anewrxForQuitam?
Health Care law Section Co-Chairs: RebeccaSiviglia – MoffittCancerCenter & DaniellaLee – EpsteinBeckerandGreen, P. C.
ifzafirov stands, thechoice isclear: buildontheSeC’ s provensuccess. ifnot, relatorswillcontinueto bringforthclaims.
If the Eleventh Circuit affirms United States ex rel. Zafirov v. Florida Medical Associates, 1 and should it be appealed, and SCOTUS agree, the federal government could ultimately lose its most powerful fraud-fighting tool, one that recovered $ 6.8 billion last year alone. 2 If qui tam is ultimately found unconstitutional— what replaces it? The DOJ’ s Corporate Whistleblower Program is expressly not designed to address qui tam. However, the SEC whistleblower program is a possible alternative.
Qui Tam, meet Article ii
In Zafirov, District Court Judge Kathryn Kimball Mizelle ruled that qui tam relators are“ Officers of the United States” exercising great authority without constitutional appointment. 3 Unlike traditional litigation where plaintiffs seek their own damages, qui tam relators prosecute claims belonging entirely to the government, with“ significant authority to conduct‘ civil litigation in the courts of the United States for vindicating public rights.’” 4 However, as Zafirov recognizes, the Appointments Clause requires officers exercising such broad authority to be appointed by the President, department heads, or courts. 5
Although the SDFL rejected a similar challenge just weeks earlier in United States ex rel. Butler v.
Shikara, 6 Judge Mizelle’ s analysis, aligns with Justice Thomas’ dissent in United States ex rel. Polansky v. Exec. Health Res., Inc. 7 posing a serious constitutional threat to qui tam litigation as we know it.
The dOJ Program Excludes Qui Tam
The DOJ Corporate Whistleblower Awards Pilot Program, launched August 2024 and revised May 2025, was never implemented to replace qui tam litigation. In fact, the program explicitly excludes qui tam-eligible conduct, 8 focusing instead on corporate fraud, money laundering and other wrongdoing where whistleblower programs don’ t exist. 9
The DOJ’ s framework also demonstrates variation in government agency creation of whistleblower incentives. The DOJ program is entirely discretionary with no judicial review, 10 requires criminal-standard proof, 11 and prioritizes individual victims before whistleblowers, meaning whistleblowers may receive nothing despite successful prosecution. 12 It also is a three-year pilot expiring in 2027. 13
The SEC model: A Constitutional Alternative
The SEC whistleblower program showcases how governmentadministered rewards effectively combat fraud in the securities industry. Established under Dodd- Frank Section 21F, it provides awards of 10-30 % when enforcement actions yield sanctions exceeding $ 1 million. 14 Unlike the DOJ program’ s criminal standard, SEC actions proceed civilly with abpreponderanceof-evidence burden.
The SEC program includes substantial procedural protections: preliminary determinations, opportunities to contest decisions, and appellate review. 15 This oversight is absent from the DOJ’ s program. Since 2012, the SEC has awarded over $ 2 billion to whistleblowers while recovering billions in sanctions. 16
For Congress to adapt the SEC framework for healthcare fraud, it would need to authorize HHS’ s OIG to administer the program for Medicare and Medicaid fraud. This preserves financial incentives driving qui tam enforcement while eliminating Appointments Clause concerns: whistleblowers will be able to provide information and receive rewards but not exercise prosecutorial authority.
If Zafirov stands, the choice is clear: build on the SEC’ s proven success. If not, Relators will continue to bring forth claims. Fortune favors the bold and the constitutionally sound. n
Continuedonpage47
4 6 M A y- J U N E 2 0 2 6 | H C B A L A W y E R