Shifting Federal Priorities in Health Care Enforcement: Key Considerations for Health Care Industry Members

While there was some initial uncertainty, recent developments from the US Department of Justice (DOJ) and the US Department of Health and Human Services Office of Inspector General (OIG) make clear that the federal government remains firmly committed to investigating and prosecuting health care fraud and abuse.

Federal Enforcement Landscape

Over the years, the DOJ has brought both civil and criminal actions under statutes such as the False Claims Act (FCA) and the Anti-Kickback Statute (AKS), targeting a range of conduct from improper referrals and kickbacks to questionable drug pricing practices, Medicare Advantage risk adjustment calculations and payments, and documentation and coding practices. While the DOJ has indicated that it will continue to prioritize enforcement of these types of activities, the agency has also indicated that there will be new areas of enforcement priorities identified as part of the agency’s revitalized OIG FCA Working Group. Additionally, the DOJ has put a renewed focus on health care fraud enforcement through expanded taskforces in Chicago, Illinois, and New England. Finally, while the DOJ has indicated that the agency will continue to aggressively pursue FCA cases, what constitutes a violation of the law may be different than in the past based on the DOJ’s current view regarding agency guidance documents.

FCA Enforcement Priorities and Working Group

On May 12, the DOJ reiterated the agency’s continued focus on enforcement in the health care sector with a memorandum outlining the Administration’s enforcement priorities and policies for prosecuting corporate and white-collar crimes, including combatting “rampant health care fraud and federal program procurement fraud.” On July 7, the DOJ and OIG announced the revival of their joint FCA Working Group, bringing together leaders from across both agencies to coordinate investigations, share information, and consider administrative actions such as payment suspensions. The Working Group’s announcement “[encouraged] whistleblowers to identify and report violations of the federal False Claims Act involving priority enforcement areas.”

Health Care Fraud Task Forces

Part of the DOJ’s expansion of health care fraud prosecution also includes the creation of taskforces at prominent US Attorneys’ Offices (USAOs). For example, on August 22, the US Attorney’s Office in Chicago announced the creation of a new section within the Office’s Criminal Division that will focus exclusively on prosecuting health care fraud. The new section is cross-designating attorneys to work on both civil and criminal health care matters. On September 23, the DOJ announced that it is expanding the Health Care Fraud Unit’s New England Strike Force to the District of Massachusetts. By expanding the New England Health Care Fraud Strike Force into Boston, the DOJ is providing additional resources to the Massachusetts USAO, which has a long history of success in health care fraud enforcement actions.

Guidance Documents in Enforcement Actions

While the DOJ will continue pursuing FCA cases involving violations of health care laws, it is taking a more conservative approach regarding cases that may involve violations of non-binding guidance documents. On February 5, Attorney General Pamela Bondi rescinded the July 1, 2021, DOJ memorandum entitled Issuance and Use of Guidance Documents By the Department of Justice. The 2021 memorandum explained that guidance documents “help explain an agency’s programs and policies or communicate other important information to regulated entities.” In contrast, the new memo states that guidance issued without the rulemaking process is unlawful if it purports to bind private parties or substitute for rulemaking. Guidance documents that are incorporated by statute, regulation, or provider contract will continue to be sources of legal theories in FCA litigation. For example, the DOJ will not treat noncompliance failure to comply with a local coverage determination or a Medicare manual chapter, standing alone, as “legal falsity” unless the document is expressly incorporated by statute, regulation, or a provider agreement.

Based on the new memo, the DOJ will likely re-evaluate ongoing and future FCA matters to confirm that their theories of liability do not depend on nonbinding guidance documents.

Enforcement Priorities

In announcing the reconstitution of the FCA Working Group, the DOJ and OIG also announced the following enforcement priorities, many of which reflect a continuation of prior enforcement areas:

• Medicare Advantage.

• Drug, device, or biologics pricing, including arrangements for discounts, rebates, service fees, and formulary placement and price reporting.

• Barriers to patient access to care, including violations of network adequacy requirements.

• Kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal health care programs.

• Materially defective medical devices that impact patient safety.

• Manipulation of electronic health records (EHRs) systems, such as altering records to increase billing or utilization, to drive inappropriate utilization of Medicare covered products and services.

As part of the FCA Working Group’s efforts, the agencies will identify new leads and expedite existing investigations into the priority areas, such as enhanced data mining of OIG (e.g., Centers for Medicare & Medicaid Services (CMS)) data. Similarly, the DOJ also recently noted its ongoing reliance on the Health Care Fraud Data Fusion Center, which uses cloud tools, artificial intelligence (AI), and advanced analytics to spot fraud. The use of high-powered data analytics tools increases the likelihood the DOJ will identify potential wrongdoing with respect to its enforcement priority areas.

Recent Enforcement Actions

Recent cases and settlement examples reflect the FCA Working Group’s priorities, including DOJ enforcement actions targeting Medicare Advantage risk adjustment, pricing and reporting for drugs and devices, remuneration to prescribers and referral sources, and EHR compliance.

