Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

DOJ Signals Continued Aggressive False Claims Act Enforcement

Skadden Publication / White Collar Defense and Investigations

Avia M. Dunn Maya P. Florence Bradley A. Klein Quyen L. Ta

Executive Summary

  • What’s new: In recent remarks, a key DOJ official signaled continued aggressive False Claims Act enforcement, with priorities including health care, trade fraud, antidiscrimination and increased use of data analytics to identify potential violations.
  • Why it matters: These developments are relevant to health care entities, federal contractors and importers, as the DOJ views the FCA as a flexible tool for emerging enforcement priorities, heightening the need for effective internal controls.
  • What to do next: Companies should consider evaluating compliance programs to ensure they are robust, including conducting proactive internal reviews and risk assessments, and preparing for evidence-based discussions with the government to address potential exposure.

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At the Federal Bar Association’s (FBA’s) 2026 Qui Tam Conference, Brenna Jenny, deputy assistant attorney general for the Commercial Litigation Branch of the Department of Justice (DOJ) Civil Division, highlighted several themes likely to shape False Claims Act (FCA) investigations and settlements in the year ahead. For companies doing business directly or indirectly with the federal government, these remarks make clear that the DOJ views the FCA as a flexible tool for emerging enforcement priorities, heightening the need for effective internal controls and proactive risk assessment.

Below, we summarize key trends and practical takeaways for companies doing business with the federal government.

Key Points

  • Enforcement priorities: Health-care-related FCA enforcement will continue to target managed care, drug pricing and unnecessary or substandard services. Trade fraud investigations, particularly involving misclassification, undervaluation, and misstatement of country of origin, are also on the rise. 
  • Patient and program harm as a key enforcement driver: Cases involving dangerous or noncompliant items and services that jeopardize patient safety or federal health-care program integrity remain strong candidates for DOJ enforcement. Jenny indicated that even where harm has not materialized or cannot be precisely quantified, meaningful risk alone may support enforcement action.
  • Expanding FCA liability theories: Antidiscrimination enforcement is a top priority for the DOJ, specifically targeting federal contractors that implemented programs and practices that pressured supervisors and management to make hiring and promotion decisions based on race or sex.
  • Data analytics drive enforcement: The DOJ is increasingly relying on advanced analytics to identify potential fraud, flagging outlier patterns even before whistleblowers come forward. By the time a civil investigative demand is issued, the government typically has already conducted a detailed, data-driven review, underscoring the importance of early internal audits and proactive risk management.
  • Prosecutorial discretion: The DOJ is actively evaluating 31 U.S.C. § 3730(c)(2)(A) dismissal authority in every case and prioritizes allegations involving dangerous or defective products, program-level harm and material violations.
  • Importance of compliance programs: Robust compliance programs, proactive internal reviews and risk assessments can help identify potential exposure, address anomalies and prepare companies for evidence-based discussions with the government.

Health-Care-Related Enforcement Priorities and Trends

The DOJ continues to focus significant resources on health-care-related FCA cases, consistent with prior years. In fiscal year 2025, the majority of recoveries came from the health-care industry, with three areas emerging as primary enforcement priorities:

  • Managed care: Cases in this area often involve the submission of unsupported risk-adjusted diagnosis codes, improper chart reviews, failure to remove unsupported codes, inappropriate post-encounter coding or provider directory issues. The DOJ is also monitoring for fraudulent enrollment practices, marketing misrepresentations and improper broker or provider conduct, including cherry-picking patients or abuse of medical loss ratios.
  • Drug pricing: In line with the administration’s priority of lowering drug prices, DOJ investigations are targeting conduct that it believes directly or indirectly inflates drug prices. Areas of focus include inaccurate pricing information, inconsistent application of complex pricing rules, and arrangements — such as co-pay assistance programs — used to influence utilization or insulate against price increases.
  • Unnecessary services and substandard care: The DOJ will continue to pursue cases where services are systematically furnished in ways inconsistent with accepted clinical standards. Investigations will cover defective medical devices or Food and Drug Administration (FDA)-regulated products, focusing on whether manufacturers knowingly misrepresented compliance with technical or regulatory standards when submitting claims for payment.

Increased Trade-Related Enforcement

Jenny also signaled that trade-related FCA enforcement will continue to be a high priority, with the Civil Division leading efforts through the cross-agency Trade Fraud Task Force that meets monthly to coordinate investigations and maximize recoveries. Recent trends indicate record numbers of trade fraud qui tam actions and FCA settlements, particularly involving imported goods from China. Alleged misconduct typically falls into three categories:

  • Misclassification: Importers list goods in a lower-duty category, reducing the duties owed. The DOJ is focused on schemes where the misclassification is deliberate and systematic, rather than isolated errors.
  • Undervaluation: Importers understate the value of goods or associated components to lower duty obligations. Investigations will examine internal pricing records, invoices and cost documentation to identify discrepancies between reported and actual values.
  • Misstating country of origin: Importers falsely declare goods as originating from countries with lower or no duties. Common tactics include transshipment, routing products through intermediary countries or shell companies to obscure their true origin. The DOJ is scrutinizing patterns that suggest intentional circumvention of tariff obligations.

