DOJ and HHS Reaffirm Commitment to Fight Healthcare Fraud Through False Claims Act Enforcement

Justice Department Reaffirms Healthcare Fraud as Key False Claims Act Priority

The Department of Justice has confirmed its continued commitment to combating healthcare fraud through the False Claims Act, addressing questions raised by earlier policy directives that had omitted healthcare enforcement from listed priorities.

In a recent press release, the DOJ acknowledged its “long history of partnering” with the Department of Health and Human Services (HHS) to use the False Claims Act as “one of the government’s most effective and successful tools” in fighting healthcare fraud. This clarification comes after the Civil Division Enforcement Priorities Memorandum issued on June 11 by Assistant Attorney General Brett Shumate had emphasized five different priorities without mentioning healthcare fraud enforcement.

The earlier memorandum had prioritized combating discriminatory practices, ending antisemitism, protecting women and children, ending sanctuary jurisdictions, and denaturalization efforts. The absence of healthcare fraud from this list had raised questions about whether the administration might be shifting away from what has traditionally been a cornerstone of DOJ enforcement activity.

Healthcare industry observers can now expect continued vigilance from federal authorities, with the DOJ-HHS False Claims Act Working Group identifying several specific priority enforcement areas. Medicare Advantage, which has seen explosive growth in recent years, tops the list of targets. The program has come under increasing scrutiny as allegations of improper risk adjustment and coding practices have emerged across the industry.

Other priority areas include drug, device, and biologics pricing, particularly arrangements involving discounts, rebates, service fees, and formulary placement. The DOJ will also focus on barriers to patient access to care, kickbacks related to medical products paid for by federal healthcare programs, materially defective medical devices affecting patient safety, and manipulation of electronic health records systems to drive inappropriate utilization.

The announcement signals a potentially more aggressive enforcement approach, with the DOJ noting it may leverage HHS capabilities “through enhanced data mining and assessment of HHS and HHS-OIG report findings.” Perhaps most concerning for healthcare providers is the explicit mention of potential payment suspensions under federal regulations, a powerful tool that can create immediate financial pressure on organizations under investigation.

The DOJ has also renewed its call for whistleblowers to report potential violations in these priority areas, reinforcing the significant role that qui tam relators play in identifying potential fraud. Whistleblower-initiated cases have historically made up the bulk of False Claims Act recoveries in the healthcare sector.

Healthcare industry experts note that this announcement should dispel any notion that the administration’s interest in pursuing novel False Claims Act theories in other areas might diminish traditional healthcare fraud enforcement. Rather, the industry should prepare for continued—and potentially enhanced—scrutiny.

“The priorities set forth in the DOJ-HHS False Claims Act Working Group press release make clear that the pursuit of novel theories will not come at the expense of the DOJ’s longstanding use of the FCA to combat alleged healthcare fraud and abuse,” note legal experts familiar with the announcement.

For healthcare organizations, this means maintaining robust compliance programs remains essential. Entities should ensure they have clear response protocols established in the event they become the focus of a DOJ False Claims Act investigation.

The government recovered more than $1.8 billion in healthcare fraud settlements and judgments under the False Claims Act in fiscal year 2023 alone, underscoring the significant financial stakes involved in these enforcement actions. With this renewed commitment from the DOJ and HHS to prioritize healthcare fraud, those figures could potentially increase in the coming years.