Overview of State-Level False Claims Acts
Currently, more than 30 states have state-level versions of the False Claims Act, which have returned millions of dollars lost to fraud back to state coffers. In fact, in 2021, the last year data is available, 11 states’ false claims acts returned over $267 million to state governments, according to data from the Anti-Fraud Coalition.
Special Focus on Healthcare Fraud and State Variations
Some states limit False Claims Act lawsuits to healthcare-related fraud, including Louisiana, Michigan, New Hampshire, Texas, and Washington state. Last year the state of Connecticut greatly expanded the state’s False Claims Act to cover non-healthcare related fraud. Connecticut Attorney General William Tong proposed the legislation, “An Act Concerning Liability for False and Fraudulent Claims,” in an effort to further combat waste, fraud, and abuse of Connecticut’s tax dollars. The changes took effect on July 1, 2023.
Connecticut Expands Its False Claims Act
Before the bill’s passage, Connecticut’s False Claims Act applied only to false or fraudulent claims made to state-administered health or human services programs, covering programs at just nine agencies in the state. The 2023 amendment removed the language that restricted lawsuits to just those healthcare programs and added language that covered false claims made to most other state programs. More than one hundred different agencies, offices, and quasi-public agencies spend tax dollars on behalf of the State of Connecticut. Under Connecticut’s expanded False Claims Act, false claims made to any of these agencies and programs can now be prosecuted. The expanded law, however, does not cover underreporting of taxes, unlike the state false claims laws of some states, like New York.
As Connecticut Attorney General Tong explained in advocating passage of the amendment, “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.”
Impact of the Expanded False Claims Act in Connecticut
Connecticut’s False Claims Act was originally signed into law in 2009, giving the Office of the Attorney General authority to investigate and civilly prosecute fraud and abuse of taxpayer funds. Even under the earlier version of the statute, the Office of the Attorney General, in conjunction with federal and state law enforcement partners, recovered over $181 million in misspent public dollars, according to Attorney General Tong. The Attorney General said that by expanding the act, he hoped to build on his office’s “13-year track record of successful health care fraud prosecutions, based on excellent partnerships with our state and federal law enforcement and investigative partners.”
Historical Context and Importance of Whistleblower Provisions
Connecticut’s False Claims Act, and the false claims acts of other states, was modeled after the federal False Claims Act, which was enacted in its modern form in 1986 and has recovered billions of dollars of taxpayer money. Like the federal False Claims Act on which it is modeled, the Connecticut False Claims Act contains whistleblower or “qui tam” provisions to incentivize individuals to report fraud against government programs. Whistleblowers can file lawsuits on behalf of the government. If a whistleblower’s lawsuit leads to a recovery for the government, the whistleblower is entitled to a reward between 15 and 30 percent of the funds collected.