False Claims Act Year in Review: 2025 trends and what’s ahead in 2026

Fiscal year (FY) 2025 was a consequential enforcement year for the False Claims Act (FCA), according to a recent United States Department of Justice (DOJ) release. Settlements and judgments exceeded $6.8 billion, more than doubling FY 2024 and surpassing the prior record set in 2021. Healthcare and life sciences dominated enforcement, accounting for approximately $5.7 billion (83 percent) of total recoveries. This was largely driven by unprecedented trial outcomes in declined cases and sustained scrutiny of Medicare Advantage, prescription drugs, and medical necessity and quality of care matters. 

A defining feature of FY 2025 was the outsized role of declined qui tam litigation (cases brought by private plaintiffs in the name of the US in which DOJ has declined to intervene). More than one-third of total recoveries – nearly $2.3 billion – originated from cases DOJ declined to pursue, signaling a well-resourced relator bar (the plaintiffs’ attorneys and firms that specialize in bringing qui tam cases) increasingly capable of litigating complex matters to resolution without DOJ intervention.

The enforcement pipeline also reached historic highs. The government and relators filed record numbers of new FCA matters (1,698), while DOJ opened a historically high volume of non-qui tam investigations. These figures (shown in the table below) underscore the dual engines driving modern FCA enforcement: an increasingly sophisticated relator bar and DOJ’s expanding reliance on data driven, self initiated investigations.

Beyond healthcare, DOJ continued to prioritize cybersecurity compliance under the Civil Cyber-Fraud Initiative (CCFI), recovering approximately $52 million across nine settlements. Trade and customs-related violations also accelerated, including the largest customs-related FCA settlement to date, alongside additional misclassification and country-of-origin cases and matters crediting voluntary self-disclosure.

Courts and agencies further reshaped the legal landscape heading into 2026. Constitutional challenges to the FCA’s qui tam provisions took center stage with a briefing and argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC in the Eleventh Circuit, which found the relator provisions of the FCA unconstitutional at the district court level. Meanwhile, other circuits – including the Sixth Circuit in In re TriHealth, Inc., et al. – reaffirmed precedent upholding the statute, suggesting Supreme Court review may be likely. At the same time, interagency coordination accelerated. DOJ and the US Department of Health and Human Services (HHS) relaunched the DOJ–HHS FCA Working Group in July 2025, aligning health care enforcement priorities and institutionalizing analytics-driven referrals. In January 2026, DOJ announced a new Division for National Fraud Enforcement to coordinate cross program fraud efforts and expand analytics-led case generation.

Taken together, these record recoveries, unprecedented filing activity, expanding enforcement theories, and structural agency reforms could signal sustained, aggressive FCA enforcement throughout 2026.

Why the numbers matter

The headline recovery figure, $6.8 billion in damages and monetary penalties, reflects the significant impact of large judgments, particularly in healthcare and in DOJ-declined cases, while underscoring the growing litigation capacity of relators and the relators’ bar supported by litigation financing and sophisticated data analytics. The substantial share of recoveries from declined cases marks a departure from historical norms and may signal increasing judicial willingness to resolve complex FCA theories at scale without DOJ intervention, as well as juries’ receptiveness to claims of fraud that DOJ might have viewed as less-than-compelling. While many of these judgments remain on appeal, the near-term enforcement trajectory largely remains clear.

Record filing volume and DOJ-initiated investigations demonstrate the Trump Administration’s continued use of the FCA to advance policy priorities, especially in healthcare. DOJ’s expanding lead generation footprint, driven by interagency analytics, whistleblower initiatives, and stated enforcement priorities in cybersecurity and trade, suggests that the FY 2025 pipeline could continue to produce high dollar resolutions and more data-driven, relator-initiated actions.

Cybersecurity enforcement underscores that representations regarding compliance with federal requirements are material, even absent a breach, heightening risk for contractors and health-data custodians. Customs and tariff actions – anchored by the Ninth Circuit’s confirmation in Island Industries, Inc. v. Sigma Corporation that customs qui tams may proceed in district courts, not just the Court of International Trade, alongside recent settlements – could spur increased competitor and insider-filed cases in 2026. Parallel efforts to test the statute’s outer bounds, including tying federal funding to anti‑discrimination compliance certifications, could foreshadow litigation over materiality and scienter in matters related to diversity, equity, and inclusion (DEI).

