State Level False Claims Acts
More than 30 states have enacted False Claims Acts, but their strength varies dramatically. California offers the nation’s largest whistleblower reward—up to 50% of total recovery, far exceeding the federal 15-30% range—and covers fraud against private insurers. New York has recovered over $4 billion since 2011 and applies its FCA broadly to “almost any situation where state dollars are involved”. Illinois also covers private insurance fraud, giving whistleblowers additional avenues for reporting.
At the other end of the spectrum, Texas and Oklahoma limit qui tam claims to Medicaid fraud only. Texas’s Medicaid Fraud Prevention Act also does not require materiality, a departure from federal standards. Arkansas has a Medicaid False Claims Act but does not permit qui tam actions at all—whistleblowers can only receive a reward of up to 10% for information leading to recovery. Pennsylvania remains the largest state without any state FCA, though legislation is pending.
For whistleblowers, understanding these differences is critical. A case that may be weak under federal law could succeed in a state with broader liability, higher rewards, or private insurer coverage. At Barrett Johnston, we help whistleblowers navigate this complex patchwork—identifying the most favorable jurisdictions and maximizing the impact of their disclosures.
The federal False Claims Act does not cover fraud against state or local government programs because its jurisdictional reach is limited by law.
– Jurisdictional limits: The FCA is designed to combat fraud against the federal government. Its authority is confined to cases involving federal funds. For programs funded entirely by state or local budgets, the FCA has no jurisdiction.
– Federalism boundaries: State and local governments have independent fiscal and enforcement sovereignty. Federal law generally does not intrude on state internal affairs; fraud against state funds is for states to address under their own laws.
– State-level remedies: This gap is why many states have enacted their own false claims acts. In cases involving state funds, whistleblowers must also bring claims under applicable state laws to recover state money.
State False Claims Acts typically cover fraud against state government programs, with many limited to healthcare or Medicaid fraud.
Some states have broader statutes covering fraud against any state program, similar to the federal FCA. A few states like New York and Rhode Island even cover tax fraud.
Key differences from the federal FCA include:
– Scope: State FCAs often apply only to Medicaid fraud, while the federal FCA covers all federal programs
– Coverage: Some state FCAs are broader than the federal version, covering tax fraud or private insurer fraud
– Qui tam provisions: Most but not all state FCAs include qui tam provisions
States with False Claims Acts (34 states + D.C.):
Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington
States without False Claims Acts (16 states):
Alabama, Arizona, Idaho, Kansas, Kentucky, Maine, Missouri, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, West Virginia, Wyoming
States with broader protections than the federal FCA:
A few states have expanded their FCAs beyond the federal model. Notably, New York and Illinois have statutes that apply to at least some forms of tax fraud, which the federal FCA expressly exempts. California and Illinois have whistleblower statutes that cover false claims submitted to private insurers as well. Additionally, some states are broadening their FCAs to reach new types of government claims beyond healthcare.
The core difference is the source of funds recovered. A federal FCA claim for Medicaid fraud only covers the federal portion of the defrauded funds, as Medicaid is jointly funded by the state and federal governments.
A whistleblower must assert claims under a relevant state False Claims Act to recover the state’s share.
While these claims are often combined in a single lawsuit, state FCAs can vary significantly in scope; some only cover Medicaid fraud, whereas the federal FCA applies broadly to all federal programs.
State FCAs handle the public disclosure bar differently from the federal statute in ways that can significantly affect whistleblowers. While the federal FCA bars claims based on disclosures in specified federal sources like congressional reports or news media, some states have broader or narrower interpretations.
– California courts have ruled that SEC filings do not count as public disclosures under the state FCA, even though they might under federal law
– New York amended its FCA to clarify that information posted on the internet or a computer network is not considered publicly disclosed by news media
– Illinois courts have taken a more relator-friendly stance in interpreting the bar
For whistleblowers, these differences mean that a case barred under the federal FCA might still proceed in a state with a narrower public disclosure bar.
Yes. Claims under state false claims acts and the federal False Claims Act are not mutually exclusive and are often filed together in the same complaint.
This is especially common in Medicaid fraud cases, which involve both federal and state funds. A whistleblower can file under both acts, naming both the federal and state governments as plaintiffs in a single lawsuit.
Federal courts have jurisdiction over such state law claims when they arise from the same transaction or occurrence as the federal claim. Combining claims in one case is relatively straightforward, though state laws vary and some states lack false claims acts entirely.
Yes, some local governments—meaning cities, counties, and municipalities—have their own false claims laws. These local ordinances are modeled on the federal and state FCAs and typically include whistleblower reward provisions.
– They operate alongside state and federal FCAs. A whistleblower can often bring claims under all three in a single lawsuit if the fraud involves funds from each level of government
– Local laws usually cover fraud against the local government itself, such as false claims for city contracts or grants
Examples include New York City, Chicago, Philadelphia, Allegheny County, and several Florida localities.
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