While healthcare-related False Claims Act actions generated over $5.7 billion of the record $6.8 billion in fiscal 2025 recoveries, less than half of new DOJ cases and just over a third of new qui tam suits involved healthcare matters, signaling potential for outsized recoveries as these cases develop. Douglas W. Baruch, Kayla Stachniak Kaplan, B. Scott McBride and Jennifer M. Wollenberg of Morgan Lewis analyze the record-breaking statistics.
The DOJ recently announced that recoveries from False Claims Act (FCA) settlements and judgments in fiscal year 2025 exceeded $6.8 billion, the highest annual amount in FCA history and more than double the 10-year average.
Last year at this time, we anticipated a large number, as the DOJ under the Biden Administration had touted substantial settlements in just the first month of FY 2025. However, the amount the DOJ under the Trump Administration reported in January exceeded expectations. The FY 2025 recoveries bring the total under the FCA since 1986, when the Civil War-era statute was amended to its modern form and the DOJ started reporting these statistics, to more than $85 billion.
In addition to the record overall recoveries in FY 2025, which result from cases filed over many years, relators also set a new record with 1,297 new qui tam suits filed, breaking FY 2024’s record of 980 qui tam suits and nearly doubling the average number of new qui tam suits during FY 2010 to FY 2023. The number of new qui tam suits also was more than three times as many as the number of affirmative cases by the DOJ, which was down for the second fiscal year in a row, although still well above numbers seen prior to FY 2023. These numbers signal that qui tam actions — although subject to renewed constitutional scrutiny — remain the driver of the FCA docket.
In contrast to these record-breaking highs, the statistics show remarkably low numbers for relator share awards: in intervened cases, non-intervened cases and total. While over $5.3 billion of the FY 2025 recoveries are attributed to qui tam cases (rather than affirmative cases brought by DOJ), the total relator share award number is only $330 million, the second lowest in the past 15 years and representing just over 6% of the qui tam recoveries. To put that into perspective, the FCA typically allows a relator share award between 15% and 30% of the proceeds.
Although the DOJ did not explain this disparity in its news release or fact sheet, a number of factors could account for this seemingly low relator share percentage in FY 2025, including delayed payouts due to appeals of underlying judgments or ongoing relator share disputes (between relators and DOJ) and instances in which the judgment or settlement generating the recovery resolved claims far beyond the ones raised by the relator.
Also, the overall relator share percentage could be skewed by smaller than expected rewards in just a few high-value cases. Indeed, 10 FCA actions account for more than half of the recoveries, with one case alone accounting for nearly 15% of the total.
What should we expect from the DOJ and relators in FY 2026 and beyond?
Healthcare
Once again, healthcare-related or Health and Human Services (HHS) FCA actions generated the lion’s share of recoveries, accounting for more than $5.7 billion of the $6.8 billion. While the DOJ’s announcements describe companies and individuals across the healthcare industry as well as “success” in several areas, including “Managed Care” or Medicare Advantage/Part C and “Medically Unnecessary Care,” the bulk of recoveries in this area stem from what the DOJ describes as the “Prescription Drugs” area. Suits against pharmaceutical companies and pharmacies — under theories ranging from kickbacks to illegally paying copays to questioning the safety and efficacy of certain drugs — led to the largest recoveries, including from three cases that went to trial.
Notably, two of the trial verdicts, which together make up over 44% of the FY 2025 HHS recoveries, involve situations where the per-claim statutory penalties were disproportionately high compared to the trebled damages and are on appeal challenging these fines as excessive (among other things).
While healthcare-related recoveries have accounted for the majority of all FCA recoveries for many years — and FY 2025 is no exception — a relatively small percentage of the newly filed actions are in the healthcare space. Less than half of the affirmative DOJ cases and just over a third of the new qui tam cases in FY 2025 are healthcare cases. However, as this year’s statistics show, these cases can generate outsized and record-setting recoveries.
Department of Defense
Defense-related procurement fraud cases also had a banner year, with recoveries increasing more than six-fold from FY 2024 and resulting in the second-highest DOD number ever: nearly $634 million, just behind FY 2006’s $640 million. Even so, the bulk of this total can be attributed to a single settlement of $428 million, which was previewed last January along with the FY 2024 statistics as it occurred during the first few months of FY 2025.
Highlighting recoveries in this space, the DOJ’s materials describe allegations of false cost and pricing data, misuse of confidential government contracting and budget information to influence the award of a bid, supplying parts that did not meet military specifications,and passing along inflated subcontractor rates for various goods and services.
Although the overall recovery number was up, the numbers of affirmative DOJ cases (25) and qui tam cases (41) remain steady and in line with recent years.
