Although the majority of states have enacted a state False Claims Act to recover money fraudulently obtained by defendants from state funds, 17 states have not. States without a False Claims Act may miss out on large recoveries secured under federal False Claims Act prosecutions. Nonetheless, whistleblowers in states without a False Claims Act may still be able to bring an action under the federal False Claims Act for false claims made to the federal government.
Many of the states without a state False Claims Act are currently considering proposals to enact whistleblower laws modeled after the federal False Claims Act.
States have a growing financial incentive to enact whistleblower laws: under provisions of the Deficit Reduction Act of 2005, a state with a False Claims Act consistent with federal False Claims Act provisions concerning liability, penalties, procedures, and whistleblower rewards become eligible for a 10 percent increase in their share of recoveries reached in federal and multi-state False Claims Act settlements and judgments.
Since amending the federal False Claims Act in 1986 to strengthen whistleblower protections, the federal government has recovered over $30 billion. In 2011 alone, the federal government recovered over $3 billion in False Claims Act settlements and judgments, the majority of which related to health care fraud.