Last week, the PA Chamber joined a coalition of hospital associations and legal reform groups in sending a letter to the state Senate urging opposition to legislation (H.B. 1697) that would impose a state-level False Claims Act (FCA) in Pennsylvania.

In the letter, the coalition warned that creating a state FCA would be duplicative and would expose businesses and health care providers to significant new liability, while primarily benefiting private trial lawyers and professional bounty hunters. The group noted that Pennsylvania’s existing system is already effective: the Commonwealth’s Medicaid error rate is among the lowest in the nation, and the Attorney General’s Medicaid Fraud Control Section is recognized as one of the most effective in the country.

The coalition argued that a state FCA would undermine this success by allowing private actors to collect up to 30 percent of Pennsylvania’s share of any recovery, in addition to their share of the federal portion. This “double recovery,” the letter stated, would result in less money for the Commonwealth and create stronger incentives for opportunistic litigation. The coalition added that small businesses, rural hospitals, small physician practices, and clinics would be most vulnerable under what they described as a proposed “sue and settle” system.

Calling the bill a “cash grab disguised as reform,” the coalition urged the Senate to reject a Pennsylvania state False Claims Act – describing it as “anti-business, anti-health care, and ultimately harmful to Pennsylvania taxpayers” – and instead continue investing in anti-fraud programs that are already proven to work.