DOJ and HHS Launch False Claims Act Working Group to Combat Healthcare Fraud

Federal authorities have announced a significant escalation in their fight against healthcare fraud with the formation of a specialized joint task force. The Department of Justice and Department of Health and Human Services revealed on July 2, 2025, the creation of a False Claims Act Working Group dedicated to enhancing enforcement efforts across the healthcare sector.

The initiative represents a notable intensification of the Biden Administration’s ongoing prioritization of healthcare fraud enforcement, building upon priorities outlined in the Civil Division’s memorandum from June 11, 2025.

According to officials, the Working Group aims to accelerate existing investigations in six priority areas, with plans to leverage advanced data mining techniques to identify potential violations more efficiently. This technological approach signals a shift toward more sophisticated detection methods in combating healthcare fraud.

The six priority enforcement areas identified by the Working Group cover a broad spectrum of healthcare operations. Medicare Advantage—the increasingly popular alternative to traditional Medicare that now covers millions of American seniors—tops the list of enforcement priorities.

Drug, device, and biologics pricing will face heightened scrutiny, particularly arrangements involving discounts, rebates, service fees, formulary placement, and price reporting. This focus comes amid growing public concern over pharmaceutical pricing practices and their impact on healthcare costs.

The Working Group will also target barriers to patient access to care, including violations of network adequacy requirements, which ensure patients have sufficient access to providers within their insurance networks.

Kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs remain a priority area, continuing the government’s longstanding focus on improper financial relationships in healthcare.

Patient safety concerns have prompted the inclusion of materially defective medical devices on the priority list, while manipulation of electronic health records systems to drive inappropriate utilization of Medicare-covered products and services rounds out the six primary areas of focus.

Beyond these enforcement priorities, the Working Group will evaluate HHS’s payment suspension authority for “credible allegations of fraud.” Currently, the Centers for Medicare & Medicaid Services defines such allegations broadly, including tips, data mining findings, and patterns identified through audits and investigations. While this authority has been exercised previously, industry observers anticipate potential changes to how and when payment suspensions are implemented.

The Working Group will also address DOJ’s approach to dismissing qui tam complaints—lawsuits filed by whistleblowers under the False Claims Act. Brenna Jenny, Deputy Assistant Attorney General of DOJ’s Civil Division and co-leader of the Working Group, emphasized streamlining investigations, including “assessing early whether novel legal theories are viable and supported by leadership.”

This approach could signal a shift toward more efficient resolution of unfounded complaints that have historically resulted in lengthy investigations. Under current guidelines, DOJ can dismiss qui tam actions based on various factors beyond merit, including duplication with existing investigations or interference with agency policies.

The Working Group is scheduled to begin monthly meetings in July, with healthcare industry stakeholders watching closely for further developments and guidance. For companies operating in the healthcare sector, particularly those involved in Medicare Advantage, pharmaceutical pricing, or medical device manufacturing, the announcement signals the need for robust compliance programs and proactive risk assessment.

As federal authorities intensify their focus on healthcare fraud, the financial and reputational stakes for organizations facing False Claims Act investigations continue to rise, with potential penalties including treble damages and significant per-claim fines for violations.