The Department of Justice (DOJ) just issued a new memorandum that may reshape how the government handles False Claims Act (FCA) cases involving federally funded benefits programs. Signed by Assistant Attorney General Brett A. Shumate on May 27, 2026, the memo directs DOJ attorneys to accelerate their review and prosecution of whistleblower suits alleging fraud in Medicaid, housing, food assistance, and other state-administered federal benefits programs.
Link to The Policy The Policy
The memo flows from an executive order issued in March 2026 establishing a task force to eliminate fraud in federal benefits programs. At its core, it imposes strict new timelines on DOJ’s handling of benefits fraud qui tam cases and creates an explicit framework for fast-tracking whistleblower suits.
Here is how the new protocol works:
Link to The 60/120-Day Initial Review The 60/120-Day Initial Review
When a new benefits-fraud qui tam is filed, DOJ will aim to complete its initial review within 60 days — the statutory window under 31 U.S.C. § 3730(b)(4) — but no later than 120 days. At the end of that review, DOJ must reach one of three conclusions:
- Allow the relator (whistleblower) to proceed with the litigation, with the government supervising in the background;
- Conclude the allegations warrant further government investigation; or
- Move to dismiss the action as legally deficient or insufficiently specific.
Link to The 120-Day Investigative Period The 120-Day Investigative Period
If the government opts for further investigation, the clock starts on a second 120-day sprint. DOJ attorneys must develop an investigative plan with prompt subpoena and Civil Investigative Demand (CID) issuance, early witness interviews, and targeted information requests. Extensions require sign-off from the deputy assistant attorney general of the Commercial Litigation Branch, with any subsequent extension requiring approval from the AAG of the Civil Division.
Time will tell if these compressed periods will be internally enforced at DOJ or if extensions will swallow the rule. As it stands, the initial 60-day review is not anything technically new. After all, that is the period the statute prescribes. But as FCA practitioners and their clients know all too well, the seal period is routinely extended for months if not years. Under the policy, if the government does elect to investigate further, it will be limited to another 120 days absent higher-level approvals within the Civil Division. At a minimum, requiring that level of approval is likely to have a downstream effect on how local U.S. Attorney’s Offices handle and dispose of cases.
Link to Factors for allowing a relator to proceed Factors for allowing a relator to proceed
Interestingly, the first option — permitting “the relator to proceed with the action and to assume primary responsibility for litigating it” — does not mention the government declining to intervene. But that is precisely what it means. For the relator to proceed, the government must decline under 31 U.S.C. § 3730(b)(4)(B). That usually is welcome news to the FCA defendants and their counsel. While the relators have regular success obtaining judgments in non-intervened cases, there is rarely a scenario in which it is more advantageous for defendants when the government intervenes in the case.
The new policy appears to frame such (unstated) declinations as strategic choices, rather than an indication of lack of merit. The factors set out for determining whether to allow the relator to proceed reflect this. They include:
- The complaint alleges conduct that, if true, would constitute a violation of the FCA;
- The complaint alleges facts that are supported or corroborated by available information, including data analytics, agency information, or the relator’s inside information;
- The case involves a scheme or course of misconduct that is not novel or complex;
- The amount of the potential damages is below the settlement authority delegated to the director of Civil Fraud in Section 1(b)(4) of Civil Division Directive No. 1-15 (i.e., $10 million); and
- Aggravating factors are present, such as beneficiary harm, ongoing misuse of federal funds, or concealment or deceit by the defendant.
Link to Potential dismissal under § 3730(c)(2)(A) Potential dismissal under § 3730(c)(2)(A)
The memo explicitly notes that one option after initial investigation is for the government to move to dismiss under 31 U.S.C. § 3730(c)(2)(A). While that statutory option has long existed, it took on greater resonance after the so-called “Granston Memo” in 2018. The Granston Memo — named for its author, then-Commercial Litigation Branch Director Michael Granston — signaled that the DOJ would invoke its dismissal power more frequently and set out the factors it would consider in moving to dismiss under that section. Since then, a key portion of FCA defense advocacy has been trying to convince DOJ to exercise that option.
