February 02,2006

Grassley’s New State False Claims Act Tools Head to President


To: Reporters and Editors
Re: False Claims Act enhancements in Deficit Reduction Act of 2005
Da: Thursday, Feb. 2, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, included two key anti-fraud
provisions in the Deficit Reduction Act that received final congressional approval on Wednesday
and is headed to the President for his consideration. The provisions were designed to address the
fraud, waste and abuse of the Medicaid program outlined last summer during a two-day hearing
before the Senate Finance Committee.

The first provision provides increased funding for states that agree to pass a State False
Claims Act, modeled after the federal False Claims Act. States will be provided an increased share
of Medicaid funds if they agree to pass a False Claims Act that contains the same provisions as the
federal version. The second provision requires any company doing more than $5 million in business
with Medicaid to provide education to employees regarding the False Claims Act. As the principal
author of the 1986 amendments to the federal False Claims Act, Sen. Chuck Grassley, chairman of
the Finance Committee, has fought long and hard to protect whistleblowers who use the False
Claims Act to help the government recover taxpayer dollars from those who defraud the government.

Sen. Grassley released the following statement regarding the False Claims Act provisions included
in the Deficit Reduction Act:

“The False Claims Act has been the federal government’s number one tool for fighting fraud,
waste and abuse for the past 20 years. The passage of the Deficit Reduction Act marks a new day for
the False Claims Act. It enhances and strengthens this valuable tool for fighting fraud and waste in
government programs. All too often taxpayer money is wasted or lost to fraud. This fraud threatens
the sustainability of government programs. Over the past 20 years, I’ve seen whistleblowers use the
False Claims Act to recover more than $17 billion in tax dollars. With these new provisions, the
False Claims Act is evolving to help fight fraud, waste and abuse for another 20 years and beyond.”