Health Care Fraud Enforcement Remains a Top Priority of the Administration

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There is a widely held view that the current Justice Department (DOJ) is deemphasizing white collar enforcement. While this may be true in some areas, it is certainly not the case when it comes to health care fraud. Rather, recent events have made clear that the Department is focused on investigating and pursuing criminal and civil enforcement actions related to the health care industry. The following summarizes these recent events and offers guidance on steps those in the health care industry can take to avoid being ensnared in an investigation.

First, on May 12, 2025, the head of the Department’s Criminal Division issued to all division employees a memo summarizing the division’s current enforcement priorities. In the section of the memo prioritizing how the division would prioritize white collar offenses, the top priority listed was “[w]aste, fraud, and abuse, including health care fraud and procurement fraud that harm the public fisc.” While the memo establishes priorities only for the Criminal Division, other Department components—including law enforcement agencies and U.S. Attorney’s Offices—will likely follow the Criminal Division’s lead and similarly prioritize health care fraud investigations and prosecutions. 

This summer, the Department took measures reflective of this prioritization. On July 2, 2025, DOJ and the Department of Health and Human Services (HHS) jointly announced the formation of a False Claims Act Working Group.  The working group will consist of leaders from across the two agencies (including representatives from U.S. Attorney’s Offices) and will be tasked with increasing the frequency with which HHS refers to DOJ potential violations of the False Claims Act, particularly when the matter pertains to a “priority enforcement area.” The joint announcement identified the following priority enforcement areas: (1) Medicare Advantage; (2) “[d]rug, device, or biologics pricing”; (3) “[b]arriers to patient access to care”; (4) kickbacks, particularly those “related to drugs, medical devices, [or] durable medical equipment”; (5) “defective medical devices that impact patient safety”; and (6) “[m]anipulation of Electronic Health Records Systems to drive inappropriate utilization of Medicare covered products and services.” 

The working group will also consider the circumstances in which HHS will implement a payment suspension pursuant to 42 C.F.R. § 405.371(a)(2).  The regulation, first enacted in 2011, allows the Centers for Medicare and Medicaid Services (CMS) to suspend payment to Medicare providers and suppliers based on “suspected fraud.” Before doing so, CMS must consult with HHS’s Office of Inspector General (OIG) and DOJ. However, a provider has no right to contest a suspension before the suspension takes effect.  Historically, CMS has not invoked this provision when there is pending False Claims Act litigation against the provider or supplier. Should that change, the consequences could be significant. Having payments suspended could make it financially impossible for a provider to endure the long process of contesting a False Claims Act charge. Instead, ongoing payment suspensions might drive providers to settle even marginal False Claims Act cases.

Just a few days before the announcement of the new working group, DOJ reported its largest National Health Care Fraud Takedown.  The Department has conducted these takedowns on a near annual basis in recent years. An annual “takedown” is, in essence, a Department-organized effort to simultaneously announce health care fraud enforcement actions (indictments, civil settlements, filing civil complaints, and asset seizures) in diverse and unrelated cases arising in districts all over the country. 

This year’s takedown resulted in the criminal charges being levied against 324 individuals, including 96 medical professionals. According to the government, these 324 individuals collectively sought to defraud the government of over $14.6 billion. In connection with the takedown, the government seized $245 million in cash, luxury vehicles, cryptocurrency, and other assets. Moreover, consistent with the working group’s charge to consider payment suspensions, in the month preceding the takedown, CMS suspended payments to over 205 providers, which the government estimated would result in preventing over $4 billion from being paid in response to false or fraudulent claims. The government also reported that it had: (1) lodged civil charges against 20 defendants for a total of $14.2 million in fraudulent claims; and (2) had entering into civil settlements with 106 individuals, recovering a total of $34.3 million. 

The release announcing the takedown highlighted particular cases involving the following : (1) transnational criminal organizations; (2) fraud relating to wound care; (3) prescription opioid diversion; (4) fraud relating to telemedicine; (5) fraud relating to genetic testing; (6) fraud relating to durable medical equipment; and (7) kickback schemes. 

When DOJ announced the results of the takedown, it also reported that it was creating a Health Care Fraud Data Fusion Center involving multiple Department components tasked with “leverag[ing] cloud computing, artificial intelligence, and advanced analytics to identify emerging health care fraud schemes.” The goal of this center appears to be focused on generating leads by identifying patterns suggestive of fraudulent billing.

In light of these developments, anyone working in the health care industry should remain vigilant to ensure that billing practices comply with applicable statutes and regulations. Although it has been said many times before, it is worth repeating. Providers, suppliers, and others operating in the industry should: (1) maintain a robust compliance program and educate all employees and contractors on the mechanics of the program, including specifically on the prohibition on paying or receiving kickbacks for referrals; (2) provide an avenue for employees to internally report wrongdoing, investigate any report received, refrain from taking retaliatory actions against those who make reports, and take corrective action when a problem is found; (3) regularly monitor and audit claims to ensure accuracy and legal compliance; and (4) evenly enforce disciplinary standards to deter wrongdoing. 

Individuals and businesses whose work touches upon one of the priority enforcement areas listed above should pay close attention to applicable regulations. Notably, the Department highlighted wound care as both a focus of the working group and a key priority area of the takedown. It is safe to say that more wound care-related prosecutions and False Claims Act complaints are likely to come. Providers working in this field should: (1) ensure that charts clearly document the medical necessity of wound care treatments (like skin grafts or the use of skin substitutes); (2) review the local coverage determination for skin substitute grafts set to take effect on January 1, 2026, which will allow only 8 applications of skin substitutes completed within 16 weeks; and (3) routinely audit claims relating to wound care to ensure compliance; and (4) review agreements with suppliers of wound care treatment supplies to ensure that the agreements could not give rise to Anti-Kickback statute liability.

All individuals and businesses working in any aspect of the health care field should pay close attention to the government’s planned use of data analytics to spot anomalous billing. Medical billing firms or in-house billing offices might consider investing in their own data analysis tools so that they can spot, hopefully before the government, patterns indicative of fraud. 

In short, health care fraud enforcement is not going away. It remains a priority of the Justice Department. If anything, given the potential use of payment suspensions, the consequences of being the focus of an investigation or prosecution have become even more dire. With this in mind, compliance is more important than ever.