Finally, renewed interagency coordination and the creation of a national fraud division indicate sustained institutional capacity for analytics-led case generation, including related to federally funded programs administered at the state and local level. Combined with active constitutional challenges and circuit engagement, these dynamics may shape how aggressively theories are pled, how materiality is litigated, and how cooperation credit is evaluated – factors that could directly influence resolution strategy and risk in 2026.

Metric	FY 2025 figure	Context
Total FCA recoveries	~$6.8 billion	Highest annual total on record; more than double that of FY 2024 and higher than the prior record (2021)
Healthcare recoveries	~$5.7 billion (~83 percent)	Sector dominated FY 2025 recoveries, with the total driven by multiple large judgments
Total new FCA matters	1,698	All-time high, nearly 300 above FY 2024
Qui tam filings	1,297	Record relator-led filings; +32 percent over FY 2024
DOJ-initiated matters	401	Continued multi-year rise tied to DOJ’s data-driven, self-initiated investigations
Share of recoveries from declined cases	>33 percent (~$2.3 billion)	Outsized impact of relator-led, declined judgments; several on appeal
Qui tam recoveries	~$5.3 billion (~78 percent)	Nearly four-fifths of total recoveries arose from qui tam actions
Record customs settlement	$54.4 million (Ceratizit)	Largest customs-related FCA settlement to date; signals trade/tariff focus

Sector hotspots and case themes

Healthcare and life sciences

Healthcare enforcement largely dominated FCA recoveries, revealing three priorities for DOJ: Medicare Advantage (risk-adjustment integrity and broker steering), prescription drugs (marketing/dispensing), and medically unnecessary or substandard care. This year’s totals were amplified by large judgments, some in declined cases, while DOJ signaled stricter Medicare Advantage data-integrity expectations and continued attention to quality-of-care failures.

Illustrative matters

• Managed care and risk adjustment: Significant resolutions addressing unsupported diagnoses, retrospective chart reviews, and condition-specific coding (including a $98 million recovery for allegedly invalid Medicate Advantage diagnoses and a more than $60 million recovery tied to false spinal-condition coding). These developments continued into early FY 2026, with DOJ recently announcing that Kaiser Permanente affiliates agreed to pay $556 million to resolve Medicare Advantage-related allegations, underscoring sustained scrutiny of coding accuracy, audit responsiveness, and documentation integrity.


• Broker steering theories: In United States of America, ex rel. Andrew Shea v. eHealth, Inc., et al. (D. Mass.), DOJ alleges that insurers funneled “marketing,” “co-op,” and “sponsorship” payments, and other administrative fees to large brokers to steer beneficiaries and chill enrollment of certain populations. The District of Massachusetts heard oral argument on a motion to dismiss the complaint in late January 2026, with a decision expected in the next few months.


• Prescription drugs: Two cases accounted for approximately $2.5 billion, including a $949 million judgment against a long-term care pharmacy for dispensing drugs without valid prescriptions and an off-label promotion verdict, in a case the government declined, exceeding $1.6 billion (now on appeal).


• Medical necessity/quality: DOJ achieved a $45 million settlement with a wound-care practice involving unnecessary surgical debridement with additional nursing-home/post-acute actions focused on patient safety and program integrity.

Policy and organizational updates

The DOJ–HHS FCA Working Group, relaunched in July 2025, prioritized Medicare Advantage risk scoring, pricing, network adequacy, kickbacks, defective devices, and electronic health record (EHR) manipulation, leveraging HHS analytics and Office of Inspector General (OIG) reporting to accelerate referrals across the Centers for Medicare and Medicaid Services (CMS), HHS–OIG, the US Food and Drug Administration (FDA), and the Federal Bureau of Investigation (FBI).

Looking ahead to FY 2026

• Scrutiny of pharmaceutical, device, and diagnostic contracting and pricing, including price reporting, as well as discount and rebate structures, will likely continue.


• Anticipate increased focus on clinical decision support and AI-assisted coding. Regulators will ask how models were validated, governed, and monitored and whether outputs materially influenced claims.


• Cybersecurity representations in health IT and connected devices will remain in scope, including vulnerability management and third-party risk for systems handling protected health information (PHI) tied to federal programs.


• Clinical-trial and real-world evidence data integrity issues may migrate into FCA theories where study data underpins coverage, label expansions, or coding.

