Don’t Forget the States: Connecticut Expands Its FCA

While the federal False Claims Act typically receives the most attention in FCA circles, more than half the states and the District of Columbia have analogous statutes with qui tam provisions. These state FCAs can play a big role in many whistleblower actions involving not just scrutiny by state Attorneys General but the U.S. Department of Justice as well. Healthcare investigations have been a prominent example, where DOJ has traditionally coordinated with state Medicare Fraud Control Units (MFCUs). As of this month, Connecticut has drastically expanded the reach of its FCA (the CFCA), specifically to go far beyond the healthcare space, demonstrating that the states may be becoming “laboratories of qui tam laws” and that it is a wise idea not to overlook them.

Since its enactment in 2009, the CFCA had been limited only to Connecticut Medicaid and state-run health or human services programs. But effective July 1, 2023, Public Act 23-129 (“An Act Concerning Liability for False and Fraudulent Claims”) has amended the CFCA to apply to alleged false claims presented to virtually all state agencies and quasi-public agencies. (The act did implement a carveout for tax-related claims, mirroring a similar provision in the federal FCA.) Supporters of the expansion cited potential vulnerabilities around the billions of additional federal dollars now being administered by the state as a result of the CARES Act and the Infrastructure Investment and Jobs Act. Proponents also noted a spate of pandemic-related and other recoveries made under more robust FCAs like New York’s, New Jersey’s, and Massachusetts’ in recent years. Connecticut Governor Ned Lamont signed the amendments into law over concerns about meritless lawsuits and possible adverse impacts on jobs. The drastic expansion of the volume of post-pandemic government contracting is, of course, not limited to Connecticut, and may lead to similar tinkering by other states, both by those that have FCAs and those that don’t.

We at Qui Notes will continue to monitor any state-level developments.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.