In recent remarks, Brenna Jenny, deputy assistant attorney general for the Commercial Litigation Branch, has emphasized the DOJ’s commitment to using its (c)(2)(A) dismissal authority in appropriate cases. It is not clear what effect the new policy will have on the frequency of such motions. One defense fear may be, however, that the newly encouraged offloading of work to relators and their counsel will effectively discourage DOJ from seeking dismissals, except in the most frivolous cases.
Link to A Whole-of-Government Approach A Whole-of-Government Approach
New matters will be referred simultaneously to the Criminal Division and the National Fraud Enforcement Division for evaluation of potential criminal charges, and to the affected agency for potential administrative action — including payment suspension — before the civil investigation is even complete.
In the most aggressive reading, a case could move from filing to an intervention or referral-to-relator decision in as few as 120 days, with a complete government investigation wrapped up within 240 days. For FCA matters, that is extraordinarily fast.
Link to What This Means in Practice What This Means in Practice
This policy has significant implications for businesses and individuals on the receiving end of a qui tam. A few key takeaways:
Link to Scope of the policy Scope of the policy
By its terms, the memo applies only to “benefits fraud,” which is defined in the memo as “actions concerning fraud on federally-funded benefits programs administered by states” (emphasis added). That last clause — administered by states — is significant. While nothing in the memo provides further context, that definition would exclude Medicare, Tricare, federal grants, and any other benefits program that is exclusively federal. The main program included is Medicaid, while other joint federal-state benefits programs would be implicated, too. That narrow focus could increase the number of Medicaid FCA cases, which are far less common than Medicare cases at the federal level and are often left to states, through state versions of the FCA, to address. It is unclear how the policy will affect cases that implicate both Medicare and Medicaid claims.
Link to Early investigation is now essential Early investigation is now essential
The memo expressly calls for early witness interviews. That has implications for how quickly defense counsel must perform their own internal investigation and prepare potential witnesses. Organizations that participate in federal benefits programs should not wait for a subpoena to begin assessing their exposure.
Link to CIDs and subpoenas may be narrower — and more aggressively enforced CIDs and subpoenas may be narrower — and more aggressively enforced
The memo directs attorneys to tailor information requests to the specific issues under investigation, which is good news for defendants who have historically faced expansive “kitchen sink” CIDs. But it also directs attorneys to move swiftly to enforce CIDs if respondents delay. Timeliness of response may matter more than previously and routine agreement to “rolling productions” may become less common.
Link to Early settlement may be cheaper settlement Early settlement may be cheaper settlement
Speed cuts both ways. The memo encourages attorneys to pull the trigger on intervention and filing even if damages are not fully developed, with refinement to come during discovery. That uncertainty could create real settlement leverage for defendants who want to resolve matters before the government has a full accounting of its losses. A proactive early resolution strategy may be worth serious consideration.
Link to More cases will go to relators sooner More cases will go to relators sooner
The memo explicitly acknowledges that this protocol will increase the number of benefits fraud cases primarily litigated by relators’ counsel rather than DOJ attorneys. While declination to intervene has never carried any formal legal weight, it was regularly used by defendants to suggest the case lacked merit. The memo will likely give relators a basis to push back on that characterization. It likely also will embolden relators, both in terms of numbers of cases brought and their litigation tactics. While the memo states that DOJ still expects to handle “the majority of incoming qui tam matters,” that expectation seems unrealistic given the policy’s other parameters and historical trends. In FY 2025, for example, non-intervened cases already accounted for nearly 43% of all recoveries. If the new policy materially increases the number of non-intervened cases, it stands to reason that that percentage will grow.
Link to Parallel criminal exposure is baked in Parallel criminal exposure is baked in
The automatic referral to the Criminal Division on all new benefits-fraud matters means that the decision to cooperate — or not — with a civil investigation carries criminal overtones from Day 1.
Link to The Bottom Line The Bottom Line
The DOJ’s new benefits fraud memo represents a meaningful shift in enforcement posture. By compressing timelines, empowering whistleblowers, and coordinating across multiple enforcement agencies simultaneously, the government is signaling that it intends to move quickly and broadly against perceived fraud in federally funded benefits programs.
For companies and individuals operating in this space, the window to get ahead of a potential investigation — through proactive compliance reviews, internal audits, and legal preparedness — is narrowing. As always in government enforcement matters, the best time to act is before a whistleblower complaint, CID, or government investigation begins.