DOJ Revises False Claims Act Policies: New Limits on Guidance and Greater Scrutiny of Qui Tam Cases

On September 18, 2026, the Department of Justice (“DOJ”) announced revisions to the Justice Manual, addressing two significant issues in False Claims Act (“FCA”) enforcement: the government’s use of agency guidance documents in enforcement actions and DOJ’s authority to seek dismissal of qui tam lawsuits brought by whistleblowers.

Although DOJ characterized the revisions as strengthening FCA enforcement, the changes also establish potentially important protections for healthcare providers and other government program participants. In particular, the revised Justice Manual (1) makes clear that sub-regulatory guidance cannot itself create binding legal obligations, and (2) directs DOJ attorneys to consider whether declined qui tam cases should be dismissed rather than permitted to proceed automatically.

Agency Guidance Is Not Law

The first revision reinstates and expands upon a DOJ policy dating to 2017 concerning the government’s use of sub-regulatory guidance. The revised Justice Manual states that civil and criminal enforcement actions must be based on violations of applicable legal requirements, not merely noncompliance with agency guidance. DOJ therefore may not treat a party’s failure to comply with a guidance document as, by itself, a violation of a statute or regulation.

That distinction can be particularly significant in healthcare enforcement, where providers operate under an extensive body of CMS manuals, Local Coverage Determinations (“LCDs”), agency FAQs, billing guidance, and other materials that do not necessarily carry the force of law.

To be clear, the revision does not make those materials irrelevant. The Justice Manual expressly states that DOJ may continue using agency guidance as evidence for several purposes. For example, awareness of guidance may be used as evidence of scienter, notice, or knowledge. Guidance may also be offered as evidence concerning professional or industry standards. And where a provider agreement or government contract expressly requires compliance with particular guidance, the contractual obligation may independently make compliance relevant.

The Manual specifically identifies the Medicare Benefit Policy Manual (MBPM) and LCDs as examples of materials that may be used as evidence concerning whether healthcare services were medically “reasonable and necessary.” At the same time, the DOJ acknowledges that such use does not give those materials the force of law and that their description of the applicable standard may be contested or rebutted.

For providers and their attorneys defending FCA investigations involving medical necessity, coverage requirements, or billing standards, that distinction may become an important part of the defense analysis: What binding statute, regulation, or contractual requirement was allegedly violated, as opposed to what an agency manual or other guidance document recommends or interprets?

DOJ Will More Closely Consider Dismissal of Declined Qui Tam Cases

The second revision concerns the DOJ’s authority to seek dismissal of an FCA qui tam lawsuit filed on behalf of the government under 31 U.S.C. § 3730(c)(2)(A).

Under the revised Justice Manual, when the DOJ decides not to intervene in a qui tam case, its attorneys are instructed to assess whether the interests of the United States would be served by seeking dismissal of the lawsuit. Even when the DOJ initially decides against dismissal, it may reconsider that decision as the litigation progresses. The Manual identifies several non-exclusive grounds that may support dismissal, including:

• Curbing meritless qui tam actions;
• Preventing parasitic or opportunistic lawsuits that duplicate existing government investigations without adding useful information;
• Preventing interference with agency policies or programs;
• Protecting DOJ’s litigation interests;
• Preserving government resources where the government’s costs are likely to exceed the expected benefit; and
• Addressing serious procedural problems affecting the government’s investigation.

This does not mean that the DOJ will routinely seek dismissal whenever it declines intervention. The revised Manual expressly recognizes that a decision not to intervene does not necessarily mean DOJ has concluded that a case lacks merit. But the policy places dismissal squarely within the analysis that DOJ attorneys are expected to undertake in declined cases.

Why This Matters for Healthcare Providers

Healthcare remains the most significant area of FCA enforcement, and many healthcare investigations involve alleged violations of complicated Medicare or Medicaid requirements that oftentimes appear primarily in agency manuals and other sub-regulatory materials.

The revised policy gives providers and their counsel a clearer basis for separating binding legal obligations from agency guidance during an FCA investigation. At the same time, providers should not assume that nonbinding guidance can simply be disregarded. The DOJ has expressly preserved its ability to use such materials as evidence of scienter, notice, industry standards, medical necessity, and other elements of an FCA case.

The qui tam revisions may also provide defendants in declined FCA litigation with another avenue for engaging DOJ when a relator is pursuing claims that lack factual or legal support, conflict with an agency’s interpretation of its own program, or impose substantial costs on the government.

Taken together, the changes reinforce an important point for FCA investigations and litigation: the source of the alleged obligation matters. Providers facing allegations based primarily on manuals, LCDs, FAQs, or other agency guidance should carefully evaluate whether the government or relator can identify an underlying statutory, regulatory, or contractual requirement supporting the alleged violation.

GWB represents healthcare providers in connection with government investigations and False Claims Act litigation. If you need assistance with such a matter, contact us today.