DOJ and HHS Emphasize Continued, Robust, and Coordinated Health Care Enforcement with Revival of False Claims Act Working Group

Read the announcement here.

Leveraging enhanced cross-agency collaboration and sophisticated data mining, federal agencies are poised to generate new investigative leads, building on recent DOJ enforcement successes.

Key Points of Emphasis and Related Compliance Takeaways

The revived DOJ-HHS FCA Working Group signals that aggressive, coordinated health care enforcement is not only continuing but expanding into data-driven and technology-enabled frontiers.

Reinvigorated False Claims Act Working Group

The DOJ Civil Division and HHS have formally re-launched their joint FCA Working Group. Leadership from HHS’s Office of General Counsel, the Centers for Medicare & Medicaid Services Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General, and DOJ’s Civil Division will coordinate to streamline investigations, share data, and consider parallel administrative remedies such as payment suspensions.

Working Group quells any speculation about health care fraud as an Administration priority. On June 11, Assistant Attorney General Brett Shumate issued a memorandum describing the Administration’s policy objectives and directing all DOJ Civil Division employees to prioritizes investigations and enforcement actions advancing those priorities. Notably, health care enforcement was not among the categories listed. The announcement of the DOJ-HHS FCA Working Group expressly signals that this Administration’s commitment to combatting health care fraud is not waning. Indeed, the Working Group is just one tool in that commitment. Earlier this summer, a memorandum from Matthew Galeotti, head of the DOJ Criminal Division, directed those employees to prioritize investigative and prosecutorial efforts in the area of waste, fraud, and abuse, including health care fraud.  Even though DOJ’s Criminal Division is not included in Working Group, where criminal conduct is suspected, investigations can easily be referred there by the DOJ Civil Division, and indeed, in some districts, Civil Division attorneys are cross-designated to work on criminal investigations. And across the Administration’s announcements, including with respect to the Working Group, is an “encourage[ment to] whistleblowers to identify and report violations” through existing hotlines. The government also continues to view qui tam filings as a critical pipeline and to promote the use of relators to develop investigative leads, notwithstanding several courts calling into question the constitutionality of the qui tam provisions of the FCA.

Traditional fraud theories remain front-and-center. DOJ and HHS intend to “strengthen ongoing collaboration to advance priority enforcement areas,” specifically citing alleged Anti-Kickback Statute violations, improper referral arrangements, drug and biologic pricing abuses, and schemes affecting Medicare Advantage risk-adjustment payments. Recent FCA settlements, charges, and convictions exceeding hundreds of millions of dollars in these areas underscore the potential financial exposure facing the health care industry.

New focus on electronic data manipulation. For the first time, the Working Group explicitly highlights “manipulation of Electronic Health Records systems to drive inappropriate utilization of Medicare-covered products and services.” Health-care IT vendors, data analytics firms, and other technology providers — entities historically outside the traditional provider/ manufacturer lens — may now find themselves squarely within the FCA crosshairs if software design or implementation is alleged to inflate coding, expand utilization, or conceal safety issues.

Heavy reliance on data analytics. The Working Group will “leverage HHS resources through enhanced data mining and assessment of HHS and OIG report findings” to detect anomalous billing, outlier coding patterns, and suspect pricing arrangements. This technology-enabled approach helped fuel the government’s record $2 billion in FCA recoveries announced in January 2024 and is expected to accelerate lead generation going forward.

In light of the government’s emphasis on combatting health care fraud, compliance officers and general counsel should consider the following key takeaways to bolster current compliance mechanisms.

Compliance Takeaways

• Refresh employee training on Anti-Kickback Statute, FCA, and whistleblower non-retaliation protections across all teams, including clinical, sales, and IT teams.
• Carefully document investigative protocols so that any internal review can transition smoothly to voluntary disclosure if warranted, with as limited waiver of attorney-client privilege as possible.
• Reassess risk and exposure in light of the government’s expanded target profile and include EHR vendors, data aggregators, and analytics tools in third-party diligence.
• Evaluate EHR design and implementation governance to ensure audit logs cannot be manipulated to mask late or after-the-fact documentation changes.
• Confirm that any discount, rebate, or formulary placement arrangement is supported by contemporaneous documentation and compliant with safe harbors.
• Scrutinize coding and billing algorithms for Medicare Advantage and fee-for-service lines. Validate that risk-adjustment and utilization rules reflect accurate clinical data.
• Consider proactive “stress testing” of billing data using the same outlier analytics DOJ and HHS employ and promptly remediate anomalies.

Bottom Line

The revived DOJ-HHS FCA Working Group signals that aggressive, coordinated health care enforcement is not only continuing but expanding into data-driven and technology-enabled frontiers. All organizations in the health care industry should ensure their compliance controls are designed to detect and mitigate potential risks, especially around EHR functionality and data integrity. Companies must also maintain and strengthen vigilant oversight of long-standing risk areas such as kickbacks and pricing. Those who do so will be better positioned to navigate the government’s sharpened focus and mitigate the significant financial and reputational stakes inherent in FCA investigations.