On July 2, 2025, the U.S. Department of Justice (“DOJ”) and the Department of Health and Human Services (“HHS”) announced the formation of the DOJ-HHS False Claims Act Working Group, signaling a continued and coordinated effort to combat healthcare fraud through robust enforcement of the False Claims Act (“FCA”). Creation of this working group is the latest in a series of initiatives DOJ has announced in recent weeks involving use of the FCA to further the Administration’s enforcement priorities. See, e.g., announcement of the Civil Rights Fraud Initiative. And it is consistent with announcements from other corners of DOJ demonstrating that healthcare fraud remains a key focus of this Administration. See, e.g., the Criminal Division’s White-Collar Enforcement Plan, in which health care violations dominated the list of priority areas. See our alert here.
What To Know About the New Working Group
- Membership: The DOJ-HHS False Claims Act Working Group (the “Working Group”) will include senior leadership from HHS, the Centers for Medicare & Medicaid Services (“CMS”), HHS’s Office of Inspector General (“HHS-OIG”), and DOJ’s Civil Division, along with participation from U.S. Attorneys’ Offices nationwide.
- Priority Areas: The Working Group has announced six priority enforcement areas for FCA investigations and prosecutions:
- Medicare Advantage
- Drug, device, or biologics pricing (including discounts, rebates, service fees, formulary placement, and price reporting)
- Barriers to patient access to care (including network adequacy violations)
- Kickbacks related to drugs, medical devices, durable medical equipment (“DME”), and other federally reimbursed products
- Materially defective medical devices that impact patient safety
- Manipulation of Electronic Health Record (“EHR”) systems to drive inappropriate utilization of Medicare-covered products and services
- Reporting Violations: The Working Group encourages whistleblowers to report suspected FCA violations in these areas, and similarly encourages healthcare companies to self-report such violations consistent with DOJ guidance.
- Leveraging of Data Analytics: HHS will refer potential FCA violations in these priority areas to DOJ, and the Working Group will leverage data mining and cross-agency collaboration to expedite investigations and identify new leads.
- Closer Coordination: The Working Group will coordinate on whether to implement payment suspensions or seek dismissal of qui tam complaints when the government decides not to intervene, as appropriate.
Key Observations
- Largely Expected Priorities: Most of the announced priority areas are consistent with either existing FCA trends or recent Administration initiatives. Anti-Kickback Statute matters are a perennial favorite of both the government and relators bar, and DOJ has continued to focus on the Medicare Advantage (“MA”) program. As highlighted in our recent podcast, MA broker arrangements have spawned recent settlements and a significant DOJ lawsuit against major MA plans and brokers. CMS also recently announced significant changes to its MA Risk Adjustment Data Validation (“RADV”) audit program. These changes are aimed at increasing both the pace and scale of RADV audits and, as explained in our recent alert, are likely to increase the risk of follow-on FCA investigations related to submission to the MA program of unsupported diagnosis codes. In recent years, we have also seen a notable uptick in FCA investigations focused on drug and device pricing (including related to rebates and bona fide service fees), and investigations into defective medical devices resulting in allegedly false claims have been a long-standing area of focus, so the Working Group’s inclusion of these as priorities is consistent with expected trends.
- Renewed Priorities: The DOJ’s focus on manipulation of EHR systems is a renewed area of interest that may impact EHR companies and other health tech, healthcare, and life sciences companies—particularly drug and device manufacturers—who are working on EHR initiatives. DOJ has been vocal about its pursuit of EHR companies in past press releases (see here and here).
- Some New Frontiers: Although most of the Working Group’s priorities come as no surprise, the Working Group’s mention of barriers preventing access to care stands out as a new area to watch. Network adequacy violations—which occur when insurance plans, like those who offer Medicare Advantage, Medicaid, and Affordable Care Act (“ACA”) plans, fail to provide enrollees with sufficient access to necessary healthcare providers to meet their medical needs—have not been a traditional area of focus for FCA enforcement. The Working Group’s inclusion of such violations among its six priorities means that companies who offer such health plans should move quickly to take stock of the sufficiency of their provider networks.