Government procurement and grants

Federal procurement and grants enforcement remained a core FCA priority in FY 2025, centered on defective pricing and Truth in Negotiations Act (TINA) exposure, false cost or pricing data, mischarging or overbilling, product substitution, Buy American Act (BAA) and Trade Agreements Act (TAA) noncompliance, kickbacks, and Procurement Integrity Act (PIA) violations. Such priority highlights increasing overlap with customs, trade, and cybersecurity enforcement.

Illustrative matters

• Pricing/cost data: A $428 million defense sector resolution for allegedly false cost and pricing data and double billing – among the largest procurement recoveries on record – underscored intensified scrutiny of pricing practices in weapons systems and sustainment contracts.


• Competition integrity: The Procurement Collusion Strike Force (a DOJ Antitrust Division-led interagency partnership focusing on fraud and collusion in government procurement) expanded training and enforcement activity – including tens of thousands trained, nearly 200 investigations, more than 75 convictions, and more than $70 million in penalties – signaling sustained cartel and bid-rigging risk and growing reliance on data analytics to identify pricing anomalies.


• Charging accuracy: DOJ and Inspectors General (IGs) continued to pursue cases involving cross-contract cost shifting, billing for undelivered work, and the use of inferior or non-compliant components, reinforcing exposure at the negotiation and performance stages.

Policy and organizational updates

The DOJ Criminal Division’s March 2025 corporate enforcement and whistleblower program updates explicitly highlighted fraud involving federal programs and trade, tariff, and customs offenses. Agencies also signaled tighter preference-program oversight (small-business eligibility and pass-through risks), foreshadowing heightened scrutiny of eligibility certifications, subcontracting structures, and performance allocations.

Looking ahead to FY 2026

• Anticipate a potential increase in audits and investigations of TINA/defective pricing exposure, with emphasis on current, accurate, and complete cost or pricing data and documented bases of award, as inflation and price-adjustment practices remain under scrutiny.


• Expect potentially heightened scrutiny of small-business eligibility (e.g., set-asides, pass-throughs, ostensible subcontractor issues) and preference-program representations, including size/status protests that may feed FCA theories.


• AI will feature on both sides: agencies’ analytics to flag pricing and bidding anomalies, as well as contractor risks where generative tools are used to draft proposals, justifications, or certifications without validation, creating potential misrepresentation exposure.


• Proactive supply-chain diligence and accurate security attestations will likely be central to procurement-related risk mitigation in 2026.


• Based on a January 2026 Executive Order focused on defense industry contractor performance, defense contractors providing “critical weapons, supplies, and equipment” can expect increased scrutiny on compliance with production requirements and new contract terms related to stock buy-backs, corporate distributions, and executive compensation, which could translate into FCA-related enforcement risks.

Cybersecurity (Civil Cyber-Fraud Initiative)

The CCFI moved from pilot to sustained enforcement in FY 2025, with approximately $52 million recovered across nine cybersecurity related FCA settlements – more than tripling the prior year’s total and confirming cybersecurity as a durable enforcement lane alongside healthcare and procurement. DOJ pressed false attestation and product-security theories as material even absent a breach, spanning defense, health, and state-funded implementations that carry federal requirements.

Illustrative matters

• Defense procurement gaps: DOJ announced a $4.6 million settlement with a defense contractor premised on failures to implement National Institute of Standards and Technology (NIST) Special Publication (SP) 800‑171 controls (a set of security requirements for protecting sensitive but unclassified federal information), non-compliance with Defense Federal Acquisition Regulation Supplement (DFARS), lack of required Federal Risk and Authorization Management Program (FedRAMP) documentation, and inadequate oversight of a third‑party provider.


• Federal health benefits contract: DOJ obtained an $11.2 million settlement with a military health benefits administrator for falsely certifying compliance with required cybersecurity controls, underscoring that cyber attestations tied to payment are material even absent a breach.


• Product cybersecurity: A biotechnology company paid a $9.8 million settlement to resolve claims over genomic sequencers allegedly sold with software vulnerabilities, inadequate product‑security programs, and false representations of compliance with International Organization for Standardization (ISO) and NIST standards – an expansion of CCFI into product‑level security.


