The FCA Power Shift No One’s Talking About: Executive Authority and Whistleblower Suits
The words qui tam may not be familiar to the public, but they carry enormous weight in the healthcare industry. Under the False Claims Act (the “FCA”), any individual – whether a whistleblowing executive or an average citizen – may sue son behalf of the United States to recover funds obtained through fraud against the government. These private plaintiffs, known as relators, can receive up to thirty percent (30%) of the recovery.
In fiscal year 2023, over 85% of FCA recoveries originated from relator-initiated suits, with the government paying more than $349 million to whistleblowers. Because of the federal government’s extensive role in healthcare and the FCA’s treble damages provision, such litigation routinely results in multimillion-dollar settlements or judgments.
The Role of Qui Tam in Enforcement
Qui tam suits effectively outsource federal enforcement to private parties. The Department of Justice can wait for enterprising relators to identify and pursue potential violations – then intervene if warranted – while relators are motivated by the prospect of a substantial recovery. This dynamic has long served as one of the strongest incentives for compliance in the healthcare sector, where insider knowledge and documentation often drive enforcement outcomes.
The Constitutional Challenge: Executive Authority Under Article II
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This structure is now under renewed scrutiny in the context of ongoing debates over presential control of the executive branch. The current conservative legal movement embraces a robust interpretation of Article II, viewing all executive power, including the prosecution of enforcement actions, which is ultimately vested in the President. Under this view, private individuals directing litigation on behalf of the United States may be exercising executive authority without constitutional authorization.
This theory of executive power achieved traction in Seila Law LLC v. Consumer Financial Protection Bureau, where the Supreme Court struck down statutory protections insulating an agency head from presidential removal. Multiple Supreme Court Justices – including Justice Thomas – and academics have since expressed skepticism that the FCA’s qui tam provisions are compatible with Article II’s vesting clause.
The Zafirov Case: From Theory to Reality
This skepticism took concrete form in United States ex rel. Zafirov v. Fla. Medical Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla.). In that case, Judge Kathryn Kimball, an influential conservative jurist and former clerk to Justice Thomas, dismissed an FCA suit brought by a physician against her employer for allegedly misrepresenting patients’ medical conditions to Medicare.
Judge Mizelle held that the qui tam structure itself violated Article II because it allowed a private relator (Zafirov) to control litigation conducted in the name of the United States. By choosing whether to file suit, deciding litigation positions, and pursuing future appeals that could bind the government, the relator was, in the court’s view, exercising executive power without proper appointment. The result: the case was dismissed as unconstitutional. To exercise executive power, her case had to be dismissed.
What Comes Next
The constitutionality of qui tam litigation may now be on a fast track to the Supreme Court. The Zafirov case is on appeal to the Eleventh Circuit. If the Eleventh Circuit affirms Judge Mizelle’s decision, it would create a circuit split, substantially increasing the likelihood of Supreme Court review. Justices Kavanaugh and Barret have indicated interest in revisiting the issue, and it only takes four justices to grant certiorari.
While the Department of Justice and longtime FCA champion Senator Chuck Grassley are defending the statute’s constitutionality, the challenge aligns with a broader conservative effort to expand presidential control over all executive functions. Ironically, this theory – if fully adopted – could undermine the same enforcement tools a future administration might wish to use aggressively.
Implications for Healthcare and Beyond
If the Courts ultimately strike down the qui tam provisions, the enforcement landscape across federally funded industries – especially healthcare – would change dramatically. Companies would face enforcement risk only from direct government action, not from internal whistleblowers empowered to litigate independently.
In sum, the future of FCA enforcement – and the balance between public accountability and executive control – may hinge on how courts resolve this constitutional showdown. What began as a technical debate about Article II could soon redefine how the government fights fraud across the healthcare industry.
