US Health Authorities Launch New False Claims Act Working Group to Target Healthcare Fraud

The US Department of Health and Human Services (HHS) and Department of Justice (DOJ) announced on July 2, 2025, the formation of a new False Claims Act Working Group (FCA Working Group), signaling an intensified focus on healthcare fraud enforcement. This initiative revives a similar effort established during President Trump’s first term, though details about the group’s activities during the Biden administration remained largely unpublicized.

The joint announcement outlines several priority enforcement areas that will guide the group’s efforts. These include scrutiny of the Medicare Advantage Program, investigations into drug and medical device pricing practices, examinations of barriers to patient care access, prosecution of kickback schemes, oversight of defective medical devices affecting patient safety, and monitoring of electronic health record manipulation.

“This partnership represents a significant step forward in our ongoing efforts to protect taxpayer dollars and ensure the integrity of our healthcare system,” said a senior HHS official who requested anonymity because they weren’t authorized to speak publicly about the initiative.

The newly configured working group features a more government-centric composition than its previous iteration. While the former group included private sector attorneys who had represented healthcare companies, the current formation will be jointly led by the HHS general counsel, chief counsel to the HHS Office of Inspector General (HHS-OIG), and the deputy assistant attorney general of the Commercial Litigation Branch. Representatives from US Attorneys’ offices will also participate.

The announcement emphasizes the group’s commitment to leveraging advanced data mining and analytics capabilities to identify potential fraud—a growing trend in government enforcement efforts. This approach aligns with the DOJ’s recent national healthcare fraud takedown on June 30, 2025, which resulted in charges against 324 defendants allegedly involved in more than $14.5 billion of healthcare fraud.

As part of that enforcement action, the DOJ unveiled the Health Care Fraud Data Fusion Center, a collaborative initiative bringing together experts from multiple federal agencies to employ cloud computing, artificial intelligence, and advanced analytics to detect and prosecute healthcare fraud more efficiently.

The timing is notable as it comes just weeks after xAI, Elon Musk’s artificial intelligence company, announced “Grok for Government”—a new suite of AI tools designed specifically for government agencies, including applications for healthcare use cases. While no formal connection between these initiatives has been established, the announcement indicates federal agencies may have new technological options for fraud detection.

The FCA Working Group will also evaluate “credible allegations of fraud” to determine when payment suspensions are warranted under existing regulations. This authority allows CMS and Medicare contractors to suspend payments to providers suspected of fraud after consultation with HHS-OIG and DOJ.

Another significant aspect of the announcement concerns the government’s authority to dismiss False Claims Act qui tam actions—lawsuits initiated by whistleblowers on behalf of the government. The Supreme Court’s 2023 decision in US ex rel. Polansky v. Exec. Health Res., Inc. affirmed the government’s broad authority to dismiss such cases whenever it intervenes. The working group’s specific mention of this dismissal authority suggests it may take a more active role in evaluating which whistleblower cases should proceed.

Healthcare fraud enforcement has intensified in recent years, with a record 979 qui tam lawsuits filed in fiscal year 2024. The government recovered over $2.9 billion from False Claims Act settlements and judgments in the fiscal year ending September 30, 2024.

Industry experts recommend healthcare organizations strengthen their compliance programs in response to this heightened enforcement environment. In November 2023, HHS-OIG released updated General Compliance Program Guidance, followed by industry-specific guidance for nursing facilities in November 2024. Additional guidance for Medicare Advantage organizations, hospitals, and clinical laboratories is expected later this year.

“The creation of this working group, combined with the government’s increasing use of data analytics, means healthcare providers need to be more vigilant than ever about compliance,” said Rebecca Martin, a healthcare attorney with Davis Wright Tremaine. “Self-auditing and voluntary disclosure of potential violations will be crucial risk management strategies going forward.”