• Research and academic institutions: DOJ announced an $875,000 settlement with an academic research entity that allegedly failed to implement required anti‑virus/anti‑malware tools under NIST SP 800‑171, failed to timely implement a System Security Plan under DFARS 252.204‑7012, and submitted an inflated DFARS 7019/7020 Supplier Performance Risk System (SPRS) assessment score. The case settled while a motion to dismiss was pending.


• Individual indictment: In December 2025, a grand jury indicted a former senior manager of a government contractor for major government fraud, wire fraud, and obstruction related to alleged misrepresentations about a cloud platform’s security (including FedRAMP non-compliance), illustrating that technical cyber misstatements can migrate into criminal theories alongside civil FCA risk.

Policy and organizational updates

DOJ continued mainstreaming CCFI with broader procurement and health-fraud priorities. Practically, that included a heightened emphasis on system-specific evidence behind NIST SP 800-171 scoring, DFARS 252.204-7019/-7020 submissions, and FedRAMP equivalency where cloud services touch covered data. It also meant that cooperation and voluntary self-disclosure drove materially better settlement outcomes, while failures in subcontractor oversight or inherited weaknesses in merger and acquisition (M&A) settings drew sharper scrutiny. At the same time, rapid AI adoption is widening the gap between “paper compliance” and operational reality: opaque model behaviors, automated code, and uncontrolled data flows can conflict with NIST SP 800-171 and DFARS/Federal Acquisition Regulation (FAR) clauses.

Organizationally, DOJ reinforced coordination between Civil Fraud, National Security Division, HHS–OIG, and agency acquisition offices. It also expanded analytics support to validate self-reported scores against artifacts (e.g., System Security Plans (SSPs), Plans of Action and Milestones (POA&M), cloud attestations) and to compare contractor claims across portfolios. The visible through-line is consistent: DOJ does not need a data breach to bring an FCA case; false or inflated cybersecurity representations and attestations tied to payment or award decisions may be enough.

Looking ahead to FY 2026

• Accuracy and granularity in DFARS/NIST scoring will be tested. Expect focused demands for the artifacts beneath Supplier Performance Risk System scores (e.g., system-specific SSPs, POA&Ms with defensible dates, boundary diagrams, inheritance rationales) and enforcement where scores outpace reality.


• Expect scrutiny of automated code generation, agentic workflows, and uncontrolled data flows that quietly create gaps contradicting NIST SP 800-171 and DFARS/FAR clauses – and of AI-generated documentation or self-assessments that inflate CMMC-relevant claims.


• Product-level scrutiny will remain in scope, with attention to vulnerability management, software bill-of-materials practices, and how security claims are presented to the government.


• Consider successor and investor exposure. M&A safe-harbor principles are only beneficial when diligence, voluntary self-disclosure, and remediation are timely; expect a potential increase in cases naming successors and, where facts support, investors with operational touchpoints.

Customs, tariffs, and trade fraud

DOJ’s cross-agency Trade Fraud Task Force, launched August 2025, accelerated coordinated civil-criminal actions focused on tariff evasion. Enforcement centered on misclassification, undervaluation, and false origin to evade duties, such as antidumping and countervailing duties (AD/CVD) and Section 301 duties (tariffs imposed under Section 301 of the Trade Act of 1974 in response to unfair foreign trade practices).

Illustrative matters

• Task force launch and hybrid enforcement: In August, DOJ and Department of Homeland Security (DHS) announced a cross‑agency Trade Fraud Task Force to pursue tariff and duty evasion using the FCA, Tariff Act penalties, and criminal smuggling/false‑statement statutes, signaling parallel civil–criminal exposure and coordination with Customs and Border Protection (CBP)/Homeland Security Investigations (HSI) on enforcement focus and seizures. The Task Force followed months of DOJ statements elevating “trade and customs fraud, including tariff evasion” as a top priority and expanding the Corporate Whistleblower Awards Pilot Program to cover customs fraud.


• Largest customs-fraud settlement in FCA history: A $54.4 million settlement resolved allegations that an importer avoided Section 301 duties on Chinese-manufactured tungsten carbide by 1) transshipping goods through Taiwan and falsely declaring Taiwan as the country of origin, 2) misclassifying products under the Harmonized Tariff Schedule to reduce or eliminate duty liability, and 3) distributing unmarked merchandise without paying required marking duties. The relator, who filed a 2022 qui tam action in the Eastern District of Michigan, will receive approximately $9.75 million. The settlement agreement characterized roughly half of the recovery as restitution and expressly preserved potential criminal exposure, reflecting DOJ’s integrated use of FCA remedies alongside traditional trade statutes and underscoring the growing role of whistleblowers and competitor relators in supply chain enforcement.


