New Federal Task Force Intensifies Healthcare Fraud Enforcement Efforts

In a significant move signaling heightened scrutiny of the healthcare sector, the U.S. Departments of Justice (DOJ) and Health and Human Services (HHS) announced the formation of a new False Claims Act Working Group on July 2. This initiative represents a formalized partnership aimed at combating healthcare fraud and aligns with the current administration’s priority to address waste, fraud, and abuse in government spending.

The Working Group brings together representatives from multiple federal agencies, including the HHS Office of General Counsel, the Centers for Medicare and Medicaid Services (CMS) Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (HHS-OIG), and DOJ’s Civil Division, along with representatives from U.S. Attorney offices.

Industry analysts note this collaborative structure represents a strategic shift in enforcement approach. The inclusion of CMS officials alongside HHS-OIG members demonstrates a deliberate effort to hear potential fraud issues directly from program operators rather than relying solely on inspector general oversight. This marks a departure from historical practice where HHS-OIG typically served as the lead representative for HHS on FCA matters.

The leadership trio steering the Working Group includes Acting HHS General Counsel Sean R. Keveney, Acting Chief Counsel to HHS-OIG Susan Edwards, and Deputy Assistant Attorney General Brenna E. Jenny. Jenny’s appointment is particularly noteworthy, as she recently replaced Michael Granston, who served at DOJ for nearly three decades. Her background includes experience as a partner at Sidley Austin handling FCA defense cases, as well as roles as deputy general counsel of HHS and chief legal officer of CMS.

The Working Group has identified several priority enforcement areas for FCA violation referrals, including Medicare Advantage, drug and medical device pricing, barriers to patient access to care, kickbacks related to healthcare products, defective medical devices affecting patient safety, and manipulation of Electronic Health Records systems.

To enhance investigation efficiency, the Working Group plans to leverage data mining and analytics to identify potential enforcement targets more proactively. This approach aims to protect federal healthcare programs before fraudulent payments are made, moving beyond the traditional “pay-and-chase” enforcement model.

Healthcare fraud has consistently been a primary focus for federal enforcement. During fiscal year 2024, the DOJ recovered $2.9 billion through FCA actions, with $1.68 billion specifically coming from healthcare fraud cases. The previous fiscal year saw $1.86 billion recovered from healthcare FCA cases.

Recent high-profile enforcement actions underscore the government’s commitment in this area. In March, Seoul Medical Group agreed to pay more than $62 million to settle FCA claims related to false diagnosis codes submitted to increase Medicare Advantage payments. In May, DOJ filed a complaint against several large health insurance companies and insurance brokers alleging FCA violations connected to illegal kickbacks.

During a July 2 American Health Law Association panel, Brenna E. Jenny stated that the Working Group will assess “early whether novel legal theories are viable and supported by leadership.” This statement may provide some reassurance to healthcare companies that the Working Group intends to dismiss meritless qui tam complaints that could otherwise hamper legitimate business operations.

The formation of this Working Group comes amid a broader intensification of healthcare fraud enforcement. In May, the Criminal Division’s head Matthew R. Galeotti issued a White-Collar Enforcement Plan specifically identifying healthcare fraud as a high-impact priority area. Additionally, a record-breaking healthcare fraud “takedown” announced on June 30 resulted in criminal charges against 324 defendants, including 96 healthcare professionals.

For healthcare companies, including insurers and manufacturers of pharmaceuticals, medical devices, and supplies, the Working Group’s establishment serves as a clear warning of increased scrutiny. Companies should proactively review and strengthen their compliance programs, anti-fraud policies, and internal monitoring systems to identify potential issues before they attract government attention.

The Working Group’s announcement specifically “encourages whistleblowers to identify and report violations” in priority enforcement areas, signaling a likely increase in qui tam complaints. Healthcare industry experts recommend that companies implement robust internal auditing processes and data monitoring to identify and address outliers before they trigger government investigations.