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

Federal Agencies Strengthen False Claims Act Enforcement in Healthcare Sector

The U.S. Department of Health and Human Services (HHS) and Department of Justice (DOJ) announced plans to bolster their joint False Claims Act Working Group, signaling an intensified focus on healthcare fraud investigations and enforcement actions. The July 2, 2025 announcement outlined several high-priority enforcement areas that will receive particular scrutiny in the coming months.

Medicare Advantage programs top the list of enforcement priorities, reflecting growing concerns about potential fraud within the popular alternative to traditional Medicare that now serves over 30 million Americans. The agencies will also target questionable practices related to drug, device, and biologics pricing, including arrangements for discounts, rebates, service fees, formulary placement, and price reporting.

Other key enforcement areas include barriers to patient access to care, with special attention to violations of network adequacy requirements that ensure patients can access needed services. The working group will investigate kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs – a persistent problem that costs taxpayers billions annually.

Patient safety concerns will drive investigations into materially defective medical devices, while manipulation of electronic health records systems to drive inappropriate utilization of Medicare-covered products and services will also face heightened scrutiny.

This healthcare-focused initiative complements broader DOJ Civil Division enforcement priorities outlined by Assistant Attorney General Brett A. Shumate in his June 11, 2025 memorandum. Shumate’s directive emphasized combating discriminatory practices, ending antisemitism, protecting women and children, ending sanctuary jurisdictions, and prioritizing denaturalization cases.

The revitalized Working Group represents a significant enhancement of cross-agency collaboration between HHS and DOJ. Officials plan to employ sophisticated data mining techniques and leverage findings from HHS Office of the Inspector General (OIG) reports to identify potential violations. The group will also discuss implementation of payment suspensions under federal regulations (42 C.F.R. § 405.370 et seq.), which can be triggered by credible allegations of fraud.

This announcement comes amid growing federal concern about healthcare fraud. In 2024, the government recovered over $3 billion from False Claims Act cases, with healthcare fraud accounting for approximately 90 percent of those recoveries. The Medicare Advantage program has become a particular focus as enrollment has surged and questions about risk adjustment practices have emerged.

Healthcare industry analysts note that this enhanced enforcement effort reflects the Biden administration’s continued emphasis on healthcare access and affordability. The focus on network adequacy requirements and barriers to patient care signals particular concern about insurance practices that may limit patients’ ability to receive covered services.

For pharmaceutical companies, device manufacturers, and healthcare providers, the strengthened working group presents significant compliance challenges. The emphasis on pricing arrangements, kickbacks, and electronic health record manipulation targets areas where complex regulations have created gray areas that some entities have sought to exploit.

Industry stakeholders are advised to implement proactive compliance measures focused specifically on these priority areas. Companies operating in the healthcare space should review their pricing practices, marketing arrangements, electronic records systems, and quality control processes to ensure they align with federal requirements.

Legal experts caution that False Claims Act investigations can result in substantial penalties, including treble damages and per-claim penalties that can quickly escalate into millions of dollars. Beyond financial consequences, companies under investigation often face reputational damage and increased scrutiny from regulators, investors, and patients.

With federal agencies now coordinating more closely and employing advanced data analytics to identify suspicious patterns, the healthcare industry can expect a new era of aggressive enforcement in the coming months.