The False Claims Act Under the Second Trump Administration: Record Numbers, Shifting Priorities, and What Healthcare Providers Should Expect

Key Takeaways

• DOJ reported a record $6.8 billion in FCA recoveries in FY 2025, with healthcare cases accounting for approximately 83% of total recoveries, reinforcing continued enforcement pressure on providers.
• DOJ staffing losses are slowing new investigations, but not reducing exposure, as whistleblowers and data analytics continue to drive FCA cases independently.
• Pending constitutional challenges to FCA qui tam provisions could impact enforcement, creating uncertainty for providers while compliance risk remains high in the near term.

The False Claims Act (“FCA”) has long been the federal government’s most powerful tool for combating healthcare fraud and, historically, FCA enforcement has remained robust regardless of which party occupies the White House. The early data from this administration, however, presents a paradox that healthcare providers and compliance officers should study carefully: record-breaking recoveries alongside unprecedented institutional disruption at the U.S. Department of Justice (“DOJ”). Understanding both sides of this equation is essential for providers assessing their current risk posture. Indeed, the buzz at recent white-collar and healthcare fraud conferences has been that the enforcement tide is receding, and that DOJ is distracted, understaffed, and focused elsewhere. As discussed below, that narrative captures part of the picture but dangerously oversimplifies the rest.

By the Numbers: A Record-Setting Year

Fiscal Year 2025 was, by the data, the most consequential year in the FCA’s 160-year history. DOJ announced that FCA settlements and judgments exceeded $6.8 billion, more than doubling the prior year’s $2.9 billion total and surpassing the previous single-year record set in 2021. Healthcare and life sciences dominated enforcement activity, accounting for more than $5.7 billion, roughly 83%, of total recoveries, a significant increase from 60% the prior year. Whistleblower-initiated qui tam filings also reached unprecedented levels, with 1,297 new suits filed, a figure that not only surpassed the previous record of 980 from FY 2024 but represented roughly twice the average annual filing volume over the preceding 10 years. Total new FCA matters reached 1,698, the largest number ever commenced in a single year.

In healthcare specifically, new government-initiated matters surged to 183, the highest on record, compared to just 87 in FY 2024 and 96 in FY 2023, according to DOJ’s published enforcement statistics. The administration has also continued its criminal enforcement posture. The 2025 National Health Care Fraud Takedown resulted in charges against 324 defendants for schemes involving over $14.6 billion in intended losses, more than double the prior record.

The Other Side: DOJ Attrition and Shifting Resources

These headline figures tell only part of the story. Behind the scenes, the DOJ is experiencing a staffing crisis of historic proportions. More than 5,000 DOJ employees have resigned, retired, or been fired during the first year of the second Trump administration, gutting the agency of institutional memory and experienced personnel. Federal data from the Office of Personnel Management show that 8,599 licensed attorneys left the federal government between the inauguration and November 2025, for a net decline of 6,524 accounting for new hires — dwarfing the prior record net decrease of 389 lawyers in a single year. Roughly one-third of those departing attorneys came from DOJ itself, including 2,526 lawyers who retired or quit and another 261 who left through force reductions or other separations, with only 503 new lawyers hired to replace them as of January 2026.

The departures have not been evenly distributed. DOJ’s Civil Rights Division has been gutted by resignations and retirements. The Tax Division has closed. Officials have scaled back certain categories of white-collar prosecutions while redirecting resources toward immigration enforcement, drug cartels, and the administration’s stated political priorities. Reporting indicates that DOJ shut down more than 900 cases of federal program or procurement fraud in the first six months of the administration and closed over 100 healthcare fraud cases as a result of “prioritization of resources and interests” — even as the administration publicly proclaims healthcare fraud enforcement a top priority. The DOJ’s FY 2026 budget request reflects a 7% overall reduction, with the FBI budget cut by $545 million and more than 1,500 positions eliminated, including over 700 vacant agent positions. More than 4,000 DOJ employees accepted the administration’s Deferred Resignation Program, creating savings of at least $470 million but accelerating the loss of experienced personnel.

