New DOJ-HHS False Claims Act Working Group to Target Healthcare Providers in Key Areas

On July 2, 2025, the U.S. Department of Health and Human Services (HHS) announced that it is partnering with the U.S. Department of Justice (DOJ) to form a new working group focused on targeting fraud within the healthcare sector. The new DOJ-HHS False Claims Act Working Group (the “Working Group”) will target six specific “priority enforcement areas;” and, while it is focused primarily on civil enforcement, it will pursue both civil and criminal enforcement as warranted. 

Of course, the focus on combating healthcare fraud isn’t new. The HHS and DOJ have been targeting fraud under Medicare, Medicaid, and other federal healthcare benefit programs for years. The DOJ has also been active in working alongside the U.S. Drug Enforcement Administration (DEA) to target drug diversion and other prescription-related offenses. But, the HHS and DOJ’s coordination in forming the Working Group represents an evolution of these departments’ enforcement efforts; and, as the HHS notes, the current administration is “fully committed” to supporting the Working Group’s investigative and enforcement activities. 

About the New DOJ-HHS False Claims Act Working Group

The new DOJ-HHS False Claims Act Working Group will include personnel from the HHS Office of General Counsel, the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (HHS-OIG), the DOJ’s Civil Division, and U.S. Attorneys’ Offices around the country. Its ultimate focus will be on “mak[ing] referrals to DOJ of potential violations of the FCA that reflect Working Group priorities.” 

As noted above, the HHS’s announcement of the Working Group highlights six “priority enforcement areas.” These areas are:

1. Medicare Advantage (Part C)

Medicare Advantage plans provide private insurance coverage in alignment with the Medicare billing requirements. Also referred to as Medicare Part C, Medicare Advantage plans frequently bundle the coverage available under Medicare Parts A, B, and D. 

When billing private insurers under Medicare Advantage plans, healthcare providers must strictly comply with all applicable Medicare billing rules and regulations. Billing violations that can lead to scrutiny under Medicare Parts A, B, and D can lead to scrutiny under Medicare Advantage as well. Notably, along with targeting healthcare providers, the DOJ is also already targeting insurance companies and brokers for Medicare Advantage fraud under the False Claims Act. 

2. Drug, Medical Device, and Biologic Pricing

Pricing of drugs, medical devices, and biologics provided to Medicare and Medicaid recipients (among other patients) will also be a priority for the HHS and DOJ’s new joint Working Group. The HHS’s announcement specifically states that the working group will be targeting:

• Discount arrangements
• Rebates
• Service fees
• Formulary placement
• Price reporting

This diverse list of enforcement priorities means that physicians, pharmacists, clinics, hospitals, drug companies, medical device manufacturers, and others will also be at increased risk of facing scrutiny from the HHS and DOJ going forward. Discount arrangements, rebates, and service fees implicate the anti-kickback provisions of the False Claims Act (more on this below), while formulary placement and price reporting implicate other federal compliance obligations. When violations of these obligations lead to improper Medicare and Medicaid billings, they can trigger enforcement under the False Claims Act as well. 

3. Barriers to Care

The new DOJ-HHS False Claims Act Working Group will also target “barriers to patient access to care,” including specifically, “violations of network adequacy requirements.” The HHS has published guidance on network adequacy on numerous occasions (including this recent guidance on network adequacy under Medicare Advantage from CMS), and the Medicare regulations establish network adequacy requirements for all participating insurance companies and providers. 

Violations of network adequacy requirements can not only restrict patients’ access to care and limit the quality of the care they receive, but they can also deter patients from seeking care in the first place. As a result, violations of network adequacy requirements are a serious issue, and it is not surprising to see that the new Working Group will prioritize these violations going forward. 

4. Kickbacks 

The July 2, 2025 Press Release announcing the formation of the new DOJ-HHS False Claims Act Working Group states that the Working Group will prioritize kickbacks that involve, “drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs.” The False Claims Act is one of multiple federal statutes that proscribe kickbacks in the healthcare sector involving federally reimbursed funds—along with the Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act (EKRA), and Stark Law, among others. 

