On July 2, 2025, the Departments of Justice and Well being & Human Companies introduced a joint working group geared toward “strengthening their ongoing collaboration to advance precedence enforcement areas” below the False Claims Act (FCA) – described within the announcement as “one of many authorities’s only and profitable instruments” for preventing fraud. In Fiscal 12 months 2024, the Division of Justice recovered greater than $2.9 billion by settlements and judgments below 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 value reporting;
- Obstacles to affected person entry to care, together with violations of community adequacy necessities;
- Kickbacks associated to medication, medical units, DME, and different merchandise paid for by federal healthcare applications;
- Materially faulty medical units that affect affected person security; and
- Manipulation of Digital Well being Information programs to drive inappropriate utilization of Medicare lined 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 boundaries 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 contemplate doubtlessly rising CMS’ use of fee suspensions below 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 steadily in FCA issues. Risk of fee suspensions following credible allegations of fraud places elevated strain on healthcare suppliers and payors dealing with FCA investigations and litigation. Notably, there is no such thing as a administrative course of to attraction 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 below 31 U.S.C. § 3730(c). The Division doesn’t train this authority steadily. A re-examination suggests the Division could also be contemplating elevated use of this instrument 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 choice.
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 publish. 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 area.