Medicare Advantage Plans

Recent DOJ settlements show a focus on risk adjustment calculations and diagnosis accuracy submitted by Medicare Advantage Plans, both of which are tied to plan reimbursement by CMS. For example, in 2024, Independent Health agreed to pay up to $98 million for using unsupported diagnosis codes to raise risk scores, resulting in inflated payments to the plan from CMS. To do so, Independent Health created a subsidiary that reviewed charts and contacted providers to justify added diagnoses. Similarly, Cigna Group agreed to pay about $172.3 million to resolve allegations that the company was submitting inaccurate diagnosis codes, resulting in inflated risk scores, and failed to return overpayments when the company identified inaccurate diagnosis codes.

Drugs, Devices, and Biologics Pricing

Enforcement also remains active in pricing, kickbacks, and Part D reporting. In 2024, Teva Pharmaceuticals USA Inc. agreed to pay $450 million to resolve allegations that the company conspired with other generic drug manufacturers to fix prices for certain generics, including cholesterol medications. As part of the civil resolution, Teva also resolved allegations that the company violated the AKS by coordinating with third-party charitable patient assistance programs to cover patient co-payments for its multiple sclerosis drug Copaxone. Finally, Teva also entered a deferred criminal prosecution agreement and paid $225 million to resolve criminal charges related to the drug price-fixing scheme. Additionally, in July 2024, Rite Aid Corporation and 10 subsidiaries agreed to pay millions of dollars in fines for failing to report manufacturer rebates and discounts accurately in their role as Part D plan sponsors, which overstated program costs.

Kickbacks

Payments and perks to prescribers and referral sources continue to be a central focus in health care fraud prosecution. In May 2024, Innovasis paid $12 million to resolve allegations that the company provided inducements to surgeons, including sham consulting fees, excessive IP payments, equity, luxury travel, and lavish entertainment for surgeons and their families. Similarly, in January 2021, Athenahealth paid $18.25 million to resolve allegations that it offered all‑expenses‑paid trips and referral fees to health care providers to drive sales. Drug makers also continue to face scrutiny related to the provision of kickbacks. For example, this year, Gilead Sciences reached a $202 million settlement agreement following an investigation into its speaker programs admitting that the company paid high‑volume prescribers to serve as speakers at speaker programs and hosted programs at upscale venues and luxury restaurants. Also in 2025, Pfizer entered into a $59.7 million settlement to resolve allegations that the company’s wholly-owned subsidiary, Biohaven Pharmaceutical Holding Company Ltd., used speaker fees and high‑end meals to push prescriptions for Nurtec ODT. Notably, Pfizer’s settlement resolved allegations related to alleged wrongdoing that occurred prior to the company’s acquisition of Biohaven. Together, these cases show that regulators continue to focus on whether benefits to health care providers are intended to influence prescribing or referrals.

EHRs

EHR vendors continue to face scrutiny over product claims and financial inducements. In July 2023, NextGen Healthcare Inc. paid $31 million for misrepresenting certain EHR capabilities tied to meaningful use and for offering credits of up to $10,000 for referral‑driven sales. Earlier, in January 2020, Practice Fusion Inc. paid $145 million for taking kickbacks from an opioid maker to shape clinical tools toward extended‑release opioids. Practice Fusion also entered a deferred criminal prosecution agreement. The FCA Working Group’s focus on EHR systems that may alter records to increase billing or utilization indicates that AI tools will likely also face scrutiny by the DOJ, though to date, there has not been enforcement of these tools.

Ongoing Cases to Monitor

In a DOJ suit against major Medicare Advantage insurers and brokers, including Aetna, Humana, Elevance, eHealth, GoHealth, and SelectQuote, the DOJ is alleging that the defendants engaged in a kickback‑driven enrollment scheme that violated the AKS and FCA. The government’s complaint states that, between 2016 and at least 2021, the defendant insurers paid the defendant brokers hundreds of millions of dollars in illegal remuneration tied to Medicare Advantage enrollments. The alleged kickbacks were disguised as “marketing funds,” “co‑op,” “sponsorships,” and later “administrative overrides” effectively tied to enrollment volume and mix. In response to remuneration from the insurers, the brokers allegedly incentivized agents to prioritize enrollment in plans funded by the insurers, organized agent groups that could sell only those plans, and in some cases, withheld information from potential enrollees about enrollment in Medicare Advantage plans sponsored by insurers that did not offer financial incentives. Additionally, the DOJ alleges some remuneration was conditioned on reducing enrollments of disabled beneficiaries by discouraging those beneficiaries from enrolling in certain plans.

Key Takeaways for Health Care Industry Members

Federal agencies have sent strong signals that health care enforcement remains a top priority. Accordingly, to keep abreast of current federal enforcement trends and to mitigate potential compliance risks, health care industry members should:

• Regularly analyze billing and claims data for unusual patterns, using tools and benchmarks similar to those employed by federal agencies, and address any issues promptly, including returning any identified overpayments, to ensure compliance with all billing and coding requirements and to limit FCA exposure.

• Review interactions with potential referral sources, as well as discounts, and vendor relationships to ensure compliance with the AKS and Stark Law and keep thorough documentation of any safe harbor analyses.

• Strengthen oversight of EHR systems and audit processes to detect and prevent improper coding or inflated utilization.

• Maintain clear policies and procedures to protect whistleblowers and encourage internal reporting of potential compliance concerns.

• Monitor ongoing cases and settlements to track enforcement trends as they continue to evolve.

For additional information about how these enforcement trends could impact your organization, contact a member of the ArentFox Schiff Health Care group.