• CBP actions: CBP reported dramatic increases in duty, tax, fee collections and trade enforcement outcomes, including multibillion‑dollar revenue impacts tied to entry summary reviews and rising audit recoveries, while expanding staffing and analytics to focus on misclassification, undervaluation, and origin misstatements at scale.

Illustrative 2025 customs/trade FCA matters	Allegation theme	Amount	Notes
Ceratizit USA LLC	Origin misstatements, Harmonized Tariff Schedule (HTS) misclassification, and marking duties	$54.4 million	Largest customs FCA settlement to date
Allied Stone, Inc.	Misclassification of goods imported from China to avoid duties	$12.4 million	Signals breadth of Section 301 enforcement
Evolutions Flooring, Inc.	False origin/type declarations to evade duties	$8.1 million	Further growth in tariff-evasion cases
MGI International (resins)	Unpaid duties and voluntary self-disclosure and cooperation	$6.8 million	Civil resolution credited voluntary self-disclosure/cooperation

Policy and organizational updates

DOJ elevated trade and customs fraud – especially tariff evasion – to a top enforcement priority, updating Criminal Division’s focus and whistleblower incentives, while the Civil Division emphasized the FCA for duty-evasion cases (allowing the government to recover when a defendant knowingly conceals or avoids an obligation to pay money to the government). The White House issued Executive Orders imposing additional tariffs pursuant to the International Emergency Economic Powers Act (IEEPA) (including the “reciprocal” tariffs assessed against products of nearly all countries), which CBP rapidly operationalized amid expanded audits, post-summary reviews, and penalties focused on classification, valuation, country of origin, and transshipment risks – with referrals to DOJ in egregious cases.

Organizationally, the DOJ–DHS Trade Fraud Task Force formalized whole-of-government coordination among DOJ Civil and Criminal Divisions, CBP, and HSI to pursue parallel civil-criminal remedies (e.g., seizures, Title 18 criminal offenses (the principal federal criminal code), FCA treble damages, and Tariff Act penalties). CBP’s guidance and statistics signaled a broader pivot to tariffs as economic-security tools and warned that willful customs violations may face sanctions-like treatment, alongside rising whistleblower, competitor, and relator activity.

Looking ahead to FY 2026

• Expect reciprocal tariffs litigation and policy continuity. Monitor for ongoing Executive Order modifications, as importers must comply as implemented by CBP.


• Anticipate a potential increase in FCA customs cases and relator activity. With heightened publicity and large duty stakes, expect potential growth in qui tam filings alleging reverse false claims (claims that a defendant knowingly avoided an obligation to pay money owed to the government); interventions and settlements are likely to rise.


• Expect data analytics and third-party risk. CBP will scale anomaly detection across HTS codes, values, and origin flows; importers are encouraged to shore up broker oversight, supplier origin substantiation, and transfer-pricing alignment to withstand audit and post-summary review.

Pandemic-program integrity

Nearly five years after the onset of COVID-19, DOJ reported more than 200 FCA settlements and judgments totaling more than $230 million related to pandemic relief programs in FY 2025. They reflect a persistent “long tail” of enforcement focused on Paycheck Protection Program (PPP) eligibility and forgiveness, Economic Injury Disaster Loan (EIDL) loans, and COVID-related healthcare billing schemes, bringing cumulative civil recoveries for pandemic-related fraud to more than $800 million.

Illustrative matters

• US Government Accountability Office (GAO) Report: In 2025, the GAO reported that hundreds of billions of dollars were disbursed in potentially fraudulent payments. In response, the Trump Administration is taking efforts to improve oversight of fraud in government lending, including introducing the “COVID Fraud Transparency Act of 2025” in Congress.


• PPP settlement: A private liberal arts college agreed to pay $8.39 million to resolve allegations that it violated the FCA by falsely certifying its eligibility for a PPP loan. The college admitted that it was ineligible for the $6.6 million PPP loan in spring 2020 because its workforce exceeded the 500-employee limit. The college employed more than 800 individuals at the time, but counted part-time employees as only one-third of an employee on its application.


