Key Takeaways
The DOJ will now expedite review of a subset of all newly filed qui tam complaints within 60-120 days, much faster than DOJ's typical practice which often results in cases remaining under seal for years.
Within that timeframe, DOJ attorneys are directed to make one of the following decisions: (1) permit relator to proceed, (2) determine the allegations warrant further government investigation, or (3) dismiss the qui tam under (c)(2)(a) authority.
This approach applies only to qui tam complaints alleging fraud against federally funded, state-administered benefit programs, such as Medicaid, CHIP, SNAP, WIC, housing and utility assistance programs, and others.
DOJ anticipates these changes “will increase the number of benefits fraud matters primarily litigated by relators,” which is significant given the pending constitutional litigation in several circuits challenging the validity of relators' ability to independently prosecute qui tam cases after government declination.
Brief Synopsis
As a follow-on to the March 16, 2026 Executive Order “Establishing the Task Force to Eliminate Fraud”—which established a joint task force to be chaired by the Vice President and to include representatives from a variety of agencies—the DOJ’s Civil Division announced on May 27, 2026, its intention to prioritize review of False Claims Act ("FCA") qui tam complaints alleging fraud against federally funded, state-administered benefit programs.
This announcement comes in connection with a DOJ memorandum from Brett A. Shumate, Assistant Attorney General, Civil Division, to the Civil Division’s Commercial Litigation Branch, Fraud Division—issued the same day—indicating attorneys should perform their initial review of new benefits fraud qui tam actions within the 60-day period described in 31 U.S.C. § 3730(b)(4), but in any event no later than 120 days. At the end of that time period, the memorandum says the DOJ “shall” (1) decide to permit the relator to proceed and assume primary responsibility for the litigation, with oversight from the DOJ, (2) conclude that the DOJ needs to investigate further, or (3) determine the qui tam should be dismissed pursuant to 31 U.S.C. § 3730(c)(2)(A).
The DOJ identified the following non-exhaustive list of factors to consider when determining whether to permit a relator to proceed with litigating the qui tam:
The complaint alleges conduct that, if true, would constitute an FCA violation;
The complaint alleges facts that are supported or corroborated by available information, including data, agency information, or relator's information;
The case alleges conduct that is not “novel or complex”;
The amount of potential damages is less than the settlement authority ($10,000,000) delegated to the Director of the Civil Fraud Division (see Civil Division Directive No. 1-15, Section 1(b)(4)); and
Aggravating factors are present, such as harm to beneficiaries, ongoing misuse of federal funds, or concealment by the defendant.
The memorandum states that this streamlined review will “supplement the government’s finite resources” and allow the DOJ to “concentrate its efforts on dismantling and holding accountable sophisticated actors that are responsible for the largest, most complex, and harmful fraud schemes.” Although earlier DOJ intervention could lead to greater pressure on defendants to settle, the volume of staff departures since January 20, 2025—which currently stands at just over 7,500 for the DOJ—may make it difficult for the DOJ to meet these expedited timelines and may also lead to a greater number of qui tam dismissals. On the other hand, it may lead to fewer and more compressed government investigations and, instead, a greater proportion of qui tam litigation being driven solely by relators and their counsel, which often results in more protracted and expensive discovery and motions practice, particularly when litigation funding is involved.
The Reed Smith team will be monitoring further developments related to this announcement. If you find yourself the subject of a False Claims Act investigation or lawsuit, please do not hesitate to reach out to a Reed Smith lawyer.