DOJ Revises Its FCA Playbook and Ramps Up Fraud Enforcement – Here’s What You Need to Know

By Derek Flint, Karina Salcedo, and Claudia E. Stedman

Against the backdrop of heavy scrutiny on fraud, waste, and abuse in federal programs, the Department of Justice recently revised two sections of its enforcement manual (the “Justice Manual”) covering the False Claims Act (“FCA”). The revisions impact DOJ’s decisions regarding which cases to pursue, which to dismiss, and what evidence DOJ attorneys can marshal in FCA cases. These changes arrive alongside a broader expansion of DOJ’s fraud enforcement efforts, including the enforcement priorities set forth in an August 2026 memorandum establishing DOJ’s new National Fraud Enforcement Division. Companies and individuals in heavily scrutinized sectors—including healthcare companies and importers—should take heed.

I. Overview of the False Claims Act and the Justice Manual

The False Claims Act is the federal government’s primary fraud-enforcement statute.¹ It allows DOJ to sue any person or entity who knowingly submits a false claim for government payment or knowingly avoids an obligation to pay the government.² Violations can result in treble damages, significant per-claim penalties, and, in some cases, criminal liability.³

The statute also has a private enforcement mechanism. Private citizens, called “relators,” can file lawsuits on the government’s behalf.⁴ These “qui tam” suits allow relators to share in any recovery, receiving up to 30% of the proceeds.⁵ Relators can be employees, competitors, customs brokers, or anyone else with nonpublic knowledge of the alleged fraud.

The Justice Manual is DOJ’s internal handbook for federal prosecutors.⁶ It does not have the force of law, but it dictates how DOJ attorneys evaluate cases, make intervention decisions, and use evidence.⁷ When the Justice Manual changes, the enforcement landscape shifts with it.

II. Justice Manual Change #1: Guidance Documents Cannot Independently Establish FCA Liability

The first revision in the Justice Manual affects how DOJ can use agency guidance documents in enforcement actions. Guidance documents, such as CMS Medicare manuals and CBP compliance guides, explain how agencies interpret their own rules. But they are not statutes or regulations. As such, under the revised Justice Manual, DOJ cannot bring an enforcement action based solely on noncompliance with agency guidance.⁸ DOJ also cannot treat a party’s failure to follow guidance as proof that the party violated the underlying law.⁹

This is not entirely new. DOJ adopted a similar policy in 2018 under the “Brand Memo,” which was rescinded during the Biden Administration in 2021, then reinstated in 2025.¹⁰ The revision codifies these principles in the Justice Manual itself, with more detail than before.

While DOJ cannot rely solely on guidance to pursue enforcement, the revised Justice Manual still permits DOJ to use guidance documents as evidence in several ways:¹¹

In practice, the list of permitted uses is broad enough that guidance will likely remain a regular feature of FCA litigation.

III. Justice Manual Change #2: DOJ Signals Greater Use of Its Authority to Dismiss Qui Tam Actions

The second revision addresses a longstanding question in FCA practice: what happens to qui tam cases DOJ declines to join? When DOJ declines to intervene, the relator can still prosecute the case.¹² However, if the relator pursues the case, DOJ has the statutory authority to seek dismissal if the case does not serve the government’s interests.¹³ Historically, DOJ rarely exercised that authority. But the Trump Administration—both the first and second—revived DOJ’s use of its dismissal power in cases the government perceives as weak. The revised Justice Manual reflects that policy change in three ways:

1. Mandatory assessment. DOJ attorneys must now evaluate in every declined case whether seeking dismissal is warranted.¹⁴ The prior policy merely encouraged them to consider it.

2. Ongoing review. Even if DOJ does not seek dismissal when it first declines to intervene, it can revisit that decision as the case develops.¹⁵

3. Broader scope. The first dismissal factor was expanded from curbing qui tams that “facially lack merit” to the broader goal of curbing “meritless qui tams.”¹⁶

The Justice Manual identifies seven factors that may support dismissal, including preventing duplicative or “parasitic” suits, protecting national security interests, preserving government resources, and preventing interference with agency programs.¹⁷

Of note, the revised Justice Manual builds on the Supreme Court’s 2023 decision in United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023), which predates the updated policy. In Polansky, a relator alleged that a physician-advisory firm caused hospitals to bill Medicare for inpatient admissions that should have been billed as outpatient services. DOJ declined to intervene at the outset, but years later, as discovery burdens on the government mounted, it moved to dismiss the case. The Supreme Court held, 8-1, that DOJ may seek dismissal over a relator’s objection even after initially declining, so long as it first intervenes, which a court may permit later in the case on a showing of good cause. Polansky thus supplies the legal foundation for the Justice Manual’s “ongoing review” directive, and it makes clear that a declination does not end the government’s ability to step in and terminate a weak case.