• Medical provider relief programs: A North Texas physician agreed to pay $3.5 million to resolve allegations that he violated the FCA by knowingly submitting or causing the submission of false claims to the Health Resources & Services Administration’s COVID-19 Uninsured Program. DOJ alleged that the physician, in conjunction with and at the direction of the management company of the medical clinic he owned, submitted or caused the submission of approximately 400,000 claims that were eligible for lower reimbursement than the claimed evaluation and management services.

Policy and organizational updates

These efforts maintain a steady civil pipeline consistent with the “long tail” described above, even as average case sizes remain modest relative to larger-scale healthcare or procurement matters.

Looking ahead to FY 2026

• Expect COVID-19-related FCA exposure to persist, as Congress enacted a federal law in 2022 extending the statute of limitations to ten years for civil and criminal enforcement for PPP and EIDL loan fraud.


• Expect continued audits testing eligible-use attestations (i.e., wages, salaries, benefits), instrument terms, and compliance with Payroll Support Program (PSP) agreements.


• Follow-up inquiries may persist where PSP tax treatment was misapplied or inconsistently reported, given IRS’s 2025 FAQ clarifications.

Litigation and doctrine developments

AKS causation: “Resulting from” requires “but-for” in key circuits

In United States v. Regeneron Pharmaceuticals, Inc., the First Circuit held that the 2010 amendment to the Anti-Kickback Statute (AKS), which renders claims “resulting from” kickbacks false under the FCA, requires proof of actual but-for causation (meaning the claim would not have been submitted absent the alleged kickback). In other words, the alleged remuneration must be a but-for cause of the submitted claim. Aligning with the Sixth and Eighth Circuits and rejecting the Third Circuit’s more permissive “causal link” approach, the court grounded its analysis in Supreme Court precedent interpreting similar causation language.

Circuits and AKS “resulting from” causation standard (as of now)

Circuit	Causation standard
First	But-for causation required
Sixth	But-for causation required
Eighth	But-for causation required
Third	Causal-link/exposure approach

Only four circuits have squarely addressed this to date.

Regeneron arose from DOJ’s allegation that the manufacturer steered utilization of its buy-and-bill drug (a distribution model in which providers purchase drugs, administer them to patients, and then bill insurers for reimbursement), Eylea, by routing tens of millions of dollars in donations to a copay-assistance foundation covering Medicare Part B cost-sharing for wet age-related macular degeneration (wet-AMD) patients. On interlocutory appeal from the District of Massachusetts, the First Circuit held that, to transform an AKS violation into FCA falsity under the 2010 amendment, the government must show that – absent the unlawful remuneration – the provider would not have furnished the item or service and submitted the claim. The court rejected DOJ’s proposed “exposed-to-an-inducement” test as divorced from statutory text and common-law causation principles.

At the same time, the First Circuit emphasized that the AKS amendment is not the exclusive path to FCA liability in kickback cases. Proceeding on a separate “false-certification” track, the government or a relator may plead and prove falsity by showing material misrepresentations of AKS compliance in enrollment forms or claims submissions. That track does not require but-for causation to establish falsity, although plaintiffs must still prove proximate causation to recover damages. In the wake of Regeneron, the district court permitted DOJ to pivot and pursue an alternative false-certification theory and reopened discovery on a limited basis. Some defendants, for their part, have pressed the view that Congress’s 2010 FCA amendment was intended to channel AKS-premised theories of liability through the “resulting from” pathway and to foreclose reliance on implied or express false-certification for kickbacks. Courts have largely treated the two pathways as distinct, but challenges to the continued availability and scope of false-certification in AKS cases have increased and will likely continue to be the subject of motion practice.

The practical consequences are significant. In AKS-amendment cases, courts are likely to scrutinize evidence linking remuneration to specific utilization and claims – such as physician level prescribing shifts, contemporaneous business analyses tying payments to volume, or patient level evidence showing that assistance altered treatment decisions. Defendants, in turn, may pursue venue and transfer strategies favoring but-for jurisdictions, refine summary judgment records on causation, and propose jury instructions that isolate causation and disaggregate untainted claims. Given the deepening circuit split, petitions seeking Supreme Court review are likely.

