DOJ’s False Claims Act Priorities: Insights from Top Enforcer Reveal Healthcare Industry Focus

Department of Justice officials provided critical insights into False Claims Act (FCA) enforcement at the Federal Bar Association’s recent Qui Tam Conference, signaling important priorities for organizations receiving government funding, particularly in healthcare.

Brenna Jenny, Deputy Assistant Attorney General for the Commercial Litigation Branch, delivered a keynote speech outlining the DOJ’s approach to enforcement and participated in a panel discussing diversity, equity, and inclusion (DEI) policies as potential FCA triggers.

For the healthcare industry, which generates the most FCA recoveries for the government, Jenny’s remarks offer a roadmap to DOJ’s current thinking and enforcement priorities.

In her address, Jenny clarified how the department exercises its prosecutorial discretion when pursuing FCA cases. While the FCA is not intended to be an “all-purpose antifraud statute” or a mechanism for penalizing routine contract breaches, DOJ must balance this limitation against evolving schemes to wrongfully obtain government funds.

Jenny emphasized that the department is more likely to pursue claims involving concrete harm rather than theoretical violations. However, she defined “concrete harm” broadly to include situations where defendants created risk even if no actual harm occurred, as well as program-level damages such as misallocation of funds.

“Programmatic harm matters even in the absence of mathematical precision,” Jenny noted, indicating that difficulty in quantifying damages won’t necessarily deter DOJ from pursuing a case.

The department remains interested in older misconduct as long as it falls within the statute of limitations, unless there have been significant changes in relevant laws or agency positions. Jenny also dismissed the “everyone does it” defense, suggesting that industry-wide problematic practices could actually intensify DOJ’s interest rather than diminish it.

“If conformity to the norm is conformity to fraud, DOJ’s job is to reset the baseline, not reward conformity,” she stated.

The conference also addressed the growing trend of data mining in qui tam cases. While DOJ has historically utilized internal agency data review to identify potential cases, particularly in opioid prescribing patterns, external data miners are increasingly filing qui tam complaints. Despite this trend, Jenny expects insider whistleblowers to remain the primary source of cases due to their unique access to information unavailable to outside analysts.

Regarding case dismissals, Jenny noted that the department has institutionalized a process of assessing each case for potential dismissal when making intervention decisions. While last fiscal year saw a record 25 dismissals, this represents only a fraction of all qui tam filings, reflecting DOJ’s approach of exercising its authority “appropriately and sparingly” but not “reluctantly.” She emphasized that case merit remains the paramount consideration in these decisions.

Current enforcement priorities continue to focus on managed care issues—particularly enrollment practices, broker kickbacks, and denial of care—as well as improper drug pricing schemes. The administration’s focus on discrimination and DEI also remains a priority, with such cases receiving expedited treatment.

During a separate panel discussion on “illegal DEI” as an FCA trigger, Jenny clarified that organizations “can operate a DEI program without discriminating.” However, she indicated the department is developing cases against entities that allegedly crossed legal boundaries, particularly those that established demographic targets and tied compensation or performance evaluations to meeting these goals.

The healthcare industry should note that DOJ and the Equal Employment Opportunity Commission have recently issued guidance on permissible DEI practices. This creates an interesting tension with Jenny’s keynote remarks about limiting reliance on sub-regulatory guidance and the challenges of imposing liability when agency interpretations change.

As these enforcement priorities continue to evolve, healthcare organizations and other government contractors should carefully review their compliance programs to address these areas of DOJ focus. The department’s broad interpretation of “harm” and its willingness to pursue cases even without precise damage calculations signals a robust enforcement environment for the foreseeable future.