IV. Broader Trends in DOJ Fraud Enforcement, Including the August 2026 Memo

The Justice Manual revisions come as no surprise given DOJ’s recent focus on fraud. On August 13, 2026, Assistant Attorney General Colin M. McDonald issued a memorandum outlining enforcement priorities for DOJ’s newly created National Fraud Enforcement Division.¹⁸ The memo identified five enforcement priorities: (1) public trust and financial integrity, (2) healthcare, (3) internal revenue, (4) global trade and commerce, and (5) corporate misconduct.¹⁹

Trade and tariff enforcement has emerged as a headline priority. The FCA applies to customs fraud because its “reverse false claims” theory imposes liability on anyone who knowingly avoids paying money owed to the government, including customs duties.²⁰ DOJ’s cross-agency Trade Fraud Task Force surpassed $1 billion in recoveries, penalties, forfeitures, and charged losses in less than a year, and the Department created a new Global Trade & Commerce Enforcement Section.²¹ DOJ has also secured large FCA settlements from importers accused of evading customs duties. For example, Perfectus Aluminum agreed to pay $549.5 million to resolve allegations of evading duties on Chinese aluminum extrusions, and Ceratizit USA settled for $54.4 million over alleged misrepresentation of country of origin to avoid Section 301 tariffs.²²

Healthcare enforcement is also intensifying. The Fraud Division memo prioritizes telemedicine fraud, Medicare and Medicaid fraud, controlled substance diversion, home health and hospice schemes, and companies and individuals that deceptively market unsafe products and services.²³ Wound care is another area facing intense DOJ scrutiny. DOJ plans to expand the Health Care Fraud Strike Force model with more resources, including enhanced data analytics.²⁴

Additionally, on September 23, 2026, the U.S. Attorney’s Office for the District of Columbia announced a new Fraud and Asset Recovery Division, which will pursue fraud against the government with a particular focus on the FCA.²⁵

Taken together, the Justice Manual revisions and DOJ’s recent enforcement initiatives send a clear message: fraud enforcement is expanding in scope, growing in resources, and becoming more technologically sophisticated. Companies that interact with federal dollars, whether through healthcare billing, government contracts, or customs duties, should expect more scrutiny, not less.

V. Key Takeaways for Healthcare Companies and Importers

The Justice Manual revisions are fairly favorable for companies. By requiring DOJ attorneys to assess dismissal in every declined case and broadening the dismissal factor to reach all “meritless qui tams,” the revised Justice Manual encourages DOJ to dismiss meritless qui tam suits. Defendants facing weak relator-driven cases should consider asking DOJ to exercise its dismissal authority, at the outset and as the case develops. And, under Polansky, such requests remain viable well after DOJ’s initial declination, particularly where continued litigation would impose discovery or other burdens on the government or the agency.

Guidance still matters. Although noncompliance with agency guidance alone cannot establish FCA liability, DOJ may still use CMS, CBP, and other agency guidance as evidence. Healthcare companies and importers should continue to monitor and follow applicable guidance. The guidance revision is particularly important in healthcare, where FCA theories frequently turn on CMS manuals, local coverage determinations, billing articles, and other sub-regulatory guidance.

These revisions to the Justice Manual do not, however, narrow the most common healthcare FCA predicates. For instance, claims submitted to CMS that are tainted by Anti-Kickback Statute (“AKS”) violations remain false claims by statute; Stark Law violations remain actionable; and medical necessity and upcoding theories may still be tied to statutory and regulatory requirements. Healthcare contractors facing claims premised on a coverage or documentation requirement found only in a manual or other guidance should evaluate whether the requirement is grounded in a statute or regulation.

Expect heightened scrutiny. Healthcare and global trade are among DOJ’s top enforcement priorities under the August 2026 memo. Healthcare companies should review billing, telemedicine, and marketing practices, and importers should confirm the accuracy of country-of-origin, classification, and valuation declarations to avoid customs-related FCA exposure.

Healthcare contractors face distinct exposure. The enforcement priorities reach beyond providers billing Medicare Advantage organizations, Medicaid managed care plans, pharmacy benefit managers, billing and coding vendors, and consultants whose advice shapes claims submitted by others, as Polansky itself illustrates. These entities can face FCA liability for causing false claims, and for knowingly retaining identified overpayments beyond the 60-day repayment deadline under 42 U.S.C. § 1320a-7k(d) (commonly known as “reverse false claims”). Healthcare contractors should consider taking steps to review risk adjustment and data submission practices, confirm that contractual compliance certifications are accurate, and maintain processes to quantify and return identified overpayments promptly.

Strengthen internal reporting. Because relators can be employees, competitors, or customs brokers, companies should maintain robust internal reporting channels and promptly investigate concerns before they become qui tam suits.