Wachler & Associates Health Law BlogHeightened FCA Scrutiny for Providers: DOJ and HHS Renew Enforcement Task Force
The False Claims Act (FCA) remains a crucial focus for healthcare providers and hot-button issue under the current Administration. On July 2, 2025, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced they are teaming up once again. This signals a resurgence of the DOJ-HHS False Claims Act (FCA) Working Group and a revival of another healthcare enforcement initiative from the past. The main goal of the Working Group is to move fast, improve interagency collaboration, and strengthen FCA oversight with advanced data analysis tools, all focused on healthcare.
What Providers Need to Know: Enforcement Priorities
The Working Group will be co-led by senior officials from HHS’s Office of the General Counsel (OGC), the HHS Office of Inspector General (OIG), and DOJ’s Commercial Litigation Branch. U.S. Attorneys’ Offices and CMS’s Center for Program Integrity will also be actively involved.
The revamped Working Group will focus on areas with substantial provider participation, including:
- Medicare Advantage (MA): Enhanced scrutiny of provider group relationships with MA plans, risk adjustment submissions, and upcoding allegations
- Drug, device, and biologics pricing arrangements: Greater emphasis on discounts, rebates, service fees, formulary placement, and price reporting.
- Barriers to patient access: Enforcement related to network adequacy requirements.
- Kickbacks and financial arrangements: Including those involving drugs, medical devices, DME, and other products reimbursed by a federal healthcare program.
- Materially defective medical devices that impact patient safety.
- Manipulation of electronic health record systems (EHRs) to drive inappropriate utilization of Medicare-covered products and services.
The DOJ’s announcement also highlighted a tool it wants the Working Group to use more frequently: Medicare payment suspensions based on “credible allegations of fraud”. For providers, this can result in significant collateral consequences long before a potential finding of any actual fraud.
If this tool is used, CMS may suspend Medicare payments for 180 days with limited appeal rights, as long as the allegation is supported by “indicia of reliability.” This can include:
- Fraud hotline tips corroborated by evidence
- Patterns identified through data mining
- Referrals from provider audits or FCA suits
In practical terms, CMS and its contractors can financially paralyze a provider based on suspicions alone, often well before a formal conclusion, and often-times all a provider can do is wait it out.
Qui Tam dismissals are also making a comeback. The Working Group is tasked with more frequently considering when the DOJ should move forward with dismissing whistleblower (qui tam) lawsuits, even if the whistleblower objects. While this may provide some relief for providers in baseless cases, it also signals a shift of control back to federal agencies. With the main enforcement efforts coming from federal agencies rather than your colleagues turned whistleblower, providers should take serious care to comply with agency rules and regulations.
Final Thought: Now Is the Time for a Compliance Self-Assessment
The message to healthcare providers is clear: the federal government is tightening its enforcement and broadening its reach under the FCA, and no organization working with Medicare or Medicaid should take this lightly.
Given the Working Group’s mandate to act quickly and its access to data and interagency resources, healthcare providers should not wait for an audit or federal investigation to evaluate their compliance. Performing proactive compliance reviews, updating training, and conducting risk assessments are crucial.
For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.