New NIH Certification Requirement May Pose Increased FCA Risk

On April 21, 2025, the National Institutes of Health (NIH) issued notice NOT-OD-25-090 (Notice) that requires all domestic NIH grant recipients of new, renewal, supplemental, or continuation awards issued on or after the date of the Notice, recipients of other transaction awards, and parties to cooperative agreements to certify that:

(i)  They do not, and will not during the term of this financial assistance award, operate any programs that advance or promote DEI, DEIA, or discriminatory equity ideology in violation of Federal anti-discrimination laws; and

(ii) They do not engage in and will not during the term of this award engage in, a discriminatory prohibited boycott.

The phrase “discriminatory equity ideology” is taken from an Executive Order directed at “Ending Radical Indoctrination in K-12 Schooling” and reflects the Trump administration’s view of discriminatory practices, while the term “boycott” refers to any boycott of Israel. Recipients risk both (1) claims of contractual breach if they certify but are found to have not complied, and (2) complicating their litigation position if they wish to defend pedagogic and other practices that differ from the required certification.

Per the Notice, all recipients of NIH funding in the U.S. must comply with “all applicable Federal anti-discrimination laws material to the government’s payment decisions for purposes of 31 U.S.C. § 3729(b)(4)” — citing to the definition of “material” in the False Claims Act (FCA).

Although the Notice is new, the “false certification theory” is a well-trodden theory of FCA liability, as are FCA cases against federal grant recipients. ¹ Under the false certification theory, a defendant can be held liable if it knowingly submits a false certification that it has complied with a statute, regulation, or other legal requirement in seeking a payment from the government. The defendant must also know that non-compliance with that legal requirement was material to the government’s payment decision. See Universal Health Servs. v. United States ex rel. Escobar, 579 U.S. 176, 181 (2016).

This new certification requirement, combined with the language indicating that compliance with “Federal anti-discrimination laws” is material to government payment decisions, has put NIH grant recipients squarely within the FCA’s crosshairs, and thus at a potentially higher risk of FCA enforcement. But as Qui Notes observed in our February 2025 Blog, Escobar also cautioned that “the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive,” in the FCA materiality analysis. In addition, the post noted: “[A]n honestly held, good faith belief in a certification’s truthfulness is a strong defense to liability. Further, many circuits have held that the FCA requires ‘an objective falsehood’ and that differences in interpretation growing out of a disputed legal question are not false under the FCA.”

NIH grant recipients should continue to review existing policies, practices, training materials, and programs to ensure compliance with anti-discrimination laws. If and when grantees are required to submit the required certification, it would be prudent to establish and follow internal controls relating to any such certification (e.g., similar to controls in place for certifying current cost and pricing data in applicable contracts). Grantees may also want to consider qualifying the certification with the phrases “to the best of [the grantee’s] knowledge” and “as applicable and authorized under Federal laws” to limit its scope.

Stay tuned: Qui Notes will continue to provide updates on all key FCA developments.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.