Pre-Suit FCA Resolution: When Settlement Closes the Matter Before It Opens

Pennsylvania is among a handful of US states without a state-level False Claims Act framework. For healthcare providers, government contractors, and other entities operating in Pennsylvania, this absence reshapes the FCA exposure landscape. Federal FCA enforcement under 31 U.S.C. § 3729 et seq. proceeds without parallel state-level claims, producing a distinctive single-track enforcement framework that differs operationally from the dual federal-state regime prevailing in most of the country.

This piece addresses the operational consequences of Pennsylvania's position, the legislative history that has produced and sustained the absence of a state FCA, and the implications for defense counsel handling matters in Pennsylvania and similar jurisdictions. The analysis draws on the firm's federal FCA practice in Pennsylvania and the broader landscape of states without parallel state FCAs.

Pennsylvania's Position

Pennsylvania has not enacted a comprehensive state False Claims Act despite multiple legislative attempts over the past two decades. The proposed legislation has typically followed the federal model with state-specific modifications, but no version has progressed through both chambers to enactment. The result is that federal FCA enforcement is the operative framework for Pennsylvania healthcare fraud, federal contractor fraud, and similar matters involving false claims to the federal government.

The legislative landscape has produced periodic discussion of state FCA enactment, particularly around the Deficit Reduction Act of 2005's 10% bonus federal Medicaid share for states with qualifying Medicaid FCAs. Pennsylvania has remained outside this framework, declining the additional federal funds that a state Medicaid FCA would generate. The policy reasons for this position vary across legislative sessions, but the operational consequence is consistent: Pennsylvania entities face federal FCA exposure without parallel state Medicaid FCA enforcement.

Operational Consequences

The absence of a state FCA in Pennsylvania produces three operational consequences that shape defense practice.

Single-Track Enforcement

FCA enforcement against Pennsylvania entities operates exclusively through the federal framework. The U.S. Attorney's Office for the relevant federal district (typically the Eastern, Middle, or Western District of Pennsylvania) is the primary prosecuting authority. The Pennsylvania Office of Attorney General does not pursue parallel state FCA claims because no state FCA exists to support them. This single-track structure means that resolution with the U.S. Attorney's Office closes the matter without the need for parallel state-level negotiation, which simplifies the procedural posture compared to dual-jurisdiction states.

Federal Court Jurisdiction

FCA matters in Pennsylvania are filed in federal district court under federal qui tam procedure. Sealed complaints proceed through the federal seal process, government intervention decisions occur under federal procedure, and contested litigation proceeds under federal rules. The absence of a state FCA also means there is no parallel state forum where dismissed federal claims could be refiled, which reduces certain procedural risks present in dual-jurisdiction states.

Settlement Frameworks

Settlement of FCA matters in Pennsylvania proceeds entirely under federal frameworks. Treble damages, civil penalties, and Medicare or Medicaid debarment considerations all operate under federal authority without parallel state-level frameworks producing additional exposure. This concentration of enforcement authority in the federal system makes settlement negotiations more streamlined than in states with parallel state FCA frameworks, where the defendant must reach resolution with both federal and state authorities to close the matter fully.

Other States Without State FCAs

Pennsylvania is not unique. Several other states operate without comprehensive state False Claims Acts, producing similar single-track federal enforcement frameworks. The list of states without state FCAs as of 2024 includes (in addition to Pennsylvania):

• Alabama. No state FCA; federal enforcement is the sole path for federal healthcare and contractor fraud matters.
• Mississippi. No comprehensive state FCA, though limited Medicaid fraud provisions exist outside the federal FCA framework.
• South Dakota. No state FCA; federal enforcement applies exclusively.
• West Virginia. No comprehensive state FCA; some state-level healthcare fraud provisions exist outside the federal FCA framework.
• Wyoming. No state FCA; federal enforcement applies exclusively.

In each of these states, federal FCA enforcement under 31 U.S.C. § 3729 et seq. is the controlling framework. Defense counsel handling FCA matters in these jurisdictions should expect single-track federal enforcement and structure the case accordingly.

Strategic Implications

For defense counsel handling FCA matters in Pennsylvania and similar single-track jurisdictions, several strategic implications follow from the absence of a state FCA. The single-track framework concentrates engagement on a single prosecuting authority, simplifies settlement architecture, and reduces the procedural complexity of parallel federal-state defense work. It also concentrates exposure, because the federal framework's treble damages, civil penalties, and program participation consequences all operate without state-level moderating factors.

Looking Forward

Pennsylvania's position outside the state FCA framework will likely persist for the foreseeable future. Legislative efforts to enact a Pennsylvania state FCA have continued without success across multiple sessions, and the policy considerations that have prevented enactment to date remain in place. For defense counsel handling Pennsylvania FCA matters, the federal-only enforcement framework will continue to be the operative reality. Future issues of False Claims Act Updates will track legislative developments in Pennsylvania and other single-track jurisdictions, as well as the federal enforcement patterns that emerge in these states.