In a significant development for healthcare and defense contractors, the Department of Justice has reported record numbers of qui tam lawsuits in the past fiscal year, according to recent statistics and public statements by senior DOJ officials overseeing False Claims Act enforcement.

The surge in whistleblower cases comes alongside a more aggressive approach by the DOJ in dismissing improper qui tam lawsuits, signaling a dual strategy of encouraging legitimate fraud reports while attempting to filter out meritless claims.

Legal experts have noted that the statistics reveal intensified scrutiny of the healthcare and defense contracting sectors, two industries that have historically been the primary targets of False Claims Act enforcement actions. The healthcare industry in particular continues to face substantial scrutiny, with cases involving allegations ranging from Medicare and Medicaid billing fraud to kickbacks and substandard patient care.

“The DOJ is clearly using the False Claims Act as a powerful tool to enforce its policy priorities,” noted Cormac Conner, partner at Husch Blackwell, during a recent discussion on the topic. “We’re seeing enforcement patterns that align with broader administrative goals.”

The statistics suggest the DOJ is strategically applying False Claims Act enforcement to address various Trump Administration policy priorities, particularly in the areas of diversity, equity, and inclusion (DEI) initiatives and tariffs enforcement. This marks an expansion of traditional FCA enforcement areas and signals to corporations that compliance failures across a broader spectrum of federal requirements may trigger FCA liability.

Healthcare providers should take particular note of the DOJ’s increased focus on claims involving substandard patient care. This represents a significant shift from purely financial fraud cases to those that question the quality of services provided to federal healthcare program beneficiaries.

Legal observers point to several looming battles on the horizon as a result of these developments. Among the most significant is an ongoing constitutional challenge to the qui tam provisions of the False Claims Act. Critics argue that allowing private whistleblowers to bring suits on behalf of the government with the potential to share in financial recoveries raises separation of powers concerns.

Another emerging battlefield involves the DOJ’s reported use of artificial intelligence to vet False Claims Act theories and identify potential cases. This technological approach raises questions about the standards of evidence, privacy concerns, and the potential for algorithmic bias in fraud detection.

For companies operating in industries subject to False Claims Act enforcement, these developments necessitate a proactive response. Compliance professionals are advised to strengthen internal reporting mechanisms, conduct thorough risk assessments, and implement robust documentation practices to protect against whistleblower claims.

“The combination of record qui tam filings and more aggressive DOJ dismissal actions creates a complex environment for regulated entities,” said one industry compliance consultant. “Companies need to understand that the landscape has shifted and adjust their compliance programs accordingly.”

The False Claims Act, originally enacted during the Civil War to combat contractor fraud, has evolved into one of the government’s most powerful fraud-fighting tools. In recent years, recoveries under the Act have totaled billions of dollars annually, with whistleblowers receiving substantial portions of those settlements.

Experts recommend that organizations in vulnerable sectors implement comprehensive compliance programs that include regular audits, employee training, clear documentation procedures, and functional internal reporting systems to address potential issues before they escalate to external whistleblower claims.

As the DOJ continues to refine its approach to False Claims Act enforcement, companies in healthcare, defense contracting, and other federally funded sectors will need to remain vigilant about compliance obligations and responsive to evolving enforcement priorities.