False Claims Act: Recent Updates

The False Claims Act developments you need to know in about 5 minutes or less.

DOJ’s False Claims Act Recoveries Hit a Record $6.8B: Healthcare Leads the Way

On January 16, 2026, DOJ released its annual report on FCA enforcement statistics for the 2025 fiscal year. The report reveals over $6.8 billion in settlements and judgments—the highest single‑year total and over double the figure from 2024 (which exceeded $2.9 billion), according to the accompanying statistics sheet. Whistleblowers drove the docket: qui tam matters generated more than $5.3 billion of the total recoveries, with filings at an all-time high. 

Healthcare dominated the totals, accounting for over $5.7 billion (about 83% of FY25 recoveries) with DOJ’s report and the accompanying fact sheet highlighting three focal areas: Managed Care/Medicare Advantage (risk‑adjustment and related practices), prescription drugs (including kickbacks, pricing/reporting), and medically unnecessary/substandard care. Beyond healthcare, DOJ signaled continued use of the FCA in procurement/defense contracting, cybersecurity compliance under the Civil Cyber‑Fraud Initiative, pandemic‑relief programs, and tariff/customs matters.

Record FCA Settlement Signals Intensified Scrutiny of Medicare Advantage Risk-Adjustment

On January 14, 2026, DOJ announced that Oakland-based Kaiser Permanente and several of its affiliates agreed to pay $556 million to resolve allegations that they violated the FCA by submitting unsupported diagnosis codes for Medicare Advantage (“MA”) beneficiaries to inflate reimbursement from the federal government.

Under the MA program, the Centers for Medicare & Medicaid Services (“CMS”) adjusts payments to MA Organizations (“MAOs”) based in part on enrollees’ health conditions, such that a higher risk score begets a higher payment. At issue in this case was retroactive diagnostic risk coding—adding diagnoses to medical charts months after patient visits.

The settlement comes amid broader investigations into MA billing practices. A recent U.S. Senate report levied allegations of similar reimbursement-inflation tactics against another prominent MAO. Meanwhile, CMS has moved to tighten oversight—in May 2025, it rolled out an aggressive strategy to enhance and expedite MA audits, committing to audit all eligible MA contracts each payment year. And on December 22, 2025, CMS implemented a new online form for providers to submit MA plan complaints through CMS’s portal.

This settlement, the largest ever involving MA, fits squarely within an increasingly active MA enforcement landscape and signals DOJ’s continued focus on risk-adjustment, documentation standards, and retroactive diagnosis coding. MAOs should carefully consider these issues when assessing their practices, procedures, and controls.

Eleventh Circuit Weighs Constitutional Challenge to FCA Qui Tam Provisions

On December 12, 2025, a three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit heard oral argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, a case challenging the constitutionality of the FCA’s qui tam provisions under Article II. The panel focused its questioning on three main issues: (1) whether relators exercise “significant authority” sufficient to trigger the Appointments Clause; (2) whether relators occupy a “continuing position established by law”; and (3) the weight to be given to the historical pedigree of qui tam statutes dating to the founding era.

The panel appeared skeptical that the historical pedigree of qui tam statutes—relied upon by the government and relators to support the FCA’s constitutionality—could overcome the constitutional text of Article II. However, the panel did not definitively tip their hand on a final ruling, instead asking probing questions of both sides. The panel also discussed remanding the case to allow the district court to address Vesting Clause and Take Care Clause arguments not reached in its September 2024 decision.

This case is likely to reach the Supreme Court regardless of the outcome. Justice Kavanaugh, joined by Justice Thomas, recently reiterated that the qui tam provisions “raise substantial constitutional questions under Article II” and that the Court should address them “in an appropriate case.” See Wisconsin Bell, Inc. v. United States ex rel. Heath, 604 U.S. 140 (2025) (Kavanaugh, J., concurring). Notably, however, Justice Barrett joined a similar concurrence by Justice Kavanaugh in 2023, but did not join the Wisconsin Bell concurrence—raising the question of whether there remain four votes to grant certiorari. See United States, ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419 (2023) (Kavanaugh, J., concurring, joined by Barrett, J.).

Meanwhile, two Fifth Circuit judges have issued concurrences indicating they would find the qui tam provisions unconstitutional, with Judge Ho urging the court to “revisit whether there are serious constitutional problems” with the provisions, and Judge Duncan declaring that the Constitution “does not allow this outsourcing of prosecutorial power to a private person.” 

With at least two Supreme Court Justices, Thomas and Kavanaugh, signaling interest in reviewing the constitutionality of the qui tam provisions, and similar skepticism emerging from the Fifth Circuit, qui tam defendants should monitor these developments closely.

This article was written with Associate Celeste Charlet

As always, the BCLP team will be closely monitoring developments in this space and is available to provide guidance.