With the potential to recover millions of dollars lost to fraud, Connecticut and Maryland are both looking to expand their states’ False Claims Acts this legislative session.
Connecticut’s legislation was proposed by the state’s Attorney General William Tong, citing the $181 million recovered in misspent tax dollars since Governor M. Jodi Rell signed into law Connecticut’s False Claims Act in 2009. That law gives the Office of the Attorney General limited authority to investigate and civilly prosecute fraud and abuse involving taxpayer funds.
Currently, Connecticut’s law applies only to spending in state-administered health or human services programs – just nine state agencies—and doesn’t apply to the more than one hundred different agencies, offices, and quasi-public agencies that spend tax dollars on behalf of Connecticut taxpayers. It is also more limited than the state false claims acts of some of its neighbors. Connecticut wants to expand its False Claims Act to cover fraud, abuse, and corruption involving and taxpayer funds and to more closely resemble the federal False Claims Act and neighboring states’ laws like New York, Massachusetts, Rhode Island, New Jersey, and Vermont that all resemble the federal law.
AG Tong said of the legislation (H.B. 6826), “No state agency, contract, or public dollar is immune from fraud, abuse, and corruption. That is true here in Connecticut, as it is everywhere. Connecticut needs the same laws and protections as every one of our neighboring states so that my office can pursue bad actors and get money back for taxpayers. My office has a 13-year track record of successful health care fraud prosecutions, based on excellent partnerships with our state and federal law enforcement and investigative partners. It’s time to close the False Claims Act loophole, build on that success, and ensure every taxpayer dollar is protected.”
The legislation is sponsored by State Rep. Matt Blumenthal, House Chair of the Government Administration and Elections Committee and State Sen. Mae Flexer, Senate Chair of the Government Administration and Elections Committee.
The following are examples from recent False Claims Act cases in Connecticut’s neighboring states of Massachusetts, New York, and New Jersey, which have more expansive False Claims Acts:
- charging a state for N95 masks needed for the pandemic that were never provided,
- failing to pay prevailing wages to workers on state projects,
- lying about minority-owned businesses,
- delivering substandard fuel that clogged heating systems in state buildings,
- obtaining contracts by faking compliance with state diversity requirements or misrepresenting the wages paid to workers,
- delivering unreliable environmental testing results, and
- falsely certifying the safety and substantial completion of the “Big Dig” tunnel that later collapsed.
Connecticut has returned over a hundred million tax dollars lost to fraud since the enactment of their False Claims Act. Expanding the law to different state agencies will only strengthen the program and recover additional tax dollars.
Maryland is also looking to expand the state’s two False Claims Acts (The Maryland False Claims Act and the Maryland False Health Claims Act). Currently, Maryland only allows False Claims Act cases to move forward when the state government intervenes.
The Maryland state legislature is considering amendments (HB0773/SB0666) to the state’s False Claims Acts to allow whistleblowers to continue to pursue a case when the state decides not to intervene. This would result in potentially millions of extra tax dollars lost to fraud returned to Maryland’s programs.
The legislation was proposed by the President of the Maryland Senate, Bill Ferguson and the House of Delegates Speaker Adrienne Jones as requested by Maryland Attorney General Anthony Brown.
Expanding Maryland’s False Claims Act and the Maryland False Health Claims Act has many benefits.
First, permitting relators to proceed with cases the state declines would amplify the state’s limited resources to prosecute fraud by strengthening the public-private partnership intended by the law. The strengthened enforcement would help guard against serious risks to public health and safety and the undermining of programs intended help vulnerable populations that depend on state programs including the Medicaid and school lunch programs.
Second, it would better incentivize whistleblowers – those in a position to know about fraudulent schemes often from the inside – to come forward to report wrongdoing because they will be able to proceed with a good case even if the government declines.
Finally, it makes settlement with the government more likely because fraudsters will know they may face an enforcement action even if the government elects not to intervene.
Maryland estimates Medicaid fraud recoveries totaled $62.6 million between 2018 and 2022 under the Maryland False Health Claims Act. Expanding the False Claims Acts to allow whistleblowers to continue a case if Maryland declines to intervene will only further incentivize whistleblowers to come forward and return more tax dollars to the state.