On September 18, 2026, the U.S. Department of Justice (DOJ) rolled out two significant updates to the Justice Manual that significantly impact False Claims Act (FCA) enforcement. The first shift restricts how prosecutors can use sub-regulatory guidance (e.g., bulletins, agency manuals, and letters) to establish liability. The second shift forces DOJ to evaluate whether to dismiss every single qui tam action it declines to join, and to keep reviewing that stance as the litigation drags on. The goal is to enforce existing laws rather than create new ones through enforcement. For life sciences companies and healthcare providers caught up in or hoping to avoid FCA probes, these updates allow for powerful new defense strategies.
Agency Guidance No Longer Enough
Under revised Justice Manual § 1-19.210, enforcement actions must be tied directly to binding statutes, regulations, or contractual obligations rather than noncompliance with sub-regulatory guidance. For Medicare-related compliance issues, this means that agency manuals, Local Coverage Determinations (LCDs), or FAQs cannot serve as the standalone legal standard that a relator or the government must prove was violated. This reform permanently incorporates into the Manual previous administration guidance policies, such as directives from former DOJ leadership, including Jeff Sessions, Rachel Brand, Merrick Garland, and Pamela Bondi.
Still, sub-regulatory guidance remains relevant in several key areas. Under § 1-19.220, a party’s awareness of guidance can still serve as evidence of notice or intent (scienter). Section 1-19.230 also allows documents like LCDs to help assess whether services were "reasonable and necessary" under 42 U.S.C. § 1395y(a)(1)(A), provided they are not presumed to establish the governing legal rule. Finally, § 1-19.250 allows guidance-based enforcement where an entity expressly certified compliance or agreed to follow it in a provider contract.
Mandatory Qui Tam Dismissal Assessments
Under 31 U.S.C. § 3730(c)(2)(A), the government holds authority to dismiss qui tam actions despite a relator’s objections. Whereas prosecutors previously merely considered dismissal upon declination, revised Justice Manual § 4-4.111 mandates that prosecutors "will in each case assess" dismissal and revisit that decision as litigation continues. Primary grounds for dismissal include shutting down groundless or copycat claims, shielding agency operations from interference, and avoiding litigation expenses that outweigh potential recoveries.
These considerations trace back to a January 2018 memo authored by Michael Granston. In United States ex rel. Polansky v. Executive Health Resources, Inc., the Supreme Court confirmed the government may move to dismiss post-declination after formally intervening under Federal Rule of Civil Procedure 41(a).
Takeaways for Healthcare Compliance and FCA Defense
Combating healthcare fraud remains a top DOJ enforcement priority. When responding to a civil investigative demand (CID) or negotiating an FCA settlement, defense teams should verify that every allegation stems from explicit statutory, regulatory, or contractual mandates. If the government's theories on liability or materiality rely exclusively on sub-regulatory guidance, § 1-19.210 provides a DOJ-sanctioned mechanism to push back early.
Defense counsel can also leverage these two policies together. Although relators frequently rely on sub-regulatory guidance, the heightened dismissal review mandated by § 4-4.111 provides defendants with a valuable avenue to urge DOJ to shut down weak, non-intervened actions. Because the Justice Manual remains non-binding internal guidance rather than substantive law, organizations must maintain rigorous compliance programs as implementation unfolds across jurisdictions.
Disclaimer: This industry insight is for general information only, is not legal advice, and does not create an attorney-client relationship.