Public disclosure bar and interlocutory appeals

In Fiorisce v. Colorado Technical University, the Tenth Circuit held that denials of public disclosure bar motions (the FCA provision that may bar qui tam provisions based on publicly available information) are not immediately appealable under the collateral order doctrine (a narrow exception permitting immediate appeal of certain non-final orders that conclusively determine a disputed question separate from the merits), potentially curtailing a defense-side pathway to early appellate review. This ruling will likely influence defense strategies around staging dispositive motions and preserving issues for post-judgment appeal.

Constitutional challenges to qui tam cases

Article II challenges (concerning the constitutional separation of powers and executive authority) to the FCA’s qui tam mechanism moved to the forefront in 2025, catalyzed by the Middle District of Florida’s decision in United States ex rel. Zafirov v. Florida Medical Associates, LLC, which held the FCA’s relator provisions unconstitutional under the Appointments Clause. The ruling set the stage for the Eleventh Circuit’s closely watched December 2025 argument, during which the panel pressed advocates on whether relators exercise “significant authority” and occupy a “continuing position” under the Supreme Court’s Lucia framework (which addresses when individuals exercise sufficient governmental authority to require appointment under the constitution), and whether historical practice adequately resolves constitutional concerns raised by members of the Court.

A central issue at argument was whether a relator’s unilateral act of filing a sealed complaint constitutes “significant executive authority,” given that the filing compels a government investigation and may initiate years of litigation in declined cases. DOJ emphasized the extensive controls retained by the Executive Branch, including intervention authority, dismissal and settlement vetoes, discovery stays, and ongoing supervisory powers. Defendants and amici countered that initiation of enforcement by private litigants consumes government resources and exposes defendants to treble damages (three times the amount of actual damages, as provided under the FCA) and penalties without constitutionally appointed officers directing the litigation.

The panel further considered whether it could reach Take Care Clause and Vesting Clause issues not decided by the district court. Commentators underscored the stakes: Given that most qui tam cases proceed without DOJ intervention, the “significant authority” inquiry could determine the constitutional footing of a broad swath of FCA litigation.

Briefing and amicus participation reflect a deep historical debate. DOJ and supporting amici rely on Vermont Agency of Natural Resources v. United States ex rel. Stevens and founding-era informer statutes to argue that relators act as partial assignees of the government’s claim subject to robust executive control. Opponents respond that the modern FCA departs materially from historical analogues by authorizing relators to initiate enforcement seeking punitive civil penalties, rendering the scheme incompatible with Article II.

The ripple effects extend beyond the Eleventh Circuit. District courts in several jurisdictions have rejected similar challenges post-Polansky, while the Third Circuit is poised to consider related arguments in an appeal of a $1.6 billion declined case judgment. Meanwhile, in In re TriHealth, Inc., the Sixth Circuit denied interlocutory review and reaffirmed that binding circuit precedent forecloses Article II challenges absent an en banc or Supreme Court action – ensuring the continuation of qui tam litigation in that circuit while preserving constitutional arguments for higher review.

Looking ahead to FY 2026

An affirmance or reversal in Zafirov could either align the Eleventh Circuit with existing precedent or create a direct split, potentially ensuring Supreme Court review. Concurrent developments in the Third and Sixth Circuits reinforce the circuit-by-circuit dynamics likely to shape forum selection, intervention strategy, and appellate timing in 2026.

Policy, organization, and interagency coordination

DOJ policy updates reaffirmed that timely self-disclosure, robust cooperation, and concrete remediation can yield meaningful credit, including declinations in some cases or reduced multipliers on fines and monetary penalties, faster resolutions, and fewer monitorships. They could also provide clearer pathways to favorable outcomes where companies surface and address misconduct promptly. The Criminal Division’s updated Corporate Enforcement and Voluntary Self-Disclosure Policy, issued in March 2025, underscores that companies receiving full credit must voluntarily self-disclose original information, fully cooperate, and implement timely, appropriate remediation. When those conditions are met and no aggravating factors are present, there is a presumption that the Criminal Division will issue a declination with disgorgement. Even where a disclosure falls short of the technical self-disclosure requirements or aggravating circumstances exist, DOJ may still extend substantial benefits in corporate resolutions – including offering Non-Prosecution Agreements (NPAs), reduced penalty ranges, shorter terms, and no monitorship – so long as the company acted in good faith, cooperated fully, and remediated effectively.

