Key Takeaways: False Claims Act Enforcement and Litigation Trends Coming Out of 2025

False Claims Act enforcement remained strong in 2025, with significant recoveries and continued scrutiny across healthcare and other industries. As courts consider key liability questions and the US Department of Justice signals focus on areas such as cybersecurity, customs, and compliance certifications, companies that interact with federal funds should remain attentive to shifting enforcement priorities heading into 2026.

False Claims Act (FCA) enforcement in 2025 reflected both continuity and transition. The FCA retained its place as the government’s primary fraud enforcement tool, with the US Department of Justice (DOJ) reporting more than $6.8 billion in FCA recoveries in fiscal year 2025, the largest annual total on record. And courts continued to refine core elements of FCA liability in traditional areas of enforcement, including what constitutes a “claim” on government funds and how causation must be shown in Anti-Kickback Statute (AKS) cases. Meanwhile, DOJ highlighted enforcement priorities in non-traditional or emerging areas, demonstrating how both the government and qui tam relators will attempt to utilize the FCA to meet evolving policies and technologies.

The below takeaways highlight key developments from 2025 and identify issues companies should be monitoring as they plan for 2026.

• Government involvement in funding streams can still trigger FCA exposure even when funds are not paid directly by the US Department of the Treasury. The US Supreme Court’s decision in Wisconsin Bell confirmed that reimbursement requests tied to programs with mixed public-private funding may qualify as FCA “claims” if the government has provided any portion of the funds, underscoring that indirect payment structures or private administrators do not necessarily insulate companies from FCA risk.
• Broader questions about the FCA’s reach remain unresolved and may resurface. The Court declined to address whether funds merely facilitated by the government or administered by private entities acting as government agents fall within the statute, leaving continued uncertainty for participants in federally influenced programs and setting the stage for future litigation.
• The circuit split over AKS causation standards has deepened. Courts remain divided between requiring “but-for” causation and a looser “sufficient causal connection” for FCA claims premised on AKS violations, with meaningful implications for liability theories, damages exposure, and forum selection.
• DOJ and relators continue to pursue expansive AKS theories despite mixed appellate results. Even in circuits adopting stricter causation standards, enforcement authorities and relators continue to argue that AKS violations broadly taint subsequent claims, relying on false-certification theories where causation may be difficult to establish.
• Constitutional challenges to the qui tam provisions of the FCA remain unresolved and are likely to remain in focus in 2026. Although the Supreme Court avoided constitutional issues in Wisconsin Bell, several justices continued to reiterate substantial questions surrounding the Article II constitutionality of the qui tam framework and relator authority. Challenges premised on these questions are pending in several circuits with potentially significant implications for FCA qui tam litigation and the possibility of further Supreme Court review.
• FCA enforcement activity remains robust. DOJ’s fiscal year 2025 statistics reflect sustained enforcement across healthcare, procurement, and grant-related matters.
• Looking ahead, companies can expect sustained or increased enforcement focus in both traditional and non-traditional areas:
  • Kickbacks and financial relationships, with healthcare and life sciences companies continuing to face scrutiny over speaker programs, honoraria, meals, and other interactions with healthcare providers. Recent matters highlight the significant financial exposure that can arise from FCA claims premised on alleged AKS violations.
  • DEI-related certifications and representations, particularly where government contractors and funding recipients are required to certify compliance with nondiscrimination requirements. While theories of liability premised on DEI compliance remain untested in the courts, DOJ has opened several FCA investigations in this area and is likely to continue examining allegedly inaccurate, incomplete, or overbroad DEI-related statements in bids, grant applications, or compliance certifications under the current administration.
  • Customs and trade compliance, which has long been a source of potential FCA liability, is a renewed focus under the current administration, with an emphasis on investigations of potential tariff evasion.
  • Healthcare billing and coding, with continued emphasis on allegedly medically unnecessary services and aspects of the reimbursement and claim approval process.
  • Cybersecurity and data protection obligations, across both the defense contracting industry subject to cybersecurity provisions in the FARs and DFARs and also across other industries ranging from healthcare to education where federal grants or contracts may have a cyber or data protection component. DOJ has signaled that failures to meet required security controls or to disclose known vulnerabilities or incidents will be treated as a premise for potential liability under the FCA when federal funds are at issue.

CONCLUSION

As FCA enforcement heads into 2026, the landscape is defined less by sweeping doctrinal change than by sustained enforcement pressure, with the FCA being used flexibly by both DOJ and relators. Record recoveries, divisions among the courts on key legal issues, and continued focus on both traditional areas of liability (e.g., healthcare, kickbacks) and emerging priorities (e.g., DEI, customs) underscore the importance of proactive risk management.

Companies that regularly interact with the government programs or receive federal funds, whether directly or indirectly, should continue to monitor legal developments closely and ensure that contracting and compliance practices keep pace with evolving enforcement trends.