Early signs from the initial months of the Trump administration indicate that fraud and abuse enforcement related to the Medicare Advantage program (“MA”) remains a bipartisan focus, as evidenced by the recent statements from the new administration and reports that UnitedHealth Group (“UHC”) is subject to a U.S. Department of Justice (“DOJ”) investigation concerning its MA billing and coding practices.1 It is clear that MA enforcement will remain a priority for the Trump administration, though it remains to be seen whether changes to federal agency staffing will pose impediments.
Bipartisan Focus
During both the Trump and Biden administrations, government action and reports consistently highlighted fraud and abuse within the MA program, with a particular focus on large payers and providers.
During the first Trump administration, the Office of Inspector General for the U.S. Department of Health and Human Services (“HHS-OIG”) frequently secured settlements related to the MA program, often with providers accused of submitting inaccurate information to MA organizations to increase risk scores for patient populations without adequate medical support. For example, in 2017, after securing a settlement with a provider of managed care services, HHS-OIG and DOJ officials affirmed their commitment to investigate and hold managed care organizations accountable for fraud.2 In 2018 and 2019, DOJ settled with providers for allegedly providing inaccurate information that caused MA plans to receive higher payments.3 These priorities continued into the Biden administration.4 In 2024, the then DOJ Principal Deputy Assistant Attorney General for the Civil Division, Brian M. Boynton, emphasized that protecting MA was a significant healthcare fraud priority for the department.5
This sentiment has been echoed by the current Trump administration, which has continued to prioritize MA fraud enforcement. In her confirmation hearing, Attorney General Pam Bondi confirmed to Senator Chuck Grassley that she would defend the constitutionality of the False Claims Act and ensure that there are the resources necessary to enforce it.6 On February 20, 2025, DOJ Director of the Fraud Section in the Civil Division Jamie Yavelberg and Deputy Assistant Attorney General Michael Granston indicated in prepared statements at the Federal Bar Association’s annual Qui Tam Section Conference that the DOJ intends to prioritize enforcement against MA organizations and to focus on upcoding risk adjustment practices. On February 21, the Wall Street Journal reported that DOJ is conducting an investigation into UHC’s historical billing and coding operations.7 And most recently, during his confirmation hearing for Centers for Medicare and Medicaid Services (“CMS”) Administrator, Dr. Mehmet Oz strongly endorsed continued enforcement in the MA space, stating that MA fraud “will be one of the topics that is relatively enjoyable to go after, because . . . there is bipartisan support” and “[t]here’s a new sheriff in town.”8
Providers, Vendors and First Tier, Downstream, & Related Entities
Enforcement of fraud and abuse laws in MA have targeted the largest payors, but key enforcement actions have revealed that First Tier, Downstream, & Related Entities (“FDRs”), vendors and providers are not safe from federal scrutiny given their essential role in the MA program.
A notable example is the matter involving DxID LLC, a wholly owned subsidiary of Independent Health Corporation. DxID allegedly provided services to Independent Health Corporation to search medical records and query physicians for information that would support additional diagnoses. Independent Health Corporation and DxID settled for submitting these allegedly invalid diagnosis codes to generate higher risk scores for MA enrollees.9 The settlement agreement required Independent Health Corporation to pay up to $98 million (comprising a mix of $34.5 million guaranteed payments and payments contingent on Independent Health’s financial performance) to resolve the allegations, highlighting the significant financial and reputational risks associated with non-compliance. This case underscores that enforcement efforts extend beyond the major insurance companies to include vendors and other entities involved in the MA program.
More recently, Oak Street Health, a primary care platform, entered into a settlement with DOJ in September 2024 for $60 million to resolve allegations under the False Claims Act that it paid third-party insurance agents in exchange for recruiting MA beneficiaries to Oak Street Health’s primary care clinics in violation of the Anti-Kickback Statute.10 If bipartisan support for other forms of MA enforcement are any indication, FDR and provider enforcement will likely continue as well.
Enforcement Resources
Despite early indications that MA enforcement remains a priority, it remains to be seen whether the federal government will have the resources to carry out ambitious enforcement goals effectively. The Department of Government Efficiency (“DOGE”), led by Elon Musk, has implemented significant workforce reductions at federal agencies, including the Department of Health and Human Services (“HHS”) and its sub-agencies like CMS and the FDA.11 Although official numbers are not yet available, estimates suggest that at least 20% of staff in each CMS division have been terminated.12 On February 26, 2025, directors of the Office of Management and Budget and the Office of Personnel Management circulated a memo requiring all agency heads to “undertake preparations to initiate large-scale reductions in force” and reorganization plans no later than March 13, 2025 with “phase 2” plans by April 14, 2025 outlining “a positive vision for more productive, efficient agency operations going forward.”13 Phase 2 plans should be planned for implementation by September 30, 2025.14 On March 27, HHS announced it will terminate 10,000 full-time employees.15 The same day, the Washington Post reported that an internal White House document contains plans for federal agencies to lay off between eight and 50 percent of their employees.16
This understaffing could impact the federal government’s ability to carry out enforcement priorities at the same level as the Biden administration. Trump administration officials such as Attorney General Pam Bondi have said that this will not be an issue, but if enforcement targets remain significant while federal resources are slashed, targets of enforcement could be subject to drawn-out investigations while they wait on overburdened federal investigators to complete their review and negotiate the terms of any settlement or pursue litigation. Notably, however, even if the federal government has limited resources to pursue cases, qui tam relators will continue to bring cases forward and are authorized by statute to pursue such cases on the government’s behalf if the government declines to intervene. This could mean that more matters will proceed without government intervention.
Key Takeaways
The early days of the Trump administration have shown that MA enforcement remains a priority across the aisle, with both the DOJ and CMS indicating that it will remain a priority. Whereas FDRs and MA organizations may have historically had more of CMS’s support, recent language from the nominee for CMS Administrator, Dr. Oz, shows that he intends for CMS to take an active role in MA fraud and abuse enforcement related to these stakeholders. Despite the change in administration, stakeholders can expect continued scrutiny and enforcement actions, particularly targeting large payers. The evolving trends in federal agency staffing and resources present challenges, but the commitment to combating MA fraud and abuse remains. As the MA program continues to grow, stakeholders should remain vigilant and invest in robust compliance safeguards to navigate the complex regulatory landscape and mitigate the risk of fraud and abuse.