Other: Cybersecurity, PPP loans, customs/trade & DEI
The overall recoveries of $532 million in the “other” (i.e., non-HHS and non-DOD) category were not as notable this year as in certain past years where housing/mortgage fraud, federal insurance fraud and certain pandemic fraud cases ballooned recoveries. However, the number of new qui tam suits in this area (798) warrants attention because it represents a more-than-200-case increase over last year and clearly is driving the record-breaking number of new qui tam cases overall. In fact, this number alone supersedes the total number of new qui tam cases — across all three categories of HHS, DOD and other — in each of FY 1987 through FY 2023.
This uptick may have been spurred, in part, by several DOJ enforcement-priority announcements in the past fiscal year that expressly encouraged whistleblower filings in areas like cybersecurity, customs/tariffs and DEI. Given these new filings, many of which remain under seal, we can expect an increase in future FCA litigation in the types of matters described below.
The DOJ highlighted recoveries of over $52 million in cybersecurity fraud settlements, touted the fact of nine cybersecurity settlements and noted that the number of settlements exceed those over each of the past two years. However, cybersecurity case recoveries remain relatively low as compared to recoveries in other areas. The largest single cybersecurity recovery described by the DOJ was only $11.2 million, which is dwarfed by resolutions and judgments in the healthcare and DOD areas. Nonetheless, the DOJ continues to describe cybersecurity requirements in government contracting as a priority enforcement area, including because of its national security connection in certain instances, and we expect to continue to see new investigations and litigation in this area.
While the DOJ attributes more than $230 million in settlements and judgments to resolving allegations of pandemic-related fraud, this number is derived from more than 200 settlements and judgments, indicating a low per-matter recovery average. This is likely because most of the allegations concern the Paycheck Protection Program (PPP), which generally involved small loans intended for small businesses and nonprofit organizations. The largest pandemic-related fraud recovery noted by the DOJ was for $20 million and involved multiple PPP loans. Even with the fading of the pandemic-era, we suspect a significant number of the “other” qui tam suits filed in FY 2025 still involve PPP loans.
The DOJ also trumpets its recently launched cross-agency trade fraud task force as well as customs and tariff avoidance cases. While the largest recovery identified in this area in FY 2025 was only $12.4 million, the DOJ previewed a recently announced FY 2026 settlement of $54.4 million as “the largest customs fraud resolution ever under the False Claims Act.” Customs/tariffs fraud cases impacted a wide range of industries, including flooring, plastics and uniform companies, as well as the allegation that a company attempted to “camouflage” aluminum extrusions as furniture kits. We expect this trend to continue upward for the foreseeable future.
Finally, even though the DOJ’s news release and fact sheet do not attribute any recoveries to its anti-DEI initiative (“Ending Illegal Discrimination”), the DOJ makes specific reference to the fact that certain of the 401 “investigations” opened by the DOJ in FY 2025 include investigations focused on the current administration’s policy objectives. Several of those DOJ investigations already are publicly known, and we anticipate that additional investigations and qui tam suits — primarily by special interest and partisan relators focused more on influencing the activity of institutions and companies than the possibility of large relator share awards — will become public in FY 2026.
Looking ahead to FY 2026 and beyond
The DOJ’s FCA statistics for FY 2025 demonstrate that FCA enforcement remains robust, both by DOJ and qui tam relators and across all sectors. Not only do we expect the typical strong focus on healthcare fraud allegations and the steady stream of traditional aerospace and defense cases, we anticipate that more companies and institutions outside of these industries will find themselves in the crosshairs of FCA allegations with the anticipated increased prevalence of PPP, cybersecurity, customs/tariffs and anti-DEI cases. These are all particular areas of focus for the DOJ and the subjects of DOJ requests for whistleblower participation. Moreover, although not specifically mentioned by the agency in its recent announcements, we separately are tracking a renewed focus by qui tam relators on colleges and universities receiving Title IV funding. We also expect AI-related issues to underlie allegations in coming years, particularly in the healthcare space.
While relators, defendants and practitioners on both sides of the “v” are anxiously anticipating that a case will soon head to the US Supreme Court for a decision on whether the qui tam provisions violate the appointments, take care and/or vesting clauses of Article II of the US Constitution, we do not anticipate a slowdown in FCA enforcement activity any time soon.
Either as a result of or ahead of a decision on constitutionality, there likely will be a concerted effort to enact a legislative “fix” to the qui tam provisions in order to strengthen and preserve this highly effective statute. In addition, the DOJ’s affirmative filings, which are unaffected by the current constitutional challenge to the qui tam provisions, are substantial and would likely increase in the event of a reduction in qui tam filings.
Douglas W. Baruch
Kayla Stachniak Kaplan
Scott McBride
Jennifer M. Wollenberg
