Client Alert: DOJ-HHS Joint Initiative Targets Health Care Fraud: Key Changes to Enforcement Priorities Under the False Claims Act

KEY TAKEAWAYS

• The U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Service (HHS) recently launched a formal False Claims Act (FCA) Working Group (the “Working Group”) to strengthen coordination and enforcement efforts targeting health care fraud.
• The Working Group will prioritize enforcement in specific areas of concern, including Medicare Advantage fraud, drug and device pricing schemes, kickbacks, barriers to patient care access, defective medical devices, and manipulation of electronic health records.
• This initiative reflects the Trump administration’s broader enforcement priorities, following recent DOJ actions such as the Civil Rights Fraud Initiative and the Criminal Division’s White-Collar Enforcement Plan—both of which highlight health care fraud as a top priority across civil and criminal divisions.

 

BACKGROUND

The launch of the Working Group marks a significant policy shift toward more structured and aggressive health care enforcement and is the latest in a recent series of initiatives DOJ has announced highlighting its use of the FCA to advance the administration’s enforcement priorities.  These include the recently announced Civil Rights Fraud Initiative, which focuses on targeting DEI programs through FCA enforcement, and the Criminal Division’s White-Collar Enforcement Plan, where health care-related violations featured prominently among priority areas, and which Sher Tremonte evaluated in a recent Client Alert, available here. Collectively, these initiatives underscore that the FCA is increasingly being used as a central tool in DOJ’s enforcement efforts generally and specifically within the health care industry.

KEY DEVELOPMENTS

Unlike prior informal coordination, the Working Group now institutionalizes regular collaboration among DOJ’s Civil Division, HHS’s Office of General Counsel, HHS’s Office of Inspector General, CMS’s Center for Program Integrity, and regional U.S. Attorneys’ Offices.  The group will meet monthly to coordinate investigative strategies, share data, and streamline criminal case referrals.  A central policy development is the integration of civil FCA enforcement with administrative remedies such as payment suspensions, exclusion actions, and revocations, which are expected to be pursued more frequently and concurrently.  DOJ and HHS also plan to rely heavily on data analytics, using tools like the Health Care Fraud Data Fusion Center to proactively identify enforcement targets.

Substantively, the Working Group has identified six core enforcement priorities that reflect the government’s evolving policy focus.  These include: (1) Medicare Advantage risk adjustment and coding practices, (2) drug and device pricing and rebate arrangements, (3) network adequacy and patient access violations, (4) kickbacks involving drugs, devices, and durable medical equipment, (5) defective medical devices posing patient safety risks, and (6) electronic health record (EHR) manipulation to increase reimbursement.  The explicit inclusion of EHR fraud as an FCA enforcement priority represents a notable policy expansion into the health care technology sector.  Another key policy signal is the government’s emphasis on using administrative actions—such as suspending Medicare payments—at earlier investigative stages, even before resolving civil liability.  This suggests a more aggressive approach to perceived fraud risks.

For health care organizations and practitioners, these policy developments underscore the need for proactive risk mitigation strategies.  The government is signaling that FCA enforcement will be faster, more data-driven, and more integrated with administrative remedies.  Companies in Medicare Advantage, pharmaceuticals, devices, and health care technology—particularly those with significant EHR operations—should reassess their compliance programs to address these priority areas.  DOJ also continues to promote its voluntary self-disclosure policies, now reinforced by the Working Group’s coordinated structure, which may offer avenues for mitigating penalties or avoiding FCA litigation.  Health care entities should closely monitor these policy shifts, as the government’s coordinated, analytics-based approach is likely to accelerate the pace and scope of enforcement actions.

CONCLUSION

The Working Group signals a strategic, coordinated effort by DOJ and HHS to intensify enforcement actions against health care fraud using the FCA.  Sher Tremonte LLP will continue to monitor all developments related to the administration’s change in enforcement priorities.  If you have any questions about these policies or your obligations, please contact us. Written by partners Brian Kidd, Alison Moe, and associate Kate Ghotbi.