Connecticut State False Claims Act Expanded to Combat More Types of Fraud

Connecticut Governor Ned Lamont recently signed Public Act 23-129, titled “An Act Concerning Liability for False and Fraudulent Claims,” into law on June 26, 2023. This Act brings significant changes to Connecticut’s False Claims Act (CFCA) by expanding its application and scope of conduct covered. The Act removes the previous limitation that restricted the CFCA’s applicability solely to state-administered health or human services programs. As a result, the CFCA now applies to all claims for money or property made to the state of Connecticut, excluding any explicit exceptions stated in the CFCA. This expansion of the CFCA’s coverage became effective on July 1, 2023 and it’s believed it has retroactive applicability.  The retroactivity may not be violative of the ex post facto constitutional prohibitions, since the underlying conduct was always prohibited, but it may eventually be challenged in the courts. 

Until now, the CFCA primarily focused on prohibiting the knowing presentation or causing the presentation of false or fraudulent claims for payment or approval under state-administered health or human services programs. These programs included various state departments, such as the Department of Social Services and the Department of Mental Health and Addiction Services. Consequently, the CFCA’s jurisdiction was limited to claims arising within those specific programs, such as Medicaid claims submitted to the Department of Social Services.

However, with the Act in place, references to state-administered health or human services programs have been removed from the CFCA’s text. This removal includes the deletion of the program’s definition, thereby expanding the CFCA’s coverage to a broader range of conduct. As a result, the CFCA now prohibits, among other things, knowingly presenting or causing the presentation of false or fraudulent claims for payment or approval by the State of Connecticut, its agencies, departments, or quasi-public agencies in all capacities except any exemptions.  Essentially, it means if there’s fraud against the state of Connecticut then it may be able to be remedied through the CFCA and an individual may be entitled to a Connecticut False Claims Act award if the case is successful.  It also encompasses the act of making, using, or causing the use of false records or statements that are material to false or fraudulent claims. The definition of a claim remains unchanged, encompassing requests or demands for payment or property made to state officers, employees, agents, or recipients of state funds for the state’s benefit or the advancement of state programs or interests, but the damages will spring from actual payments

Additionally, the Act includes a provision exempting claims, records, or statements made under state tax laws, aligning with a similar exemption for tax matters in the federal False Claims Act and most states except for New York’s Tax Fraud whistleblower statute and Illinois’s whistleblower tax fraud components. 

While the Act’s primary objective is to expand the CFCA’s application beyond health care-related state agencies, it is essential for health care organizations to be aware of these changes and their continued applicability to reimbursement claims for services rendered to state health care programs. Furthermore, all state contractors, as well as participants in state grant programs and other initiatives involving state funds or property, should recognize that the CFCA’s expansion may subject their conduct and claims to increased scrutiny. This includes the potential for investigation by the Connecticut Attorney General and exposure to CFCA whistleblower suits.

The expansion of the CFCA in Connecticut signals a commitment to combat fraud and protect the integrity of financial transactions involving the state. Whistleblowers who uncover false claims and fraudulent activities can play a significant role in promoting transparency, accountability, and the fair use of public funds. It is advisable for whistleblowers to consult with legal professionals knowledgeable in whistleblower laws to navigate the process and ensure their rights are protected while making their disclosures. Here are a few factors to consider in forecasting what may lie ahead:

• Increased Whistleblower Protections: The expansion of the CFCA suggests a growing emphasis on combating fraud and encouraging individuals to come forward with information. Whistleblowers who expose false claims and fraudulent activities may benefit from enhanced legal protections, such as safeguards against retaliation from employers.
• Potential Rise in Whistleblower Cases: The broader application of the CFCA may lead to an increase in the number of whistleblower cases filed in Connecticut. The expanded scope of the law creates more opportunities for individuals to identify and report fraudulent claims across various sectors beyond healthcare.
• Collaboration with Whistleblower Law Firms: Whistleblowers in Connecticut may find it beneficial to engage with whistleblower law firms that focus their practice to handling False Claims Act cases like Brown, LLC. These firms can provide guidance, support, and legal experience throughout the process, ensuring that whistleblowers’ rights are protected and their claims are effectively presented.
• Intervened Connecticut False Claims Act Awards: Procedurally, if the government intervenes and settles the case the whistleblower may be entitled from anywhere from 15-25% of what the government recovers as a Connecticut’s False Claims Act whistleblower award.
• Non-Intervened Connecticut False Claims Act Awards: Procedurally, if the government does not intervene the whistleblower may be entitled from anywhere from 20-30% of what the government recovers as a Connecticut’s False Claims Act whistleblower reward.

An interesting facet of the statute is that it contemplates whistleblowers who glean information that is public, but that the state many not be aware of and if the state intervenes permits a whistleblower award of 10% of what the government recovers, and based on the plain reading of the statute, if the government doesn’t intervene there’s no 10% cap, but that is another issue that may be litigated down the road.  

There’s a lot in play when it comes to fraud against the government and Connecticut has done the right thing to broaden protections to hold fraudsters accountable for ripping the taxpayer off.  If you have information about a widespread fraud against the state of Connecticut you should discuss your concerns with a whistleblower lawyer to learn your options.