Rank-and-file prosecutors and agents have expressed serious concern that a depleted workforce undercuts the government’s ability to identify and stop fraud, with remaining staff inheriting too many open prosecutions and investigations from departed colleagues, leaving little bandwidth for new matters.

What This Means for Healthcare Providers

For providers wondering whether the enforcement pressure is truly “off,” the answer is nuanced.

First, the FY 2025 numbers largely reflect investigations initiated before this administration took office. Multi-year healthcare fraud investigations that were already in the pipeline continue to advance, and the cases generating record-setting recoveries were years in the making. Providers with ongoing investigations should not assume those matters will simply fade away.

Second, the qui tam engine is self-sustaining and largely independent of DOJ staffing levels. Whistleblower-initiated cases, driven by an increasingly sophisticated relator bar backed by litigation financing and data analytics,  accounted for over $5.3 billion of total FY 2025 recoveries. A critical trend for providers is the unprecedented success of relators proceeding without government intervention. For the first time, more funds were recovered in healthcare FCA cases where the government declined to intervene ($2.27 billion) than in cases it joined ($2.23 billion), according to DOJ’s published enforcement statistics. DOJ’s decision not to join a case no longer indicates that the matter will go away.

That said, the pending constitutional challenge in United States ex rel. Zafirov v. Florida Medical Associates, LLC is a significant wildcard that could disrupt the qui tam engine. In September 2024, Judge Kathryn Kimball Mizelle of the United States District Court for the Middle District of Florida became the first federal judge to hold that the FCA’s qui tam provisions are unconstitutional under Article II’s Appointments Clause, finding that relators exercise significant authority on behalf of the United States without proper appointment.

The United States Court of Appeals for the Eleventh Circuit heard oral argument on December 12, 2025, before a panel of two Trump-appointed judges and a senior district judge. The questioning was notable for its skepticism toward the government’s position. Judge Luck expressed concern that a relator’s filing of a qui tam suit effectively compels the government to investigate, allowing a private person to direct the use of government investigative resources, authority he suggested “seems close” to the kind that requires appointment under Article II. Judge Moreno, drawing on his experience as a district judge, acknowledged that striking down the qui tam device might “create chaos” but observed that “sometimes the Constitution creates chaos.” The government itself shifted its position between briefs, narrowing its defense of the provisions after the change in administration — a move the panel noted at the outset of argument.

Many observers now expect the Eleventh Circuit to affirm Judge Mizelle’s holding. With a conservative-leaning Supreme Court, where Justices Thomas, Kavanaugh, and Barrett have already demonstrated willingness to consider the constitutionality question, the odds of ultimate reversal appear slim. Multiple Fifth Circuit judges have also authored concurrences questioning the qui tam mechanism, and the Third Circuit is considering the same issue in the appeal of the $1.6 billion Janssen verdict. If the qui tam provisions are struck down, the practical impact on FCA enforcement would be seismic.

Qui tam actions have historically generated the vast majority of FCA recoveries — over $50 billion since the 1986 amendments — and settlements and judgments since 1986 now total more than $85 billion. Without the private relator mechanism, the government would need to develop creative alternatives to preserve some semblance of the qui tam machine’s recovery power. One possible solution would be for DOJ to specially designate relators’ counsel as Special Assistant United States Attorneys with minimal security clearance, effectively allowing them to continue “prosecuting” their cases on behalf of the government under DOJ’s umbrella. But doing so would impose significant administrative burden on a department that is already stretched dangerously thin, requiring case-by-case vetting, supervision, and oversight at a time when DOJ can barely staff its existing docket. Healthcare providers should watch the Zafirov litigation closely, not because it provides immediate relief, but because a ruling striking down the qui tam provisions would fundamentally change the enforcement landscape in ways that are difficult to predict.

