Constitutional Challenges to the False Claims Act: an Opportunity to Reconsider DOJ’s “Money Over Everything” Approach to Health Care Enforcement

The False Claims Act — the centerpiece of the Department of Justice’s (DOJ’s) efforts to combat health care fraud — is under constitutional attack. Whether or not the challenges are successful, the moment creates a much-needed opportunity for reflection on the role the FCA plays in shaping health care fraud enforcement, as I detail in a recently published article. 

The False Claims Act & Whistleblowers

The False Claims Act’s (FCA) qui tam provisions allow private individual whistleblowers to sue those committing fraud against government funds on behalf of the government and potentially receive a share of any recovery.

The FCA, and particularly its whistleblower provision, drives health care enforcement, leading to large financial recoveries year after year. Of the $5.7 billion recovered by the DOJ in health care FCA matters in 2025, $4.5 billion derived from qui tam cases, with much of it coming from cases handled by whistleblowers without DOJ’s involvement

Constitutional Threat to the FCA

While those whistleblowers have supercharged the statute’s effectiveness, three Supreme Court Justices recently suggested the system violates the Constitution by giving private parties authority that can only be held by the Executive Branch.  

Through a dissenting opinion (Justice Thomas) and a concurring opinion (Justices Kavanaugh and Barrett) in a 2023 FCA decision focused on other issues, the three Justices indicated they were willing to review the provision’s constitutionality in a future “appropriate case.” That language has inspired challenges and arguments throughout the country. 

Since then, a District Court judge took the hint and held the qui tam system violates Article II’s appointment clause, while defendants throughout the country have raised the issue. The 11th Circuit has yet to rule on the appeal, which regardless of outcome will create an opportunity for the Supreme Court to consider the question, at the same time as others are seeking to bring the issue to the Supreme Court.

An Opportunity to Reconsider the Role of the FCA in Shaping Health Care Fraud Enforcement

The impact on health care enforcement would be catastrophic were the FCA’s whistleblower provisions to be struck down, but there has been a notable absence of discussion surrounding alternatives or much-needed analysis of whether the current form of the qui tam system truly serves the best interests of health care enforcement.

Are decades of large annual recoveries evidence of an enforcement program that is working, or one that isn’t? There continues to be significant reason for skepticism that the financial portion of fraud actions are sufficient to create specific or general deterrence, and viewed through that lens, DOJ’s recovery announcements may be a sign that fraud-fighting efforts focused on financial recoveries aren’t creating adequate deterrence.

Enforcement Shifts Outside of Health Care

Outside of health care enforcement, the government has increasingly emphasized compliance mandates as an opportunity to prevent future misconduct both at defendant entities and more broadly. Yet in the world of health care fraud, DOJ has not made the shift. Nearly a decade ago, Professors Jennifer Arlen and Marcel Kahan described corporate criminal enforcement in the United States as having “undergone a dramatic transformation [over the prior decade]. Federal officials no longer simply fine publicly held firms that commit crimes. Instead, they use their enforcement authority to impose mandates on these firms — mandates that can require a firm to alter its compliance program, governance structure, or scope of operations.”

Outside of health care, that evolution is largely taken for granted. Rather than taking a retributive approach, DOJ’s approach to corporate enforcement outside of health care has sought to create industry-wide deterrence not only through fear of punishment, but through guided change. Since 2003, the Justice Manual’s Principles of Federal Prosecutions of Business Organizations has described enforcement against corporate entities as “enabl[ing] the government to be a force for positive change of corporate culture.”

That health care enforcement has been largely untouched by the transformation is attributable to the unique characteristics of its FCA-dominated enforcement model. Under the current system, DOJ negotiates financial-only civil settlements while, in larger cases, HHS-OIG (U.S. Department of Health and Human Services and Office of Inspector General) separately negotiates the terms of accompanying Corporate Integrity Agreements (CIAs), the vehicle for forward-looking compliance mandates. This separation (lacking in areas outside of health care) leaves DOJ with little incentive to bargain away financial recovery (its sole measure of success) in exchange for compliance mandates (for which HHS-OIG receives the credit).

Is Enforcement Strategy Too Focused On Money? The Case for Reform

Even more powerful may be the impact of the FCA’s whistleblower model on case selection. Though DOJ trumpets its use of data mining and other techniques to generate cases on its own, more than 70 percent of newly opened cases in 2025 came from qui tams. Yet FCA whistleblowers are rewarded exclusively based on financial loss to the government. It thus provides substantial rewards for qui tam whistleblowers to identify technical violations by well-financed entities involving substantial amounts of government money. At the same time, it offers no reward for a whistleblower who stops ongoing misconduct involving patient harm unless the FCA’s other criteria are met and the defendant entity is well-funded.

In a new article recently published in the Missouri Law Review, I analyze 425 DOJ FCA resolutions (Civil Settlement Agreements, or CSAs) with corporate health care defendants between early 2018 and May 2024, as well as all related DOJ press releases and CIAs. The data confirms what is not surprising based on the incentives created by the FCA system:

• Despite the FCA allowing recovery of treble damages plus penalties, the mean settlement had a multiplier of only 1.71, and 87 percent of settlements were at or below double damages. DOJ is using its substantial leverage to generate settlements without requiring the level of financial penalty likely to create deterrence on its own. 
• Of the more than 400 DOJ press releases reviewed, all but four focused on the financial recovery, with 99 percent referencing the settlement’s dollar figure in the headline or first paragraph of the press release.
• Whether or not a CIA was required was based almost entirely on the amount of money involved, with 56 percent of settlements above $10 million including a CIA as compared to only 7 percent of settlements at or below $2.5 million.

This comes in the context of a system that fails to reward pre-existing compliance programs, largely fails to meaningfully hold corporate defendants accountable, and largely fails to reward corporate cooperation.

There is much positive to be said for the FCA and its qui tam provision, and health care fraud enforcement would undoubtedly be far weaker without it. But efforts to resist destruction of the statute should be joined by efforts to improve it, focused not on practical rather than constitutional deficiencies. At the center of those efforts must be recognition of not only the positive impacts, but also the more debatable influence, of the FCA’s current incentive structure.