The Administrative False Claims Act (AFCA), enacted in December 2024, expands agency authority and recovery limits, making the AFCA a more powerful tool for recouping government funds lost to alleged false claims—a significant overhaul of the seldom-used predecessor statute, Program Fraud Civil Remedies Act of 1986.
Since the AFCA’s enactment, agencies have begun implementing it through rulemaking. Some agencies have issued final rules, like the U.S. Nuclear Regulatory Commission and the U.S. Postal Service, both of which issued final rules effective July 17, 2025. Other agencies have published proposed rules, like the Federal Labor Relations Authority, with a public comment period through September 8, 2025. Others have taken a middle-of-the-road approach, like the Railroad Retirement Board, which published a final rule effective August 15, 2025, unless adverse comments were received by July 16, 2025 (they were not).
Understanding the key aspects of the AFCA is important for healthcare stakeholders, contractors, and legal and compliance professionals navigating the evolving government enforcement landscape. Below are the top 10 things to know about the AFCA.
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The AFCA Allows Agencies to Investigate False Claims Made by Government Contractors
Under the AFCA, administrative agencies are granted enhanced authority to investigate potential false claims by government contractors, without relying solely on the DOJ. This shift may open the door to more investigations at a faster clip, with broadened opportunities for financial recoveries for the government.
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Enhanced Subpoena Power, but DOJ Approval Required to Initiate Administrative Proceedings
Similar to the federal False Claims Act, 31 U.S.C. § 3729 (FCA), the AFCA grants administrative agencies subpoena power, enabling them to compel the production of documents and testimony during investigations. The agency’s “investigating official” must transmit their findings to a “reviewing official” within the agency who independently determines whether there is adequate evidence of a false claim. If there is, the reviewing official refers the matter to DOJ for approval to commence administrative proceedings.
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The AFCA Covers False Claims and Reverse False Claims
Like the FCA, the AFCA expands the definition of false claims to include reverse false claims, allowing agencies to pursue those who conceal or improperly avoid or decrease an obligation to pay or transmit property, services, or money to the government. The AFCA conforms the definition of “obligation” with that in the FCA.
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No Whistleblower Qui Tam Provision
A key distinction from the FCA is that the AFCA does not include a qui tam provision allowing private individuals (whistleblowers) to initiate lawsuits on the government’s behalf. In the absence of qui tam rights, agencies retain centralized enforcement authority, potentially insulating the AFCA from the constitutional challenges now looming over FCA’s qui tam provisions.
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Extended Statute of Limitations
The AFCA aligns its statute of limitations with that of the FCA, requiring actions generally to be brought within six years of the violation or within three years of when material facts were known or reasonably should have been known “by the authority head”—but in no case more than ten years after the alleged violation.
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Increased Monetary Recovery Thresholds
The AFCA raises the monetary threshold for claims that agencies can pursue administratively from $150,000 to $1,000,000, with provisions for future adjustments to account for inflation. This change, together with the longer statute of limitations, significantly expands the number and value of cases agencies can pursue on their own.
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The AFCA Allows Double Damages
The AFCA authorizes agencies to recover double damages for false claims. While less than the treble damages recoverable under the FCA, this adjustment marks a shift from merely compensatory to moderately punitive enforcement.
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The AFCA Imposes Lower Civil Penalties than the FCA
The AFCA imposes civil penalties of up to $5,000 for each false claim or false certification, which is far less than the FCA’s penalty range of $14,308 to $28,618 per claim. This adjustment is intended to align penalties with the scale of administrative proceedings while still preserving deterrence aims.
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Recovery of Investigation and Prosecution Costs
Administrative agencies can recoup costs for successfully investigating and prosecuting cases under the AFCA. Such costs are credited first from collected recoveries, incentivizing agencies to pursue investigations.
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Redistributing the DOJ’s Workload
By shifting smaller-scale investigations to administrative agencies, the AFCA allows DOJ to focus on high-stakes fraud investigations with national or systemic impact.
* The author would like to thank Law Clerk Jaden Thornton for his assistance in writing this alert.