- Potential for Increased Use of Payment Suspensions: Under 42 C.F.R. § 405.371 and its accompanying regulations, CMS has the authority to impose a payment suspension (i.e., withhold payments from a provider or supplier) when it has consulted with HHS-OIG (and, as appropriate, DOJ) and has determined that a credible allegation of fraud exists against that provider or supplier. Although a long-extant tool in CMS’s arsenal, payment suspensions have not typically accompanied FCA investigations in recent years. Their mention in the Working Group announcement may signal a shift toward use of this powerful tool, which can deprive companies of much-needed revenue while sometime quite lengthy investigations proceed and can further complicate already complex government investigations and negotiations.
- Uncertain Effect on Qui Tam Dismissals: Although the reference to DOJ’s authority under 31 U.S.C. 3730(c)(2)(A) to dismiss qui tam complaints over relators’ objections may signal that an increase in such dismissals is coming, it is far too early to say. To be sure, mention of such dismissals in an announcement focused on closer coordination between DOJ and HHS can be read as a sign that HHS would like DOJ to dismiss more declined cases, especially those that, if they proceeded, likely would result in substantial third-party discovery demands on the agency. That said, DOJ also has received increased scrutiny from Congress about such dismissals, and Senator Chuck Grassley has urged the Administration to temporarily halt these dismissals and conduct an extensive review of the DOJ’s practices in this area. Recent highly lucrative settlements and verdicts in non-intervened FCA cases may increase the pressure to use these types of dismissals sparingly.
- No mention of CIAs: Corporate Integrity Agreements (“CIAs”)—which impose compliance obligations (sometimes overseen by a monitor) such as claims reviews and enhanced training, typically over five-year periods—have long accompanied substantial FCA resolutions. There is no mention of CIAs in DOJ’s recent announcement. That could be a sign that, consistent with recent guidance from DOJ’s Criminal Division on the use of compliance monitors, see our alert here, CIAs are falling out of favor. But jumping to that conclusion based on the Working Group’s announcement alone is premature. Whether to seek a CIA in an individual case is a decision left exclusively to HHS-OIG—not one that typically involves input from DOJ—so the absence of a mention of CIAs may not be too significant in an announcement focused on increased HHS-DOJ coordination. It thus is too early to tell how this Administration will approach CIAs.
Takeaways for Health Care and Life Sciences Clients
- Prepare for Continued Scrutiny and an Uptick in Qui Tam Actions: Healthcare and life sciences companies—particularly drug and device manufacturers, EHR vendors, and entities involved in the Medicare Advantage ecosystem—should expect continued scrutiny and enforcement activity. Even in areas where enforcement is already common, an announcement by this Administration of its priority areas is a clear signal to would-be whistleblowers and the sophisticated qui tam bar that FCA actions targeting these spotlighted subjects will be well-received and potentially lucrative, which may further incentivize such filings.
- Take Internal Complaints Seriously: With relators’ counsel on the lookout for whistleblowers with knowledge of misconduct in the identified priority areas, it is as important as ever for companies to encourage employees with concerns to raise them internally, not externally. Companies are successful in this endeavor when they encourage a speak up culture, provide C-suite messaging underscoring the importance of compliance, take complaints seriously when they are raised, and—where possible—let employees who have raised concerns know that they were heard, the matter was thoroughly investigated, and served as a catalyst for remedial measures where warranted.
- Know Your Data: As DOJ’s Civil Fraud Section has done extensively in recent years, the Working Group plans to leverage data analytics to identify and bolster FCA cases. Understanding the metrics on which your company could be an outlier as compared to other similarly situated companies (and taking steps to ensure that your company’s practices in such areas are compliant and appropriately audited) can help to reduce the risk of a government-initiated FCA investigation. It is important for companies to leverage data analytics to help identify trends and potential areas of concern early.
It is worth noting that the continued focus on healthcare fraud is not limited to the United States. The UK’s “failure to prevent fraud” (“FTPF”) offense will come into force on September 1, 2025, and it presents a potentially significant new avenue of liability and enforcement risk for life sciences and healthcare companies with even a limited UK nexus. See our alerts on the FTPF offense here and here, or listen to our podcast here.
