Healthcare Industry in the Crosshairs at DOJ and HHS
Any suggestion that the Trump Administration might not be committed to healthcare fraud enforcement was definitively quashed by two recent developments. First, on July 2, 2025, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced the formation of a new Joint False Claims Act Working Group to coordinate fraud and abuse actions across several agencies. The Working Group will be staffed by members from the HHS Office of General Counsel, CMS's Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (OIG), and the DOJ Civil Division, representing a coordinated effort to reinforce and expand FCA enforcement actions. Second, in late June, DOJ announced a record-breaking 2025 National Health Care Fraud Takedown involving over $14.6 billion in alleged fraud, more than doubling the prior annual record.
Joint False Claims Act Working Group
Focusing first on the Joint False Claims Act Working Group, DOJ leadership expressly identified traditional enforcement priorities, including Medicare Advantage, kickbacks, and drug and device pricing schemes, as continued targets of FCA action. But DOJ's announcement also emphasized a focus on less traditional priority areas, including network adequacy requirements, barriers to patient access to care, and use of EMR systems to drive inappropriate utilization of care.
DOJ leadership indicated at a recent American Health Law Association conference that the Working Group will also seek to advance the Trump Administration's policy goals through the FCA. DOJ attorney Brenna Jenny, who will lead the Working Group, signaled the group may seek to enforce policy objectives reflected in executive orders related to Diversity, Equity, and Inclusion (DEI) policies, gender-affirming care, gender ideology, and combating antisemitism, consistent with the newly formed Civil Rights Fraud Initiative first announced in May. Given the volume of litigation challenging several of the Administration's executive orders and the shifting legal landscape concerning nationwide injunctions, ensuring up-to-date compliance programs will be critical for healthcare entities in preparing for potential enforcement of the administration's policy objectives.
In addition to expanding priority enforcement areas, the Working Group intends to reconsider enforcement tactics, including increased use of payment suspensions under 42 C.F.R. Section 405.730, et seq. Under the regulation, CMS has long had the authority to withhold payments upon credible allegations of fraud, but the regulation has rarely been used in the FCA context. Now, DOJ and HHS may leverage the threat of payment suspensions more frequently to increase pressure on healthcare providers and payors in active FCA litigation, who have no administrative process to appeal a payment suspension.
2025 National Healthcare Health Care Fraud Takedown
Moving to the 2025 National Health Care Fraud Takedown, DOJ touted record-breaking numbers. The Takedown resulted in criminal charges against 324 defendants, including 96 doctors and other licensed medical professionals. DOJ reported the intended loss from the fraudulent schemes totaled over $14.6 billion and the government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets. Civil settlements with 106 defendants totaling $34.3 million were also announced. CMS additionally suspended or revoked the billing privileges of 205 providers in connection with the Takedown.
DOJ highlighted one international scheme in particular, where defendants allegedly bought dozens of medical supply companies across the country and then rapidly submitted $10.6 billion in fraudulent claims to Medicare for urinary catheters and other durable medical equipment. The defendants submitted these claims by using the stolen identities and confidential medical information of over 1 million Americans. The Health Care Fraud Unit's data analysis team identified the fraudulent claims and prevented payment of all but $41 million of the $4.45 billion that was set to be paid by Medicare. Twenty-nine defendants were charged for their participation in the scheme, which involved the largest loss amount ever charged in a healthcare fraud case.
Fraudulent wound care, illegal opioid trafficking, and telemedicine and genetic testing fraud were other areas of emphasis in the Takedown. DOJ additionally announced that it was creating a Health Care Fraud Data Fusion Center to further the government's data analytics efforts in identifying potential healthcare fraud. The Data Fusion Center will bring together experts from DOJ's Health Care Fraud Data Analytics Team, HHS-OIG, the FBI, and other agencies "to leverage cloud computing, artificial intelligence, and advanced analytics to identify emerging health care fraud schemes."
Actions in Washington, Oregon, and California
In Washington, Oregon, and California, actions that were announced as part of the Takedown included: (1) a civil settlement concerning billing for injectable amniotic fluid treatments that were considered experimental; (2) a $44 million scheme to allegedly pay illegal kickbacks to marketing companies in exchange for doctors' orders of medically unnecessary orthotic braces; (3) allegedly false diagnoses and referrals of hospice patients; (4) a $2.7 million scheme to allegedly refer patients to substance abuse treatment centers; and (5) schemes that allegedly took advantage of Medi-Cal's suspension of its pre-authorization requirement to submit expensive drug claims for reimbursement.
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With its announcements concerning the new Working Group and Takedown, DOJ made clear that healthcare fraud and abuse will remain an emphasis under the Trump Administration and the FCA will remain a cornerstone of the government's enforcement efforts. Traditional priority areas will remain a focus, but expanded enforcement actions coupled with new enforcement groups and increased data analytics sophistication pose new risks and challenges to stakeholders across the industry. DWT will continue to monitor developments with the new Working Group and healthcare fraud and abuse trends.