On June 26, 2023, Connecticut Governor Ned Lamont signed into law Public Act 23-129: “An Act Concerning Liability for False and Fraudulent Claims” (the Act). The Act expands application of Connecticut’s False Claims Act (CFCA) to all claims for money or property to the state of Connecticut (except as expressly provided in the CFCA) and accordingly expands the scope of conduct covered by the CFCA. The Act does so by removing the current limitation on the CFCA’s applicability to only state-administered health or human services programs. The Act took effect July 1, 2023.
Currently, among other things, the CFCA makes it unlawful to knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval under a state-administered health or human services program. A state-administered health or human services program is any program administered by: the Department of Children and Families; the Department of Developmental Services; the Department of Mental Health and Addiction Services; the Department of Public Health; the Department of Aging and Disability Services; the Department of Social Services ; the Office of Early Childhood; the Office of the State Comptroller for the State Employee and Retiree Health programs and health care programs administered by the Office of the State Comptroller; and the Department of Administrative Services for Workers’ Compensation medical claims. The CFCA has thus been limited to only claims that arise under those programs, such as claims submitted to the Department of Social Services under the state Medicaid program.
The Act removes references to state-administered health or human services programs in the text of the CFCA (including by deleting the definition thereof) in order to expand the scope of conduct covered by the CFCA. As a result of the Act, it is now unlawful under the CFCA to, among other things, knowingly (i) present, or cause to be presented, a false or fraudulent claim for payment or approval by the State of Connecticut, or any agency, department, or quasi-public agency of the State of Connecticut, or (ii) make, use, or cause to be made or used a false record or statement material to a false or fraudulent claim. The Act maintains the current definition of claim which applies to requests or demands for payment or property (i) presented to an officer, employee, or agent of the state, or (ii) made to a recipient of state funds if the payment or property is to be spent or used on the state’s behalf or to advance a state program or interest (or reimbursed by the state), but which does not include compensation for state employees or unrestricted income subsidies paid to individuals.
The Act also adds a provision to the CFCA which provides that the CFCA does not apply to any claims, records, or statements made under tax laws administered by the state (or any political subdivision of the state), which mirrors a similar carveout for tax matters from the federal False Claims Act on which the CFCA is modeled. Finally, the Act includes a prohibition on the state asserting a counterclaim, set-off, or defense based on an alleged CFCA violation where the state is a defendant in a civil action, arbitration, or other civil proceeding, and removes the costs of CFCA investigations as a liability imposed on CFCA violators under the statute.
While the general intent of the Act is to expand the CFCA’s application beyond state agencies related to health care, health care organizations should be aware of the changes and the continued applicability to claims for reimbursement for services to state health care programs and new broader application to all payment claims to the state. All state contractors and participants in state grant programs and other initiatives involving state money or property should also be aware that this expansion of the CFCA may result in additional scrutiny of claims made thereunder, including exposure to investigation by the Connecticut Attorney General and/or whistleblower suits.