The FCA as a Vehicle for Antidiscrimination Enforcement

Jenny made clear that the Civil Division is also prioritizing investigations of government contractors for potential violations of federal antidiscrimination laws, particularly clauses of the Federal Acquisition Regulation (FAR) prohibiting federal contractors from discriminating in employment against applicants or employees based on protected categories. She highlighted examples of conduct that the Civil Division has found to be problematic:

  • Demographic goals: Tracking of goals for employee demographics, with no connection to remedying utilization within the framework established by the Office of Federal Contract Compliance Programs.
  • “Diverse slate” policies: Requiring that the pool of candidates for a particular position includes individuals from underrepresented groups.
  • Compensation tied to diversity outcomes: Linking a portion of employee compensation to progress toward internal workforce demographic targets or efforts to support diversity within the company (e.g., staffing projects with at least a certain number of people of a specified race).
  • Executive training and mentoring programs: Programs where membership is restricted based on protected characteristics, especially where there is a nexus between participation in these programs and promotion.

Jenny emphasized that compliance with federal antidiscrimination laws will be treated as material to government contracting decisions. Damages for FCA violations under this theory will necessarily be fact-specific, but the government could seek to use the full value of the contract as the measure of single damages in cases where it alleges that the government would not have awarded the contract at all were it not for alleged misrepresentation of discriminatory practices.

Data-Driven Enforcement

Jenny also signaled that the DOJ is increasingly using advanced data analytics to identify potential FCA violations. Its platforms are able to flag outlier patterns in prescribing, dispensing and other utilization data that may indicate fraud and link those patterns to patient harm or program-level risk. By analyzing these trends, the DOJ can identify issues early, often before a whistleblower comes forward. Jenny indicated that, by the time a civil investigative demand has been issued, the DOJ has typically already completed a thorough review of relevant data, enabling faster, evidence-based engagement with companies. 

While whistleblowers and external signals remain valuable to address information gaps, the DOJ’s analytics increasingly drive how potential fraud is identified, assessed and prioritized. Companies should assume that DOJ likely already has a detailed, data-backed view of any alleged misconduct before outreach begins. Early internal reviews can help identify potential exposures, address anomalies proactively and prepare for evidence-based discussions with the government.

How the DOJ Is Evaluating Dismissals and Targeting Risk

Jenny signaled that the Civil Division will actively assess whether dismissal under 31 U.S.C. § 3730(c)(2)(A) is appropriate in every case. Unlike in past years, where dismissal decisions were often made on an ad hoc basis, the government is now evaluating potential dismissals systematically at the point of declination and continues to reassess as cases evolve. The administration has already seen a notable uptick in dismissals, with record numbers in the past fiscal year, reflecting process changes designed to ensure consistent, evidence-based assessments.

When exercising prosecutorial discretion in FCA matters, the DOJ will continue to place the highest priority on cases involving items or services that are dangerous, defective or otherwise might jeopardize patient health and safety. Jenny stated that putting individuals at risk — even if no actual harm occurs — will be considered seriously problematic.

The DOJ also recognizes that the FCA protects the integrity of federal programs, not just individual beneficiaries. Accordingly, misallocation of limited funds or distorted eligibility decisions can constitute actionable harm. Moreover, difficulties in precisely quantifying damages will not lessen their significance. Where there is strong evidence of a material legal violation, programmatic harm is meaningful even in the absence of exact mathematical calculation.

Jenny made clear that certain arguments will generally carry little weight in influencing the DOJ’s decision whether to pursue an investigation.

  • Arguments that alleged misconduct is stale because too much time has passed will be considered unpersuasive: The DOJ recognizes that cases often take years to develop due to factors beyond its control, such as ongoing criminal investigations, and the statute of limitations already sets boundaries on age. More persuasive arguments will focus on whether intervening law genuinely alters the original legal theory or whether evidentiary issues caused by the passage of time make proving the case materially difficult.
  • Arguments that misrepresentations were nonmaterial because the government continued to pay are not likely to be effective: Jenny emphasized that the DOJ will not consider continued payment as indicative of government approval, particularly where agencies lack real-time visibility into the underlying conduct. Stronger arguments will rely on evidence of affirmative, informed acceptance by the relevant agency.
  • Arguments that the conduct reflects widespread industry practice are also generally unpersuasive: Systemic noncompliance may actually increase the DOJ’s interest because normalized misconduct may indicate broader risk to government programs. Such arguments are more relevant when tied to government knowledge or regulatory ambiguity — for example, whether the agency had actual knowledge of the practice, or whether the industry reasonably relied on longstanding guidance or ambiguous rules.

Subregulatory Guidance and Enforcement

Jenny made clear that subregulatory guidance will not, by itself, create legal obligations or serve as the basis for enforcement. The DOJ treats guidance as informative, not binding, and will closely assess any matter premised on guidance that attempts to impose obligations beyond what the law requires.

She emphasized that this posture is not just procedural but will affect how the DOJ evaluates cases. Enforcement decisions will prioritize substantive violations and program integrity over technical noncompliance with guidance. Matters premised on subregulatory guidance that exceeds statutory authority will receive heightened scrutiny. For clients, this underscores the importance of distinguishing statutory obligations from guidance in assessing exposure and compliance risk.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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