The wait is over: The False Claims Act is constitutional, and why self-disclosure matters

On September 1, 2026, the United States Court of Appeals for the Eleventh Circuit released its long-anticipated Opinion in United States ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, et al., Case No. 24-13581 (11th Cir. Sept. 1, 2026). At issue was whether or not the False Claims Act’s qui tam (whistleblower) provisions were constitutional. While three of the Constitution’s clauses were raised (Appointments Clause, Take Care Clause and Vesting Clause), the three-judge panel only addressed the Appointments Clause and remanded other issues back to the District Court for consideration.

The Opinion’s key takeaway: “We disagree and hold that relators are not officers of the United States because they do not occupy a continuing position established by law. Accordingly, we join our sister circuits that have addressed this issue and hold that the qui tam provisions of the FCA do not violate the Appointments Clause.” (emphasis added). In sum, the whistleblower lawsuits that are brought under the False Claims Act remain constitutional.

This brings us to an equally important item: self-disclosing allegations of False Claims Act (FCA) violations before a whistleblower lawsuit is filed or the U.S. Dep’t of Justice (DOJ) files a FCA suit on its own. A recent $541.5 million settlement with The Villages Health System, LLC (TVH) underscores why corporate counsel and defense counsel should consider this option.

On August 26, 2026, the DOJ announced that TVH “self-disclosed allegations that it violated the False Claims Act by causing the submission of false diagnosis codes in order to increase payments that they received from the Medicare Advantage program.” Here are the salient facts and notion of the cooperation credit that was gained through self-disclosure:

• On Dec. 27, 2024, TVH made a submission pursuant to the HHS-OIG’s Health Care Fraud Self-Disclosure Protocol disclosing that it had submitted invalid diagnosis codes to multiple MAOs for certain beneficiaries enrolled in their plans and that these diagnosis codes increased the capitated payments made by CMS to the MAOs under the MA program.
• Over a four-year period, “[t]he diagnosis codes were invalid because they did not have adequate support in the patient’s medical record or were based on amendments to the medical record that were not initiated by the rendering provider and were not timely or were not approved by the rendering provider. TVH’s knowing submission of the unsupported and/or undocumented codes identified above caused CMS to make inflated payments to the MAOs, which inflated the MAOs’ payments to TVH.”
• The settlement could have been even higher but for the self-disclosure. “In connection with the settlement, the United States acknowledged that TVH took a number of significant steps entitling them to credit for cooperating with the government. TVH promptly took remedial actions and self-disclosed the invalid diagnoses to HHS-OIG. TVH also provided the government with a detailed and thorough written disclosure and cooperated with the government throughout its investigation.” (emphasis added).

Notably, in an August 13, 2026 DOJ Memorandum, health care fraud is highlighted as a top enforcement area. Medicare Part C fraud continues to be an enforcement priority because, “Medicare Part C is now the largest component of Medicare, both in terms of federal dollars spent and the number of beneficiaries impacted, the work of the Justice Department in this area is of critical importance.”

In sum, the Eleventh Circuit joined all other U.S. Courts of Appeals that have addressed the constitutionality of the FCA’s qui tam provisions and upheld that whistleblowers are not officers appointed by the Government. The TVH self-disclosure and settlement, which was not insignificant, highlight that “[v]irtue is bold, and goodness never fearful.” (Measure for Measure, Act III, Scene 1).

Rachel V. Rose, J.D., MBA, advises clients on compliance, transactions, government administrative actions and litigation involving health care, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rose can be reached through her website, www.rvrose.com.