Listen to the article
The False Claims Act stands at a critical juncture in 2026, with the Department of Justice pursuing novel enforcement strategies amid significant judicial uncertainty over core legal doctrines. The law now bears minimal resemblance to what President Lincoln signed more than 150 years ago to combat fraud against the Union Army.
The Trump Administration has dramatically shifted federal enforcement priorities, particularly regarding diversity, equity, and inclusion (DEI) programs. Executive Order 14173 outlines the government’s plan to target what it deems “illegal DEI” policies through False Claims Act (FCA) enforcement. Federal contractors, grantees, and recipients of federal funding—including universities—now face heightened scrutiny of their diversity initiatives.
Beyond DEI, the administration has positioned the FCA as its preferred legal mechanism to influence the practices of government contractors and federal fund recipients. The DOJ has maintained its focus on healthcare fraud while establishing a joint FCA Working Group with the Department of Health and Human Services. Gender-affirming care has been specifically identified as an enforcement target, signaling the administration’s expansive approach to FCA enforcement as it enters its second year.
Tariff enforcement represents another cornerstone of the administration’s economic strategy, with the FCA emerging as a critical enforcement tool. In August 2025, the DOJ announced the creation of a multi-agency Trade Fraud Task Force designed to “aggressively pursue enforcement actions against any parties who seek to evade tariffs and other duties.” This initiative advances the administration’s “America First Trade Policy” and indicates a significant escalation in both civil and criminal enforcement actions. Companies engaged in international trade are reassessing their tariff compliance frameworks to mitigate potential FCA liability.
Despite the administration change, the DOJ’s Civil Cyber-Fraud Initiative—launched in 2021—continues unabated. Throughout 2025, the Department reached seven settlements with government contractors and grantees across defense, information technology, higher education, and healthcare sectors. With evolving technology and intensifying cyber threats, this initiative remains crucial for enforcing cybersecurity requirements in federal contracts and protecting national security interests.
Courts continue to grapple with Anti-Kickback Statute (AKS) liability since its 2010 amendment establishing a specific connection between kickbacks and false claims. A growing circuit split has emerged regarding the appropriate causation standard. While the Third Circuit requires only a “causal connection” between unlawful kickbacks and reimbursement claims, the First, Sixth, and Eighth Circuits have adopted a more stringent “but-for” causation standard, requiring proof that claims would not have been submitted without the alleged kickback.
State attorneys general have increasingly asserted their authority under state versions of the FCA, particularly in targeting Medicaid fraud. While continuing to collaborate with federal counterparts, states are increasingly launching independent investigations, especially against for-profit healthcare companies failing to deliver promised patient outcomes.
Another significant development involves the judicial interpretation of “falsity” following the Supreme Court’s decision in SuperValu. Multiple courts maintain that claims must be “objectively false” to satisfy the FCA’s falsity element, while others have rejected this standard. This emerging circuit split will likely require Supreme Court intervention for resolution.
The year 2025 marked record-breaking FCA enforcement, with recoveries reaching an unprecedented $6.8 billion. Healthcare fraud dominated these recoveries, accounting for approximately 84 percent ($5.7 billion) of the total amount. This substantial increase was partly driven by significant jury verdicts obtained by relators in cases where the government declined to intervene.
As the administration settles into its second year, companies must adapt to this evolving FCA landscape. The law continues to be a powerful enforcement tool, now deployed to advance specific policy objectives while maintaining its traditional role in combating fraud against the government.
Fact Checker
Verify the accuracy of this article using The Disinformation Commission analysis and real-time sources.
8 Comments
This sounds like a concerning development, with the government using the False Claims Act to target diversity and inclusion efforts. I hope there are safeguards in place to prevent abuse of this law for political purposes.
You raise a good point. Enforcing the FCA should be done objectively and without partisan bias. Any politicization of this law could undermine its intended purpose.
This is a complex issue with important implications. While the FCA should be used to combat genuine fraud, applying it to diversity programs and healthcare practices raises concerning questions about its politicization. Transparency and accountability will be key.
The False Claims Act is a powerful tool, but its use needs to be carefully balanced. Expanding it to influence diversity initiatives and social policies raises red flags about potential misuse. Rigorous checks and balances will be crucial going forward.
The FCA has historically been an important tool to combat fraud against the government. But expanding its use to influence social policies is worrying. I wonder if there will be legal challenges to these new enforcement strategies.
That’s a valid concern. The FCA was not designed for this purpose, and its misuse could face pushback from the courts and civil society.
Interesting that gender-affirming care has been singled out as an enforcement target. This seems like a concerning overreach of the FCA’s scope. I hope there is robust oversight to ensure the law is not abused for ideological ends.
I agree, targeting gender-affirming care is highly problematic. The FCA should be applied objectively, not to advance a particular social or political agenda.