Under these statutes, parties on both sides of prohibited kickback transactions can face scrutiny from the HHS and DOJ. Additionally, actual payment is not required to trigger enforcement. Offers and solicitations involving proposed kickbacks can trigger enforcement as well—even if they do not lead to a prohibited transfer of funds from Medicare or Medicaid.

5. Medical Device Defects

Mass tort litigation involving alleged medical device defects has proliferated in recent years. The mass tort litigation involving allegedly defective hernia mesh is currently the second-largest multidistrict litigation (MDL) proceeding in the country, and there are numerous other ongoing cases involving medical devices ranging from breast implants to intrauterine devices (IUDs). 

Going forward, the new DOJ-HHS False Claims Act Working Group will target medical device defects as well, with a particular emphasis on those that impact patient safety. While the U.S. Food and Drug Administration (FDA) has primary oversight of the U.S. medical device market, the HHS and DOJ can pursue enforcement in cases involving program billings for non-compliant devices—and they appear poised to do so. 

6. Use of EHR to Facilitate Medicare Fraud 

The Working Group’s sixth priority enforcement area is, “[m]anipulation of Electronic Health Records [(EHR)] systems to drive inappropriate utilization of Medicare covered products and services.” Manipulating patient records is a clear form of Medicare and Medicaid fraud that can create both civil and criminal exposure for the providers (and individual personnel) involved. 

In many cases, the Working Group’s efforts to target kickbacks and manipulation of EHR are likely to go hand-in-hand. Qualifying transactions involving-EHR related services are among the “safe harbors” to anti-kickback liability. However, to qualify for this safe harbor, healthcare providers must structure their financial relationships appropriately. If they don’t—and if they face scrutiny as a result—they could potentially face scrutiny related to the contents of their EHR as well. 

About the False Claims Act 

As the Working Group’s name indicates, it will specifically be targeting healthcare providers, insurers, and other entities and individuals under the False Claims Act. While the False Claims Act applies to all “false or fraudulent claim[s]” submitted for payment by the federal government, it is a particularly potent weapon in the area of healthcare fraud enforcement. 

While the False Claims Act includes several prohibitions, three are particularly relevant to healthcare providers—and the Working Group’s stated priorities discussed above. These are the prohibitions that allow for enforcement against any “person” who: 

• “(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
• “(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; [or,]
• “(C) conspires to commit a violation of subparagraph (A) [or] (B) . . . .”

Collectively, these three provisions of the False Claims Act cover fraudulent Medicare and Medicaid billings, Medicare Advantage fraud, pricing violations, modification of EHR, kickbacks, and billing the federal government for non-compliant medical devices. In civil enforcement cases, the False Claims Act imposes fines and treble damages (three times the government’s actual losses). In criminal enforcement cases, prosecution can lead to both fines and prison time. 

The DOJ-HHS False Claims Act Working Group is Encouraging Whistleblowers to Come Forward 

While the new DOJ-HHS False Claims Act Working Group will be proactively targeting healthcare providers, insurers, and others for enforcement, it will also be relying on whistleblowers. In its July 2, 2025 Press Release, the HHS states that the Working Group, “encourages whistleblowers to identify and report violations of the federal False Claims Act involving priority enforcement areas.” This includes specifically, but not exclusively, violations involving “potential fraud, waste, abuse, and mismanagement.”

Under the False Claims Act’s qui tam provisions, whistleblowers who assist the federal government with pursuing successful enforcement actions are entitled to a reward ranging from 10% to 30% of the amount recovered. This is a significant financial incentive—on top of the incentive to do what is right. The DOJ has recently undertaken other efforts to encourage whistleblowing and promote awareness of the federal government’s whistleblower programs, and we expect to see many cases in which the Working Group’s enforcement efforts are triggered by complaints received from current and former employees. 

Contact the Federal Healthcare Fraud Defense Team at Oberheiden P.C.

At Oberheiden P.C., defending healthcare providers, insurers, and other clients in healthcare fraud investigations under the False Claims Act is a core area of our practice. If you need to know more about the DOJ-HHS False Claims Act Working Group’s enforcement efforts, we invite you to get in touch. To schedule a complimentary consultation with a senior attorney, please call 888-680-1745 or tell us how we can contact you online today.