DOJ just sent a message to anyone with information about fraud on federally funded benefits programs: We want to hear from you, and we're ready to act fast.
Yesterday, DOJ's Civil Division announced reforms to accelerate the review of False Claims Act (FCA) whistleblower complaints involving fraud against publicly funded, state-administered benefits programs, including Medicaid, the Children's Health Insurance Program (CHIP), Supplemental Nutrition Assistance Program (SNAP), Section 8 housing, Supplemental Security Income (SSI), and more.
This is a significant development for anyone filing a whistleblower complaint under the FCA, commonly referred to as a “qui tam” complaint where the whistleblower is called a “relator.” Qui tam relators are generally entitled to 15-30% of the amounts recovered by the government in their case.
More Whistleblower Litigation. The Civil Division will now complete an initial review of benefits fraud qui tam complaints within 60 to 120 days. At the end of that review, the government will decide whether to open a more extensive investigation, allow the whistleblower to take the lead in litigating the case, or dismiss complaints that lack legal merit or sufficient specificity. In particular, DOJ appears poised to permit cases with under $10 million in damages to move forward expeditiously into relator-led litigation, rather than wait on often-lengthy government investigations.
Rapid Investigations. DOJ still anticipates retaining primary investigative and litigation control over most matters, but even there, it is signaling tighter timelines. DOJ will now seek to complete any further investigation within an additional 120 days. Further investigative time beyond the second 120 days will require approval from DOJ leadership. As part of this expedited process, the reforms encourage government attorneys to consider moving from investigation to litigation once liability appears clear, rather than waiting on unproductive settlement negotiations or fully developed damages models.
All-In Approach. DOJ also announced a whole-of-government approach: New benefits fraud cases will be shared with the Criminal Division, the newly created National Fraud Enforcement Division, and the relevant federal agency — which can move to suspend payments immediately.
DOJ's announcement specifically calls out taxpayer-funded and state-administered benefits programs such as:
Fraud in these programs can involve providers billing for services never rendered, falsified eligibility documentation, kickback schemes between vendors and program administrators, and identity theft and phantom beneficiary fraud. Any of these schemes, among others, could serve as the basis for a strong FCA case.
Faster decisions. Shorter review windows means relators may know much sooner whether the government intends to engage with their case, reducing years of uncertainty. However, it may increase the odds of litigation, which can increase the burden on whistleblowers and their counsel.
More pressure on defendants. By looping in criminal prosecutors and administrative agencies, the DOJ is ensuring the government brings its full civil, criminal, and administrative resources to bear — strengthening its position and increasing pressure on defendants.
Emphasis on the complaint and initial disclosures to DOJ. Because the DOJ will now evaluate complaints more quickly, drafting a powerful complaint and initial disclosure of evidence matters more than ever.
