Key Takeaways
- • DOJ issued September 18, 2026 Justice Manual updates restricting FCA enforcement to violations of binding statutes and regulations, prohibiting prosecution based solely on non-compliance with agency guidance documents.
- • Agency guidance documents (such as CMS Medicare Benefit Policy Manuals) may now only be used as evidence of knowledge or scienter; defendants retain the right to contest agency interpretations through alternative evidence.
- • DOJ broadened qui tam dismissal authority under 31 U.S.C. § 3730(c)(2)(A), requiring prosecutors to evaluate dismissal in every declination decision and permitting re-evaluation of dismissal at later litigation stages beyond the declination point.
- • Dismissal authority now extends beyond "facially meritless" cases to include actions that lack legal or factual merit as discovered during litigation progression, addressing the historic surge in qui tam filings.
- • Organizations defending against FCA investigations should identify whether alleged violations stem from binding legal requirements versus non-binding guidance, and defendants gain expanded advocacy opportunities both at declination and throughout subsequent litigation phases.
Summary
On September 18, 2026, the Department of Justice formalized significant policy changes to its Justice Manual governing False Claims Act enforcement nationwide, institutionalizing approaches announced over the preceding 18 months. The updates address two critical areas: the evidentiary role of agency guidance documents and the government's discretionary authority to dismiss qui tam actions initiated by private relators.
The revised guidance restricts prosecutors to establishing FCA violations exclusively through reference to binding statutes and regulations, eliminating reliance on "mere noncompliance" with agency guidance documents. This policy resurrects language from 2018 while incorporating limiting principles refined through subsequent administrations. Under the updated framework, guidance documents such as Centers for Medicare & Medicaid Services Medicare Benefit Policy Manuals or Local Coverage Determinations may serve as evidence demonstrating a defendant's knowledge, notice, or scienter—but cannot constitute the foundation for alleging a violation itself. Critically, the revised Justice Manual explicitly provides that awareness of a legal interpretation in a guidance document does not equate to admission that such interpretation correctly reflects binding legal requirements. Defendants may now contest agency interpretations through alternative evidence and industry standards, fundamentally altering the burden dynamics in health care and other sectors reliant on sub-regulatory guidance.
The second major revision addresses qui tam dismissals, cementing Deputy Assistant Attorney General Brenna Jenny's January 2026 directive that "section 3730(c)(2)(A) is back." The updated Justice Manual now mandates that DOJ attorneys evaluate dismissal propriety in every declination decision as an exercise of prosecutorial discretion. Significantly, the government may re-evaluate dismissal appropriateness as litigation progresses, extending the historical focus on cases that "facially" lack merit to encompass actions where deficiencies become apparent only during discovery, expert analysis, or subsequent legal developments. This broadened authority responds to historic volume increases in qui tam filings by enabling the government to focus resources on matters genuinely advancing United States interests.
These codified policies create new advocacy vectors for defendants and organizations under investigation. Rather than contesting only facial merit, defendants now benefit from opportunities to demonstrate lack of merit or failure to advance government interests at multiple junctures—at declination, during discovery, and as litigation evolves. Notably, the administration simultaneously maintains contradictory momentum by fast-tracking review of qui tam actions alleging "benefits fraud," signaling selective expansion of enforcement in priority areas. Understanding DOJ's prosecutorial perspective—not merely case merits—has become critical to effective advocacy as the department balances resource allocation against constitutional challenges to private relator standing in federal fraud enforcement.
The revised guidance restricts prosecutors to establishing FCA violations exclusively through reference to binding statutes and regulations, eliminating reliance on "mere noncompliance" with agency guidance documents. This policy resurrects language from 2018 while incorporating limiting principles refined through subsequent administrations. Under the updated framework, guidance documents such as Centers for Medicare & Medicaid Services Medicare Benefit Policy Manuals or Local Coverage Determinations may serve as evidence demonstrating a defendant's knowledge, notice, or scienter—but cannot constitute the foundation for alleging a violation itself. Critically, the revised Justice Manual explicitly provides that awareness of a legal interpretation in a guidance document does not equate to admission that such interpretation correctly reflects binding legal requirements. Defendants may now contest agency interpretations through alternative evidence and industry standards, fundamentally altering the burden dynamics in health care and other sectors reliant on sub-regulatory guidance.
The second major revision addresses qui tam dismissals, cementing Deputy Assistant Attorney General Brenna Jenny's January 2026 directive that "section 3730(c)(2)(A) is back." The updated Justice Manual now mandates that DOJ attorneys evaluate dismissal propriety in every declination decision as an exercise of prosecutorial discretion. Significantly, the government may re-evaluate dismissal appropriateness as litigation progresses, extending the historical focus on cases that "facially" lack merit to encompass actions where deficiencies become apparent only during discovery, expert analysis, or subsequent legal developments. This broadened authority responds to historic volume increases in qui tam filings by enabling the government to focus resources on matters genuinely advancing United States interests.
These codified policies create new advocacy vectors for defendants and organizations under investigation. Rather than contesting only facial merit, defendants now benefit from opportunities to demonstrate lack of merit or failure to advance government interests at multiple junctures—at declination, during discovery, and as litigation evolves. Notably, the administration simultaneously maintains contradictory momentum by fast-tracking review of qui tam actions alleging "benefits fraud," signaling selective expansion of enforcement in priority areas. Understanding DOJ's prosecutorial perspective—not merely case merits—has become critical to effective advocacy as the department balances resource allocation against constitutional challenges to private relator standing in federal fraud enforcement.
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