On May 27, in furtherance of the March 16, 2026 Executive Order on Eliminating Fraud, Assistant Attorney General Brett A. Shumate issued a memo titled “Accelerating Review and Enhancing Enforcement in Benefits Fraud Matters.” The Memo announced new measures by the U.S. Department of Justice (DOJ) to strengthen False Claims Act (FCA) enforcement targeting fraud committed against federally funded benefits programs administered by states, which would include Medicaid, among many others (“Benefits Fraud”).
The Memo notes that Congress “has historically relied on private whistleblowers to combat a wide range of misconduct that violated federal law” and that it “enacted the FCA to provide [DOJ] with discretion to permit whistleblowers to stand in the shoes of the government to pursue fraud on its behalf, subject to oversight and control, and to reward whistleblowers for doing so.” The Memo lists various steps DOJ will be taking to “support meritorious qui tam actions” with the goal of permitting DOJ to “prioritize and, to the maximum extent practicable, complete its review of new benefits fraud qui tam actions within the 60-day period” described in the FCA, “but no later than 120 days.”
At the end of its review, DOJ will either “1) permit the relator to proceed with the action and to assume primary responsibility for litigating it, subject to the government’s ongoing supervision and ultimate control of the matter; 2) conclude the allegations warrant further government investigation; or 3) determine the qui tam should be dismissed under [the FCA] because the allegations lack adequate specificity or are legally deficient.” The Memo states that this “streamlined” review will allow DOJ to “expedite potentially meritorious qui tam cases and supplement the government’s finite resources” while also “allowing the government to concentrate its efforts on dismantling and holding accountable sophisticated actors that are responsible for the largest, most complex, and harmful fraud schemes.” While DOJ recognizes that this new approach “will increase the number of benefits fraud matters primarily litigated by relators,” it expects that DOJ attorneys “will continue to assume primary responsibility for investigating and pursuing the majority of incoming qui tam matters.”
In deciding whether to allow a relator to proceed to litigation, DOJ may consider whether (a) the allegations, if true, would establish a FCA violation, (b) the alleged facts are supported by other evidence (including data analytics, agency information, or the relator’s inside information), (c) the alleged scheme or course of misconduct is not novel or complex, (d) the amount of the potential damages does not exceed $10 million, and (e) any aggravating factors are present, “such as beneficiary harm, ongoing misuse of federal funds, or concealment or deceit by the defendant.” DOJ will maintain oversight and control of the case, including whether “to object to dismissal on public disclosure grounds or to dismiss the action if the allegations are not substantiated and it is no longer in the government’s interest for the matter to be pursued.”
If DOJ decides that further investigation is needed, the “investigation shall proceed on an expedited basis of 120 days” during which time DOJ will develop an investigative plan that includes a schedule for “prompt issuance” of Inspector General subpoenas and Civil Investigative Demands (CIDs) and “early witness interviews.” Information requests should be appropriately “tailored to the issues under investigation, and early witness interviews and oral examinations should be considered as possible alternatives to the production of certain categories of documents.” The Memo also states that defendants should be given a “definitive” period for responding to information requests and if they unjustifiably fail to do so, an action to enforce the subpoena or CID should be filed. The Memo acknowledges that counsel for the Relator may be “a valuable resource who can help expedite the Department’s investigation” and that DOJ attorneys should consider requesting such assistance where appropriate.
The Memo further states that if settlement “is not likely” and it would “unduly extend” the investigation to develop a detailed damages analysis, “it may be appropriate to make an intervention decision once there is evidence to support liability and the general parameters of the government’s loss” and that “further refinement of damages can occur during discovery after the government intervenes in the action.” Further extensions after the 120-day investigation period is concluded must be authorized by the Deputy Assistant Attorney General of the Commercial Litigation Branch in the first instance, and by the Assistant Attorney General of the Civil Division for any subsequent extension.
DOJ will evaluate new Benefits Fraud cases for “all available enforcement options” and cases “will be promptly referred to the Criminal Division and/or the National Fraud Enforcement Division for evaluation of potential criminal violations.” Additionally, “new matters will be shared with the affected agency to evaluate potential administrative action, including payment suspension.” DOJ will also consult with the relevant agency in an effort to obtain information that may “assist it in corroborating the whistleblower’s allegations.”
The enforcement measures described above mark an aggressive new approach by DOJ in investigating and prosecuting Benefits Fraud cases under the FCA, and signal what is likely to be a significant surge in relator-led Benefits Fraud prosecutions under the statute. That, in turn, may portend other changes in how these cases progress through the courts.
Given DOJ’s stated policy to support “meritorious” qui tam actions, it is fair to wonder whether courts will be less inclined to be influenced by defense arguments that a DOJ decision to decline a qui tam action in favor of allowing a relator to move forward separately with litigation indicates a lack of merit, and more inclined to assume just the opposite. Also, it seems reasonable to ask whether DOJ will be more inclined, for Benefits Fraud cases it determines are “meritorious,” to support those cases as they are litigated by objecting to dismissal on public disclosure grounds and/or by filing a Statement of Interest in support of legal positions taken by the relator in the litigation. Time will tell. What seems certain is that more of these cases will be filed and they will be moving more swiftly through the bureaucracy of DOJ, resulting in significant burdens and potential liabilities for those who must defend them.
Anyone who has questions about the new DOJ policy or anything in this article may contact the author at Geoffrey.kaiser@rivkin.com or (516) 357-3161.
Sign up to receive Rivkin Rounds at www.RivkinRounds.com.