FCA enforcement activity likely to continue apace in 2025 according to Hogan Lovells FCA Guide

The Guide provides an overview of notable FCA developments last year and previews key issues likely to be at the forefront of this space in 2025. 2024 was another massive year for False Claims Act (FCA) enforcement with the Department of Justice (DOJ) reporting over $2.9 billion in recoveries for the fiscal year. The 558 settlements and judgments achieved in 2024 were the second highest total after 2023.

Hogan Lovells partner Maria Durant, co-editor of the FCA Guide said she expects this robust FCA activity to continue, “Prosecuting fraud, waste, and abuse enjoys strong bipartisan support both from Congress and the American taxpayers, so we expect the FCA will remain a critical tool for DOJ in the coming year.”

FCA Guide co-editor and Hogan Lovells partner Gejaa Gobena added, “If past is prologue, we can expect that the Trump administration will make some changes to FCA enforcement policies, and we explore some of those expected policy shifts, along with other developments related to FCA enforcement that we will be closely watching in 2025.”

Areas where the DOJ is anticipated to concentrate its enforcement efforts under the new administration include a sustained focus on managed care plans and private equity investors in healthcare, scrutiny of manufacturer-sponsored laboratory testing, and enforcement of cybersecurity provisions in government contracts through the Cyber-Fraud Initiative.

“We will also be monitoring how the DOJ might incorporate the work of the Department of Government Efficiency (DOGE) into its efforts to combat fraud, waste, and abuse,” Gobena said. “In the early days of the new administration, DOGE has been thoroughly reviewing government payments, with recent reports indicating that it is examining the Centers for Medicare and Medicaid Services' use of technology to identify fraud, waste, and abuse. How this will impact FCA enforcement, such as an increase in DOJ-initiated FCA investigations will be a key area to watch.”

Durant said that another important area to watch is the development of AI. “The rapid development of generative AI presents both risks and rewards for FCA enforcement,” she said. “While AI offers companies new opportunities, inadequate oversight could increase the risk of FCA liability.”

Other topics covered by the FCA Guide include:

•Update on the impact of Loper Bright on FCA jurisprudence – The Supreme Court’s decision overruling the 40-year-old Chevron doctrine has created new opportunities for FCA defendants to defend themselves in cases alleging noncompliance with agency regulations interpreting ambiguous statutes.

•Department of Justice (DOJ) Enforcement – The DOJ continued to prosecute cases under its Civil Cyber-Fraud Initiative, while forging a new era focused on manufacturer-sponsored rare disease genetic testing programs.

•Constitutionality of the FCA Whistleblower Provision comes under renewed scrutiny – In 2024, the U.S. District Court for the Middle District of Florida declared the FCA’s whistleblower provision unconstitutional, ruling that qui tam suits violate the Appointments Clause.

•The post-SuperValu role of objectively reasonable interpretations of the law – The fallout from the Supreme Court’s 2023 decision in United States ex rel. Schutte v. SuperValu Inc. continues, with the Seventh Circuit Court of Appeals expected to address whether the decision impacts falsity-based FCA defenses.

Of the $2.9 billion recovered under the FCA last year, more than $2.4 billion arose from qui tam suits pursued by either the government or relators. Ensuring continued activity in the months to come, whistleblowers filed 979 qui tam lawsuits in FY2024, the highest ever in a single year.

Hogan Lovells will be hosting a webinar to discuss the FCA Guide on Thurs., March 13.

View the FCA Guide here.