DOJ Official Provides Key Insights on False Claims Act Enforcement Priorities

Government contractors and healthcare providers received critical guidance on False Claims Act (FCA) enforcement as Department of Justice (DOJ) Commercial Litigation Branch Deputy Assistant Attorney General Brenna Jenny addressed attendees at the Federal Bar Association’s annual Qui Tam Conference last month.

In her keynote speech, Jenny outlined the government’s enforcement philosophy and participated in a panel discussion on diversity, equity, and inclusion (DEI) initiatives as potential FCA triggers. Her remarks offered a window into how the DOJ approaches FCA cases and exercises its prosecutorial discretion in this high-stakes arena.

The healthcare industry, which generates the largest FCA recoveries for the government, should pay particular attention to these developments. Jenny emphasized that while the FCA is not an “all-purpose antifraud statute” or a mechanism for punishing routine regulatory violations, the DOJ applies several key factors when deciding which cases to pursue.

According to Jenny, the DOJ prioritizes cases involving concrete harm rather than theoretical violations. However, she broadened the definition of “concrete harm” to include situations where people were placed at risk even if no actual harm occurred. She also noted that program-level harm, such as misallocation of federal funds, qualifies as concrete harm even without individual-level damage.

Importantly for potential defendants, Jenny indicated that the inability to precisely quantify damages would not necessarily deter the DOJ from pursuing a case. “Programmatic harm matters even in the absence of mathematical precision,” she stated, suggesting the department takes a holistic view of harm to government programs.

The DOJ official addressed several common misconceptions about FCA enforcement. She warned that the defense that “everyone does it” is more likely to provoke DOJ interest than reduce it, unless defendants can prove the relevant agency explicitly accepted the industry-wide practice. Jenny remarked that if conformity to industry norms means conformity to fraud, the DOJ’s role is to “reset the baseline, not reward conformity.”

Jenny also addressed the increasing role of data mining in qui tam cases. While external data miners represent a growing portion of whistleblower complaints and sometimes identify patterns the DOJ hasn’t yet discovered, Jenny predicted that insider whistleblowers would continue to dominate qui tam filings because of their access to critical information neither the DOJ nor third-party data miners possess.

Regarding the dismissal of qui tam cases, Jenny noted that the DOJ has institutionalized the practice of assessing every case for potential dismissal when making intervention decisions. While the department dismissed a record 25 cases in the last fiscal year, this represents a small fraction of all qui tam filings, reflecting DOJ’s approach to exercise this authority “appropriately and sparingly,” but not “reluctantly.”

Current enforcement priorities highlighted by Jenny include scrutiny of managed care practices, particularly enrollment issues, broker kickbacks, and denial of care. Improper drug pricing, both direct and indirect, remains under the microscope as well.

The panel discussion on DEI and the FCA provided crucial clarification for organizations with diversity initiatives. Jenny confirmed that “entities can operate a DEI program without discriminating,” but warned that the DOJ is developing cases against organizations it believes crossed legal lines. According to Jenny, problematic practices include establishing demographic goals for companies and DEI objectives for individual employees that are tied to compensation or performance evaluations.

Some panel members questioned whether such practices necessarily constitute illegal activity. The DOJ and Equal Employment Opportunity Commission (EEOC) have issued guidance in the past year outlining the administration’s views on legal versus illegal DEI efforts.

This guidance raises interesting questions in light of Jenny’s comments about limiting the use of sub-regulatory guidance and the “serious questions” about imposing liability when an agency’s legal interpretation has changed over time.

As the DOJ continues to shape its enforcement approach, government contractors and healthcare providers should closely monitor developments and ensure their compliance programs address these evolving priorities.