers to come forward. However, powerful health care and business interests have repeatedly blocked these efforts, arguing the legislation would lead to a deluge of frivolous lawsuits and put struggling rural hospitals out of business. A bill that would give the state a new way to target fraud passed the state House with broad bipartisan support last summer, but it has not advanced in the state Senate. Democratic Gov. Josh Shapiro highlighted the issue in his budget address, saying the law would allow Pennsylvania to 'collect additional damages and recoup more state dollars that would otherwise be lost to fraud.'

Why it matters

Pennsylvania is the largest state without a false claims law, which allows whistleblowers to file lawsuits on the government's behalf and receive a share of the money that's recovered in damages and penalties. Federal prosecutors say the federal False Claims Act is one of their most powerful tools against fraud, and at least 29 states have passed their own versions of the law. Without its own law, Pennsylvania is leaving money on the table and passing up another avenue to fight fraud.

The details

The proposed law in Pennsylvania would mirror the federal False Claims Act, allowing whistleblowers to file lawsuits on the commonwealth's behalf if they believe a state contractor is billing for work that hasn't been performed. The state attorney general would have the option to pursue the case, and if the company is found liable, it would have to pay three times Pennsylvania's actual losses, as well as a civil penalty. If the case involved alleged Medicaid fraud, Pennsylvania would split the proceeds with the federal government and receive an additional 10% from the federal government's share.

• In 1999 and 2001, false claims bills passed the state House unanimously, but stalled in the state Senate.
• Similar measures were introduced in almost every legislative session between 2005 and 2025, but did not progress.
• In 2019, a statewide grand jury found 'systemic issues' that left Medicaid in Pennsylvania vulnerable to fraud, which helped gather momentum for a false claims act.
• Last summer, a bill that would give the state a new way to target fraud passed the state House with broad bipartisan support, but it has not advanced in the state Senate.
• Democratic Gov. Josh Shapiro highlighted the issue in his budget address earlier this month, saying the law would allow Pennsylvania to 'collect additional damages and recoup more state dollars that would otherwise be lost to fraud.'

What they’re saying

What’s next

The state Senate has not advanced the false claims bill passed by the state House, although it could be folded into this year's budget negotiations. Republican state Treasurer Stacy Garrity, who is likely to run against Shapiro for governor, has previously expressed support for the idea.