On July 2, 2025, the Departments of Justice and Well being & Human Companies introduced a joint working group aimed toward “strengthening their ongoing collaboration to advance precedence enforcement areas” underneath the False Claims Act (FCA) – described within the announcement as “one of many authorities’s handiest and profitable instruments” for preventing fraud. In Fiscal Yr 2024, the Division of Justice recovered greater than $2.9 billion via settlements and judgments underneath the FCA, with $1.6 billion (57%) coming from healthcare-related issues.
The Departments recognized six precedence enforcement areas:
- Medicare Benefit;
- Drug, system, or biologics pricing, together with preparations for reductions, rebates, service charges, and formulary placement and worth reporting;
- Obstacles to affected person entry to care, together with violations of community adequacy necessities;
- Kickbacks associated to medication, medical gadgets, DME, and different merchandise paid for by federal healthcare applications;
- Materially faulty medical gadgets that influence affected person security; and
- Manipulation of Digital Well being Data techniques to drive inappropriate utilization of Medicare coated services and products.
A few of these priorities, like Medicare Benefit and kickback schemes, are continuations or evolutions of long-standing precedence areas for FCA enforcement. Others are extra noteworthy, like prioritization of limitations to affected person entry to care. Medicare, Medicaid managed care, and the Inexpensive Care Act impose community adequacy necessities on well being plans, and these necessities haven’t traditionally been a spotlight of FCA enforcement.
Additionally noteworthy is the Departments’ announcement that the working group will take into account probably growing CMS’ use of fee suspensions underneath 42 C.F.R. § 405.370 et seq., which allows withholding of funds upon a reputable allegation of fraud. Though CMS has lengthy had this authority, it has not been used often in FCA issues. Menace of fee suspensions following credible allegations of fraud places elevated stress on healthcare suppliers and payors going through FCA investigations and litigation. Notably, there is no such thing as a administrative course of to enchantment a suspension.
The working group may also study use of the Division of Justice’s authority to maneuver to dismiss a qui tam FCA grievance underneath 31 U.S.C. § 3730(c). The Division doesn’t train this authority often. A re-examination suggests the Division could also be contemplating elevated use of this software to maneuver to dismiss complaints that don’t align with its enforcement priorities, or elevated use of dismissal authority to weed out wholly unfounded complaints {that a} relator pursues regardless of the federal government’s declination resolution.
The Division of Justice’s announcement on the finish of Could 2025 of the formation of a Civil Rights Fraud Initiative signaled a brand new use of the False Claims Act, as mentioned in a prior weblog put up. This newest announcement makes clear that healthcare fraud stays a prime enforcement precedence. Healthcare suppliers and payors – particularly Medicare Benefit and Medicaid managed care plans – ought to carefully monitor FCA enforcement on this house.