As discussed above, DOJ and HHS formally relaunched the DOJ–HHS FCA Working Group on July 2, 2025, reinstating a high level, standing forum designed to accelerate healthcare fraud enforcement by aligning HHS program operators and DOJ Civil leadership on priorities, referrals, and case strategy. The Working Group identified six priority lanes: Medicare Advantage (including risk score integrity); drug, device, and biologics pricing; network adequacy and patient access; kickbacks; materially defective devices; and manipulation of EHR systems. The Group also committed to leveraging enhanced HHS data mining and OIG reporting to generate leads, expedite investigations, and coordinate payment suspensions or dismissal of qui tam suits where appropriate.

The Working Group is expected to harmonize priorities, expand data fusion capabilities, and translate Working Group initiatives into a greater volume of agency-initiated, analytics-led cases in 2026. Healthcare and life-sciences stakeholders are encouraged to calibrate Medicare Advantage coding and network-adequacy controls, pressure test pricing and rebate arrangements, validate EHR configurations, and maintain ready pathways for prompt disclosure and remediation.

Other focus areas to watch in 2026

Civil rights and DEI-linked FCA theories

Executive and DOJ policy initiatives in 2025 signaled an intent to deploy the FCA to enforce compliance with federal anti-discrimination requirements, including in higher education and other federally funded sectors, through certification-based theories that make compliance “material” to payment and thus actionable under the FCA when knowingly violated. DOJ’s Civil Rights Fraud Initiative paired the Civil Fraud Section with the Civil Rights Division to police false certifications in government-funded sectors.

AI and automated decision systems

As described above, federal enforcers and regulators have increasingly leveraged AI and advanced analytics to surface anomalies. They may probe AI-driven workflows that influence coding, risk adjustment, prior authorization, and attestations, with emphasis on human validation and defensible audit trails.

For organizations, and particularly government contractors (including January 2025 Executive Order guidance on AI use in federal contracting), AI can both generate risk and help manage it. Risk arises where contractors rely on AI-enabled tools to generate certifications, pricing justifications, or security attestations without proper guardrails. Best practices highlighted by practitioners include maintaining inventories of AI systems used in contract performance; testing/validating models before deployment, requiring human-in-the-loop for payment-material outputs; setting and enforcing clear policies and procedures; training employees; and monitoring for drift with a simple registry of lineage, validations, and change controls. These steps can support materiality defenses and cooperation credit by demonstrating diligence and remediation when issues are found.

Cybersecurity escalation

Expect continued FCA use to police cyber attestations, supply-chain security, and alignment with NIST and FedRAMP-related requirements, with 2025 settlements reinforcing that false statements regarding adherence to NIST SP controls and incident-response readiness can be material even without a large-scale breach.

Practically, entities are encouraged to conduct privileged “attestation dry runs,” map supplier access, and maintain a software bill of materials; they should also institute continuous control monitoring and third-party validation where feasible. Where AI systems are used in cyber-defense or security compliance (e.g., anomaly detection, automated configuration), teams are encouraged to document model limits, human-review thresholds, and fail-safe responses to avoid over-reliance arguments, as well as to demonstrate that automation supplements – rather than replaces – required controls.

Customs and trade enforcement

Anticipate continued focus on origin, misclassification, undervaluation, and reverse-FCA duty exposure under the Trade Fraud Task Force. Consider prioritizing robust import compliance programs.

Compliance, cooperation, and defense playbook

Going forward, companies are encouraged to consider the below steps.

• Prioritize accuracy of payment‑related certifications (e.g., Medicare Advantage risk adjustment, AKS/Stark Law (the physician self-referral statute), cybersecurity, origin/HTS, tariff, and pandemic attestations) and align documentation with operational reality.


• Take advantage of cooperation credit where strategically advantageous and appropriate.


• Prepare for potential relator‑led litigation with strong internal reporting, rapid triage, privilege‑protected investigations, and focused trial readiness on causation, materiality, and public‑disclosure defenses.


• Keep AI governance and cyber readiness board‑visible but pragmatic. Consider implementing central inventories, a lean model registry, human‑in‑the‑loop processes for material outputs, and periodic “attestation stress tests.”


• Integrate trade/supply‑chain controls into enterprise risk management.

Watch for additional DLA Piper client alerts and webinars throughout 2026 to stay informed on these and related developments.