Third, despite the attrition and resource constraints, senior administration officials have gone out of their way to show that healthcare fraud enforcement remains a top priority. In May 2025, then-Head of the Criminal Division Matthew Galeotti released a new white-collar enforcement plan that places “waste, fraud, and abuse” — including healthcare fraud and fraud involving federal programs — at the very top of the government’s enforcement agenda, ahead of areas like trade and customs fraud. At the ACI 13th Annual Advanced Forum on False Claims and Qui Tam Enforcement in January 2026, David Metcalf, the United States Attorney for the Eastern District of Pennsylvania, described the FCA as an area in which the Trump administration is “expanding enforcement,” a notable contrast with the administration’s reduced enforcement posture under the Foreign Corrupt Practices Act. In her keynote address at the same conference, Brenna Jenny, Deputy Assistant Attorney General for the Commercial Litigation Branch, confirmed that DOJ will continue to pursue healthcare fraud and prioritize managed care programs like Medicare Advantage.

“Your next whistleblower could be your data,” DAAG Jenny added pointedly, emphasizing that companies should expect more data-driven cases.

The administration has also backed these statements with structural moves. DOJ and HHS relaunched the DOJ-HHS FCA Working Group in July 2025, identifying six priority lanes:

1. Medicare Advantage risk score integrity
2. Drug and device pricing
3. Network adequacy and patient access
4. Kickbacks
5. Materially defective devices
6. Manipulation of EHR systems

In January 2026, DOJ announced the creation of a new Division for National Fraud Enforcement to coordinate cross-program fraud efforts. Even as the administration streamlines the government workforce, DOJ leadership remains firm that healthcare fraud enforcement is not going away.

Fourth, the administration is deploying the FCA in new and politically charged directions that could create novel exposure for providers. Through the Civil Rights Fraud Initiative, DOJ is using the FCA to pursue entities that receive federal funds but allegedly maintain “illegal DEI” practices,  and in April 2026 announced its first resolution under this initiative, a $17 million settlement with IBM. The administration has also directed the Civil Division to investigate potential FCA violations in connection with gender-affirming care for minors billed to federal programs. And the government continues to increase its reliance on data analytics for case generation, including by creating a Health Care Fraud Data Fusion Center that leverages cloud computing, artificial intelligence, and advanced analytics to identify emerging fraud schemes.

Looking Ahead

Healthcare providers should not interpret the DOJ’s institutional upheaval as a reprieve — at least not yet. While the staffing losses and resource reallocation are significant, several countervailing forces will sustain enforcement pressure in the near term. The record-setting volume of qui tam filings means a growing queue of cases will land on the desks of whoever fills the open positions, and as the FY 2025 data makes clear, the relator bar is fully capable of, and increasingly successful at, prosecuting these cases independently. The administration’s data analytics capabilities continue to expand, enabling DOJ to do more with fewer people. Investigations that were already underway before January 2025 will continue to produce settlements and judgments well into FY 2026 and beyond.

The Zafirov litigation, however, introduces genuine long-term uncertainty. If the Eleventh Circuit affirms and the Supreme Court ultimately strikes down the qui tam provisions, the FCA’s enforcement architecture would be fundamentally altered. The private relator bar, which currently drives the majority of FCA filings and recoveries, would be sidelined absent a legislative fix or the kind of creative workaround described above. That outcome, combined with DOJ’s current staffing crisis, could produce a sustained and meaningful reduction in enforcement capacity that goes well beyond a temporary dip. Providers should be tracking the Zafirov timeline closely, as a ruling could come at any time.

In the interim, there may be a meaningful window, particularly for new investigations and matters still in the early referral stage, where reduced DOJ capacity creates slower response times, longer timelines, and more selective prosecution decisions. Providers who use this period wisely to invest in compliance infrastructure, conduct internal audits, and remediate identified risks will be better prepared regardless of the direction the legal landscape moves. Those who mistake a temporary capacity constraint for a permanent shift in enforcement philosophy, or who bank on a favorable Zafirov outcome that may never arrive, may find that lesson to be an expensive one.

We encourage our clients to continue maintaining rigorous compliance programs. Please contact a member of AGG’s Government Investigations practice with any questions about current enforcement risks or specific matters.